retirement benefits
Pension increase and pension adjustment East-West in force
Annual pension adjustment: Pensioners will receive significantly more money this year from July 1st. photo
© Jan Woitas/dpa
1 July – pensions are rising again. This year, too, the increase is significant. 30 years after reunification, the pension value in the east is being adjusted to that in the west.
The approximately 21 million pensioners will now receive more money. The annual pension adjustment came into effect at the beginning of the month. The Retirement benefits increase by 4.39 percent in the West and by 5.86 percent in the East. In addition, more than 30 years after reunification, the pension value in the East is being aligned with that in the West. It is now uniformly 37.60 euros.
The pension value indicates how much a so-called payment point is worth. Insured persons collect payment points over the years. Multiplied by the applicable pension value, this later results in the pension.
adjustment of the pension value
A pensioner in the West with a pension of EUR 1,500 gets about EUR 66 more per month as a result of the current increase, and about EUR 88 more in the East. These are gross amounts – that is, before the deduction of contributions for health and long-term care insurance.
A small part of the pension increase will be lost this year because the contributions to long-term care insurance will increase on July 1: for childless people from 3.4 to 4.0 percent, for parents from 3.05 to 3.4 percent. In the case of the mentioned example pension of 1500 euros, that would be 9 euros more deduction from the gross in the case of a childless pensioner, and around 5 euros for a pensioner with children.
According to the pension insurance, the annual increase applies to both old-age pensioners and those who have already retired earlier due to incapacity to work (reduced earning capacity pension). The increase comes automatically in July. Recipients do not have to do anything for it.
Increase lags behind inflation
According to the Federal Ministry of Social Affairs, the current increase lags behind inflation. But that is a snapshot. On average, the pension value has risen by a total of 26 percent in the west and 40 percent in the east since 2012, and prices in the same period by only 20 percent, it said.
Experts also point out that a significant increase in pensions is to be expected again in the coming year – because this depends on wage developments. “From the middle of 2024, pensioners will receive an increase of at least 5.5 to six percent,” said Freiburg finance scientist Bernd Raffelhüschen of “Bild” (Saturday). “If there are further increases in wage rates this year, pensions could even rise well over six percent.” Jens Boysen-Hogrefe from the Kiel Institute for the World Economy also told the newspaper: “The pension adjustment in the coming year could be even stronger than this year.”