After months of struggle, the grand coalition has settled its dispute over the basic pension. Retirees who only receive a pension at the level of Hartz IV after 35 years in the working life should be financially better off in the future. CDU, CSU and SPD agreed after more than five hours of deliberations in the Chancellery on Sunday to increase the pensions for up to 1.5 million citizens. An automatic income test should determine who is entitled to the basic pension. It should be paid from 2021 on.
Acting SPD leader Malu Dreyer spoke of a "milestone for the welfare state". CDU chief Annegret Kramp-Karrenbauer called the agreement a "good, justifiable result". The compromise on the basic pension is supplemented by relief for the economy. For example, the contribution to unemployment insurance is to be reduced from 2.5 to 2.4 percent by the end of 2022 for a limited period. Above all, the Union had attached importance to such relief. The state-owned bank KfW should also create a "participation fund for future technologies", with volumes of up to ten billion euros. CSU leader Markus SOder spoke of a good day for the grand coalition: "The cow is off the ice," he said.
The basic pension should primarily benefit women
The Union had long insisted on a test of "neediness" to keep the circle of basic pension recipients as small as possible. Pensioners would have had to disclose their financial circumstances. The SPD on the other hand wanted to exclude exactly this. Needy pensioners often shied away from social services, argued the Social Democrats.
Dreyer emphasized that with the solution now found no one would be demoted to the supplicant. Hard-working people who would have been paid too low would now benefit. The basic pension, said Dreyer, would benefit mostly women. Occupational pensions also want to strengthen the coalition.
Instead of neediness, the needs of retirees should now be determined through a "comprehensive income test", as Kramp-Karrenbauer emphasized. For single persons, a free allowance of 1250 euros should apply, for couples it is 1950 euros, according to the decision of the coalition leaders.
The basic pension – yardstick for the future of the coalition
The Union and the SPD expect the unification to be equally free. The dispute over the basic pension had divided social and economic politicians of the Union in recent days. Chancellor Angela Merkel personally campaigned for a compromise in the Union faction, stressing that the Union must keep an eye on all segments of the population if it wishes to remain a People's Party.
In the SPD, on the other hand, a solution to the basic pensions dispute was a measure of the future viability of the coalition. A continuation of the dispute would have encouraged those Social Democrats who want to leave the Alliance as soon as possible. SOder said there was no reason to speculate on a premature exit from the grand coalition with Sunday's agreement. The solution completes the good mid-term review of the government.