A significant economic development is unfolding in Germany as the government prepares to implement a new policy allowing retirees to earn up to 2,000 euros without tax if they choose to continue working. This initiative is set to take effect next year, though it still requires final approval.
The proposal, backed by the ruling coalition with the Social Democrats, aims to encourage older citizens to remain in the workforce. The initiative mirrors similar measures taken in Greece, where over 250,000 retirees returned to work within a year of similar tax exemptions.
In Germany, this initiative is particularly relevant given the country”s relatively short working hours compared to other OECD nations, where around 30 percent of workers are in part-time positions. The government believes that allowing tax exemptions for retirees will not only help individuals but also strengthen public finances.
Despite the anticipated positive impacts, the fiscal cost of this policy is projected to be nearly 900 million euros for the country. As the plan moves forward, it could significantly change the retirement landscape in Germany, potentially leading to a notable increase in the number of active retirees in the labor market.
