From 2023: Early retirees can earn unlimited additional income

The current shortage of workers and skilled workers is to be counteracted.

From 2023: Early retirees can earn unlimited additional income

The current shortage of workers and skilled workers is to be counteracted. People who retire early should also lend a hand to support the labor market. Without their salaries being reduced. Because the previous additional income limits should fall.

From the beginning of 2023, there will no longer be any income limits for early retirees as to how much they can earn without deductions for their pension. The federal government approved a corresponding draft law by Labor Minister Hubertus Heil from the SPD at the cabinet meeting in Meseberg this Wednesday. "The associated flexibility in the transition from working life to retirement can make a contribution to counteracting the existing shortage of workers and skilled workers," says the draft law.

Previously, retirees were only allowed to work part-time without restrictions after reaching the regular retirement age. In the case of an early pension or a pension from the age of 63 after 45 years of contributions, the additional earnings were not allowed to exceed certain limits. Otherwise there is a risk of a reduction or even the loss of pension entitlement. Employer President Rainer Dulger welcomed the decision and spoke of a long overdue step to keep more people in employment. "The next step must now be to stop promoting early retirement," demanded Dulger. "The deduction-free pension from 63 should expire as soon as possible."

Basically, people who have reached the statutory retirement age and are drawing an old-age pension may earn an unlimited amount of extra money - without their pension being reduced. This standard age limit varies depending on the year of birth. The age for regular retirement will be gradually raised to 67 by 2029.

The following applies until 2023: Until the standard retirement age is reached - i.e. the retirement age for the standard old-age pension - pensioners may earn a maximum of 6300 euros per calendar year without their pension being reduced. However, with the outbreak of the corona pandemic, the additional earnings limit was raised significantly. And this also applies to the year 2022. The increased earnings limit for early retirement pensions is a total of 46,060 euros.

Pensioners can earn up to this amount in addition to their pension in the calendar year without it being reduced. However, the increased amount does not apply to disability and survivor's pensions. If the salary exceeds this or the previous additional income limit, only the excess amount will be taken into account. This amount is then divided by 12 and credited at 40 percent to the monthly pension. Those affected will then only receive a partial pension, according to the German Pension Insurance Association in Berlin.