Introduces draft legislation pertaining to elderly employment
The lack of skilled workers is causing issues in Germany's economy. As per insiders, the federal government settled on tactics to encourage employees to work past their typical retirement age in July. Sources indicate that Labour Minister Heil is currently pushing for approval of the related bill.
Labour Minister Hubertus Heil has proposed enhanced incentives for continuing work beyond retirement age, as per the agreement in the traffic light coalition.His ministry circulated a preliminary bill for review among other ministries, states, and associations last month. The cabinet is set to vote on the changes on September 4th.
Workers who choose to continue working past retirement age can expect a delayed retirement bonus. Additionally, they will receive a pay increase in the form of their employers covering their unemployment and pension insurance contributions directly. These measures were agreed upon by the federal government in the economic growth initiative, which was adopted by the cabinet on July 17th. The government anticipates that the 49 measures in various sectors will improve the economy and promote growth.
The pension law revisions aim to strengthen the financial incentives for seeking and expanding employment, the draft explains. At the same time, it emphasizes expanding job opportunities and motivations for the elderly to work. The SPD, Greens, and FDP will introduce the amendment to the ongoing legislative project in the Bundestag as an attachment to the draft. Besides the delayed retirement bonus and employer-compensated social security contributions, additional changes are planned.
For widows and widowers who work, the income threshold beyond which their survivor's pension is reduced will be raised. Consequently, "a full-time job at the statutory minimum wage will remain tax-exempt," the draft states. Furthermore, the current senior employee's employment ban, which prevents the workers from signing a fixed-term contract with their previous employer without a just cause, will be somewhat relaxed.
The enhanced incentives for continuing work beyond retirement age are primarily aimed at professional employees, as mentioned in the draft of the pension law revisions. The agreement in the economic growth initiative has acknowledged the importance of professional workers in overcoming Germany's skills shortage.
