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Global Economy

Early retirees should be able to earn unlimited additional income

From the coming year, early retirees can earn an unlimited amount of money through employment without jeopardizing their pension payments. The Federal Cabinet decided to abolish the previously applicable additional earnings limit as of January 1, 2023 for early retirement pensions.

So far, unlimited additional earnings can only be earned once the standard retirement age has been reached – currently depending on the age between 65 and 67 years. According to the current legal situation, those who retire earlier should only have been able to earn a maximum of 6300 euros per year in the coming year. If the amount was exceeded, the pension would have been reduced or even cancelled.

The limit is to be abolished from 2023

For the years 2020 to 2022, the additional income limit was increased to a good 46,000 euros per year as part of a temporary special corona regulation. The government has had "good experiences" with this, explained Federal Labor Minister Hubertus Heil (SPD). The government is now "permanently making it possible to make the transition from working life to retirement flexible."

Without the planned change in the law, the limit would have automatically shrunk to 6,300 euros on January 1, 2023.

The draft law available to the Reuters news agency also says: "The associated flexibility in the transition from working life to retirement can help to counteract the existing shortage of workers and skilled workers."

Employer President Rainer Dulger welcomed the cabinet decision and spoke of a long overdue step to keep more people in employment. "The next step must now be to stop promoting early retirement," demanded Dulger. "The deduction-free pension from 63 should expire as soon as possible."

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