As of: March 1, 2024, 3:47 p.m
By: Lisa Mayerhofer
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Pensioners also benefit from the Traffic Light Coalition’s Growth Opportunities Act.
But the Union wants to slow down the project in the Federal Council.
An overview.
Berlin – The trouble and delays surrounding the Growth Opportunities Act not only affect the economy, but also pensioners.
With the law, the traffic light coalition also wants to defuse double taxation of pensions - a long overdue step that hardly anyone had paid attention to so far.
Growth Opportunities Act is also intended to relieve the burden on pensioners
The Growth Opportunities Act, which was approved in the Bundestag on Friday, provides relief of around three billion euros and is due to come back to the Bundesrat on March 22nd, where the Union is threatening a blockade.
In any case, Union parliamentary group leader Thorsten Frei made it clear that the CDU and CSU are voting against it.
“We say no to a decision that claims to relieve the burden on the German economy, although it wants to burden another part of the economy with an additional 450 million euros,” he said, referring to the cancellation of the agricultural diesel benefit for agriculture.
The SPD MP Michael Schrodi criticized that the Union wanted to hit the government with its rejection.
“But you are hitting the economy, the pensioners and ultimately the entire country.”
The Federal Council had already blocked the law last year with the argument that states and municipalities would have to shoulder a large part of the costs and tax losses.
In the negotiations, the negotiating partners then reduced the volume of relief from the previously planned seven billion euros annually to 3.2 billion.
Double taxation of pensions: That's what's behind it
Many people do not realize that the Growth Opportunities Act is also intended to relieve the burden on pensioners.
This is also about tax matters: The background is the gradual taxation of the statutory pension, which currently means that the tax share of the pension increases every year for the respective new pensioners.
The trouble and delays surrounding the Growth Opportunities Act not only affect the economy, but also pensioners.
(Symbolic image) © Imago/HalfPoint Images
However, this restructuring of the pension system resulted in double taxation.
In some cases, this means that the tax-free pension inflow is lower than the taxed pension contributions.
This means that tax on pension contributions that have already been taxed would then be waived again in retirement.
This particularly affects the self-employed.
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A few years ago, the Federal Finance Court therefore determined that pensions and previously paid pension contributions could, under certain circumstances, be taxed unconstitutionally twice as early as 2025 without new legal regulations.
For this reason, the government has decided on a new taxation model as part of the Growth Opportunities Act, in which the tax share of new pensions will only increase retroactively from this year in 0.5 percent increments instead of in 1 percent increments.
This also means that the pension payments of new retirees will be fully taxed for the first time from 2058.
SPD: “Pensioners held hostage”
In other words: New pensioners in particular will receive tax relief in the coming years as a result of the law - or, to put it better: no more burden.
“Since the number of cases will increase significantly from 2023, it is even more important to pass the Growth Opportunities Act as quickly as possible.
The Union
is blocking this regulation for pensioners born in 2023 and beyond,” said SPD MP Frauke Heiligenstadt, according to the
Berliner Morgenpost
.
“Taking pensioners hostage in this context is unacceptable.”
With material from dpa