Almost a quarter of a million pensioners no longer have to pay taxes this year. Reason: the increased basic allowance, which is intended to compensate for inflation. But there is bad news for many other pensioners.
Around 244,000 pensioners will no longer be liable to pay taxes this year because they will benefit from the increase in the basic allowance for income tax. A spokesman for the Federal Ministry of Finance confirmed this number after The “Süddeutsche Zeitung” reported about it. At the same time, the burden is also increasing for 114,000 pensioners: They will have to pay taxes in the future because of the pension increase coming in July.
Pensions in Germany will rise by 4.57 percent on July 1st. For 2024, there will still be 6.3 million people in Germany who are considered “taxpayers with pension income,” it said. In total there are around 21 million pensioners in Germany.
The basic allowance applies to all taxpayers and refers to the annual income up to which no income tax has to be paid. After the increase, it is 11,604 euros for the current year.
Finance Minister wants further increase
To compensate for inflation, it was increased by 696 euros from 10,908 euros at the turn of the year. Federal Finance Minister Christian Lindner (FDP) wants an even larger retroactive increase, something that is currently being discussed within the traffic light coalition. According to the spokesman, this is not yet taken into account in the Finance Ministry’s figures.
The taxation of pensions was changed in a reform in 2004. Gradually, an increasingly larger part of the pension becomes taxable, while contributions during the working phase are made tax-free. The later the pension starts, the higher the taxable portion of pension income. Many pensions therefore remain tax-free if the pensioners have no further income.