Pension: This is why tens of thousands of people have to pay taxes now

The increase in pensions means that tens of thousands of pensioners are paying tax on their earnings for the first time. The Treasury collects millions.

  • Millions of retirees can expect a huge pension increase this year
  • For some of them, however, the increase in pensions also has disadvantages
  • You will be subject to tax: Read here what this means exactly

In fact, the approximately 21 million retirees in Germany can expect a record increase in their salaries this year. Statutory old-age pension payments will increase by 5.35% in the West and 6.12% in the East by the middle of the year. This is the highest adjustment since the year 2000. And it is much stronger than initially expected.

Especially after the corona-related zero cycle in the western retreats and the mini-more in the east last year pension increase essentially good news for retirees. For a pensioner with 1000 euros gross per month, the increase from July 1 means 53.50 euros more per month. In East Germany, this is an increase of 61.20 euros.

But on closer inspection, one realizes that the more anticipated record will bring less to people in everyday life than they might have hoped. There are several reasons for this. First, there is inflation, which is also at record highs and massive rise in energy prices is fired.

Despite rising energy prices, pensioners are exempt from flat-rate tax relief

The prices of many groceries have also increased recently. As a result, the rise in pensions is once again eaten away by the loss of purchasing power and inflation. In any case, the mood of the older generation is currently bad. Because she is going rescue package partly exempted by the government from traffic lights – unlike millions of employed people.

While the latter is taxable by the state Energy package 300 euros to compensate for the rise in electricity and gas prices, the vast majority of pensioners will get nothing.

Only the few who continue to work in taxable employment receive retirement benefits. The rest must increases in daily life compensate out of pocket. Many older people – especially those with a small pension – see this as a great injustice. They are also affected by high energy costs.

Tens of thousands of pensions taxed for the first time after the hike

Now there is one more thing that should cause further resentment among tens of thousands of retirees. Because with the increase in pension benefits, some pensioners exceed for the first time the threshold from which taxes on the pension are due. This is the case if the annual allowance is exceeded.

  • In 2022, it will amount to 9,984 euros for single people and 19,968 euros for married people.
  • If the pension is higher, the Treasury takes action. And this is the first time that tens of thousands of people have done so since the recent increase in pensions.
  • In other words: to that retirement more follows the fiscal deficit.

After the summer increase, approximately 103,000 pensioners will be admitted to the tax liability to glide. This emerges from a response from the Federal Ministry of Finance to a small request from the left in the Bundestag. Our editors have the answer.

Pension taxation brings more than 730 million euros to the State

According to the ministry, this will give the public treasury at least an additional 730 million euros. The total number of pensions taxed after the increase is nearly six million, according to the Treasury Department. It’s a new recording. With a monthly pension of 1200 euros, for example, around 10% of the increased income tax will be deducted in the future.

With a salary of 1500 euros, that’s about 14% of the pension plus. who gross monthly pension than 2000 euros must pay more than 17 percent tax on the amount of the increase. Deductions for health and long-term care insurance are added separately. This development is not entirely surprising insofar as the pension tax system is currently in the process of being restructured.

Whereas until a few years ago, contributors pension contributions policyholders were taxed, remuneration paid should be subject to 100% tax by 2040. During the gradual transition years, the taxable part of the annuity increases each year. In 2022, 82% will be taxable. When you retire is decisive.


Pension in Germany – facts and history

  • System: the legal pension operates on the principle of equivalence and solidarity.
  • Annuity types: There are still those Basic, disability and survivor pension.
  • exceptions: A large majority of the self-employed and freelancers are exempt from compulsory insurance.
  • Funding: The legal pension in Germany is fundamental pay per use.
  • problems: The problems of underfunding stem mainly from the increase Aging of the population in Germany.
  • Three pillars: the retirement provision in Germany rests on three pillars. This includes statutory, company and private pension plans.
  • Origin: She became chancellor on July 22, 1889. Otto of Bismarck officially presented.


Left: pensioners “double pinched” by inflation and exclusion from the energy allowance

While incremental system change is nothing new, many affected seniors will still be annoyed when they first hit the tax bill. ‘Cause that means he’s next to the stream loss of purchasing power now there are tax deductions. The increase in pensions is therefore significantly lower.

“Pensioners are doubly pinched”, criticizes the social politician and East German commissioner for the left in the Bundestag, Sören Pellmann. “The fact that they do not receive a 300 euro allowance for energy expenditure is unacceptable and borders on age discrimination,” he told our editorial staff. The pension increase is not more than one inflation compensation.

“At the same time, more than 100,000 retirees are sliding towards taxation. Pensioners in the East are disproportionately affected by this”, criticized Pellmann. In view of this development, the left-wing politician demanded that the allowance for energy costs should also be paid to pensioners. And: “Small and medium-sized pensions should have the skyrocketing prices be tax-exempt,” demanded Pellmann.

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