No, it’s not Christmas yet, but for retirees, the anticipation starts a little earlier this year. According to current estimates, pensions in western Germany could rise by 5.2 percent in the coming year, and in the east by as much as 5.9 percent. At least in the west it would be the strongest pension increase in almost four decades, and another 4.9 percent in the west and 5.7 percent in the east are predicted for 2023.
Pension increases are math. A formula determines how much pensions will rise, and the adjustments are roughly based on the development of wages. Compared to the Corona year 2020, salaries have risen again in the current year, also because fewer people are on short-time work. That’s why the pensioners will get more next year.
Actually, the pensions should have fallen this year. But the law forbids that
This development, which is encouraging from the senior citizen’s point of view, has a flaw for which the old coalition is responsible. It has suspended the so-called catch-up factor in the pension calculation, which would have dampened the pending increases.
The background: Actually, the pension should have decreased this year because in the previous year – Corona, short-time work, crisis – wages fell. However, falling pensions have long been excluded by law. Worse than a zero round, as experienced by senior citizens in the West this year, it can therefore never come, no matter how bad the job market is. As a catch-up factor, however, such omitted pension cuts are usually made up for in the following years, i.e. offset against the next pension increase. Social Minister Hubertus Heil, however, fiddled with the pension formula and suspended this mechanism in 2018.
No party wants to mess with the pensioners
It’s not fair. Because either the pensions develop according to the wages, but then please in good and bad times. Or politicians decide in favor of a new concept that, for example, pensions only follow price developments. As it is now, however, the employed bear the corona burdens on the labor market to a greater extent than the pensioners, who then again fully participate in the recovery.
No party wants to mess with the pensioners, they have a large and growing weight in the electorate. However, those who point out the imbalance in terms of intergenerational justice have been accused by the ruling social politicians of the past few years of playing old against young and not showing the elderly enough respect for their life’s work. In truth, however, it is exactly the other way around. A pension policy that has too little to counter demographic developments creates exactly the divide it claims to be healing.