Increase in pensions 2024: More money for people with reduced earning capacity and old-age pensioners?

Increase in pensions 2024: More money for people with reduced earning capacity and old-age pensioners?

The new year 2024 is approaching and there will definitely be more money for disability pensioners. But there could also be a significant increase for old-age pensioners next year. The salaries of pensioners with reduced earning capacity have increased by almost 60 percent in the last ten years to an average of 1,065 euros per month. In comparison, the average gross disability pension in 2013 was 678 euros per month. A positive development that, in addition to the annual pension adjustments, can also be attributed to the extension of the attribution period since 2014.

This extension of the eligibility period, which has been extended several times and now applies up to the standard retirement age of 65 years and 8 months, means that people with reduced earning capacity who receive a pension for the first time are treated as if they had continued to work with their previous average income until they reached the standard retirement age. In addition, reductions in income in the last four years before the reduction in earning capacity no longer have a pension-reducing effect, according to the German Pension Insurance (DRV).

Now there is also good news for another group of disabled people: those who are classified as long-term disabled. For a long time, this group received significantly less money because they had a shorter insurance period. From 2024 they will also receive a monthly supplement. In order to receive this supplement, the receipt of the disability pension must have begun between January 1, 2001 and December 31, 2018 and must be received continuously until June 30, 2024. Old-age pensions that are directly linked to the pension due to disability also receive the additional amount. It is estimated that around three million pensioners will receive the supplement.

The amount of the supplement depends on the retirement period. For those starting their pension between January 1, 2001 and June 30, 2014, the surcharge is 7.5 percent of the pension on June 30, 2024. For those starting their pension between July 1, 2014 and December 31, 2018, the surcharge is 4.5 percent of the pension on June 30, 2024. On average, this means an increase of 70 euros for the start of the pension until June 30, 2014 and by 40 euros if the pension starts after this date, according to the DRV.

But it's not just disability pensioners who can look forward to an increase; all other pensioners could also receive an increase in the new year. Economists expect pensions to increase by 5.5 or 6 percent in 2024. The adjustment of pensions depends on wage developments in Germany. When wages rise, pensions also rise. In the second quarter of 2023, the nominal wage index was 6.6 percent, in the first quarter it was 5.6 percent. With tariff increases in many industries, this trend is likely to continue in the second half of the year.

The increase in pensions in 2024 is expected to have a positive impact on the market and the financial industry. With an increase of 5.5 or 6 percent, pension payments will increase and thus increase the pensioners' disposable income. This could lead to an increase in consumption as pensioners have more money at their disposal. This in turn could stimulate the economy and have positive effects on companies and the stock market.

Source: According to a report from https://www.hna.de/wirtschaft/mehr-geld-gabe-renten-erhoehung-2024-fuer-wen-es-naechstes-jahr-zr-92598653.html