Government agrees on basic pension

Up to 1.5 million people should in the future receive a basic pension that is higher than the basic income.

Government agrees on basic pension
dpa

Berlin (dpa) - German Labour Minister Hubertus Heil on Monday praised a compromise deal struck by the country's ruling coalition on a new basic pension, saying that it is a good solution.

"We have a basic pension that is worthy of its name," he told the broadcaster ARD.

Heil said that he had been particularly focused on not deterring needy people and on avoiding unnecessary bureaucracy.

In Heil's view, the compromise also proves the capacity to act of the coalition, which is made up of the centre-right Christian Democrats and centre-left Social Democratic Party (SPD).

"If the government makes a difference on issues that are of concern to people, then it should go on working," he said.

It is too early for an appraisal of the government, but the compromise is a "good step," added Heil, who is a member of the SPD.

Coalition leaders had agreed on Sunday that up to 1.5 million people should in the future receive a basic pension that is higher than the basic income. The costs for these benefits are expected to total up to 1.5 billion euros (1.65 billion dollars).

A comprehensive income assessment is planned for beneficiaries. The coalition agreement says that a basic pension should be preceded by a check of whether the people concerned are needy.

Under the compromise found on Sunday, pensioners would receive an allowance starting in 2021 if they have paid contributions for 35 years and their payments lie under 80 per cent, but over 30 per cent of the average income.