Presented on 13 July in Berlin by Hubertus Heil, German minister for labour and social affairs, from the SPD party, the pensions reform bill seeks to restore the confidence of different generations in the pay-as-you-go pensions system, which has been hampered heavily by demographic changes in the country. While taking into account both the interests of retired people and employees, the SPD minister plans to maintain the existing level of legal pension payments at 48% of net revenue until 2025 and set the cap for old-age pension contributions at 20%. Furthermore under the reform bill, which maintains the aims set by the parties of the grand coalition in its government programme, disability pensions and those for mothers who had children before 1992 will be improved. The cost of the reform bill stands at an estimated 35 billion euros and, having been sent to other government ministers, the text expected to be adopted after the summer break before being brought before the two houses in Autumn. It is due to come into force from 1 January 2019.
Restore confidence. By way of introduction, the SPD minister underlined that the welfare state is reliant on a “fundamental promise”, that people who have worked their entire life will receive adequate protection when they reach old age. This promise is fulfilled, Hubertus Heil said, by the pay-as-you-go pensions system, which is one of the pillars of the welfare state “We want to renew this promise and restore confidence,” the minister continued, while slamming “lobbyists” in favour of privatisation as well as the right-wing populists, from the AfD party, who want to reserve access to the pension system to native Germans.
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