The Coalition Compromise on the Basic Pension: Well Meant, Badly Done

The basic pension adopted by the German Federal Cabinet does not help reduce old-age poverty because needy pensioners benefit only from the introduction of a tax-free allowance in the basic provision. The beneficiaries of the basic pension are thus only those pensioners who are not entitled to basic old-age provision due to other income or assets. The agreed income assessment, in turn, is far too generous to help bring about a sustained curbing of expenditure on the basic pension.