Basic pension recipients in Germany receive less than expected - analysis by the German Institute for Economic Research (DIW)

Basic pension recipients in Germany receive less than expected - analysis by the German Institute for Economic Research (DIW)

According to a report by www.zeit.de, a study by the German Institute for Economic Research (DIW) has shown that fewer people in Germany are receiving the basic pension than originally expected. At the end of 2022, a total of 1.1 million people were receiving the benefit, although the federal government had assumed 1.3 million and the SPD had even assumed 1.4 million would be eligible.

The basic pension is intended to support people who have worked for long periods at low wages with a supplement to their pension. Anyone who has paid into the statutory pension insurance for at least 33 years is entitled to this, although the full basic pension supplement is only granted from 35 years of contributions. However, Peter Haan from DIW stated that the basic pension is not enough to adequately combat poverty in old age, as only 4.3 percent of the approximately 21 million pensioners received the supplement, which is intended to raise below-average pensions to a sufficient level.

According to the DIW study, basic pension recipients received an average monthly pension increase of 86 euros. Women in particular benefit from this, as they are more likely to claim time off to raise children and lower wages to top up their pensions. Around 72 percent of those receiving the basic pension are women. In addition, people in the East German federal states receive basic pension supplements more often than people from the West German states. In the East German states, 4.1 percent of men and 7.8 percent of women received a basic pension, while in the West German states it was 1.8 percent of men and 6.2 percent of women.

The effects of this lower number of basic pension recipients can be diverse. On the one hand, this could mean that the basic pension does not reach sufficiently to those who actually need it and therefore does not achieve its goal. It could also have an impact on the financial sector as less money will be paid out for basic pension supplements and this may create a funding surplus in other areas. Political measures could also be discussed to make the basic pension more targeted and efficient.