Germany finally launches basic pension scheme

After months of delays, the federal government’s much-anticipated basic pension (Grundrente) scheme has finally kicked off. 

Germany’s basic pension scheme kicks off this July

Shortly before the federal election in September, Germany’s coalition government is finally delivering on its promise to top-up insubstantial pension benefits to ensure a basic standard of living for all retirees who have contributed to the social security system. 

Under the new system, anyone who has contributed towards a German pension for at least 33 years will qualify for a basic pension. This includes not just time spent working, but also time taken out to raise a family or care for a relative. Mini-jobs subject to pension insurance as well as military service or political imprisonment in the German Democratic Republic (GDR) are also taken into account, but periods of receiving unemployment benefits are not. 

The idea is to give an income supplement to those who have contributed towards a pension for a long period of time but - due to having a lower salary or fewer working hours - have not built up a sufficient pension entitlement to ensure a basic subsistence level. Federal Labour Minister Hubertus Heil expects 1,3 million people will be eligible for the basic pension - 70 percent of them women. 

Eligible pensioners will be informed automatically

If you qualify for a basic pension, you will be informed by the Deutsche Rentenversicherung. You do not need to apply. This is part of the reason why the scheme has been so delayed - it has been an enormous administrative effort to individually check 26 million pensions and determine whether the person is entitled to the supplement. 

Eligible pensioners who are just entering retirement can expect to receive a notification during the course of July. Over the coming months, existing pensioners will also be informed. Since the entitlement has officially been in effect since January 1, 2021, those entitled will also receive the extra benefits from the first six months of the year retrospectively.