Taxes on pensions: The number of taxpayers falls due to the basic tax allowance

Taxes on pensions: The number of taxpayers falls due to the basic tax allowance

In Germany, out of a total of 21 million pensioners, more than 6.3 million will have to pay taxes in 2023. This data comes from the Federal Ministry of Finance. Due to the increase in the basic tax allowance, the number of taxable pension recipients has decreased. Currently, around 244,000 pensioners do not have to pay any taxes in the coming year. However, the number of taxable pensioners is expected to rise by around 114,000 following a 4.57 per cent increase in the state pension in July.

The tax liability of pensioners depends not only on the amount of their pension benefits, but also on other factors such as additional income from, for example, rental income or company pensions, as well as extraordinary burdens such as medical or care costs. Since 2005, the proportionate taxable portion of the statutory pension has been rising continuously. The full pension will not be taxable until 2040.

Pension package II is viewed critically by experts, particularly with regard to the burdens that younger people in particular have to bear. It is discussed whether the welfare state in its current form is sustainable and what adjustments are necessary to maintain it in the long term. The question of whether the statutory pension alone is sufficient to secure the standard of living in old age is also raised. Solutions are being discussed to enable people whose pensions are not sufficient to live a dignified life in old age.