(de-news.net) – A new legislative initiative introducing an active retirement scheme is scheduled for parliamentary deliberation in early December. The proposal, endorsed by the governming coalition following a coalition agreement, aims to incentivize continued employment among retirees. The Federal Ministry of Finance has confirmed that a draft bill will soon be submitted.

The scheme envisions allowing pensioners to earn up to 2,000 euros per month tax-free, thereby encouraging voluntary post-retirement work. Former Federal Labour Minister and SPD Chairman Franz Müntefering expressed support for the measure, advocating broader flexibility within the pension system.

More recently, the CDU proposed enhancing the scheme’s appeal by raising the monthly tax-free threshold to 3,000 euros, resulting in an annual exemption of 36,000 to 12,000 euros above the initial projection. CDU finance expert Fritz Güntzler emphasized that, beginning January 2026, retirees would also benefit from waived contributions to unemployment and pension insurance.

However, the proposal has also drawn criticism. Steffen Kampeter, Chief Executive of the Confederation of German Employers’ Associations (BDA), warned of conflicting policy signals, noting that while the Aktivrente promotes extended employment, early retirement without financial penalties undermines this objective.

On her part, Eva Maria Welskop-Deffaa, President of the German Caritas Association, raised concerns about generational fairness. She argued that substantial tax exemptions for seniors could disadvantage younger families subject to steep tax progression. Welskop-Deffaa also questioned the emphasis on maintaining pension levels, asserting that the metric fails to reflect actual financial security. She underscored the injustice of lifelong contributors facing inadequate retirement income.