Pensioners in need: Why are they left empty-handed when it comes to inflation compensation?

Pensioners in need: Why are they left empty-handed when it comes to inflation compensation?

The federal government has introduced an inflation bonus of up to 3,000 euros, which was previously intended to primarily benefit employees. As the Mainpost reported, employees can still receive this tax- and duty-free payment until the end of 2024. However, pensioners only benefit to a limited extent from this regulation. While retired civil servants are entitled to this bonus under the collective agreement for the public service (TVöD), many pensioners who were not previously in the public service remain without any benefits. This discrepancy has caught the attention of the social association VdK, whose president Verena Bentele is calling for equal treatment for pensioners.

The political discussion

Bentele highlights that many older people are under heavy strain due to the rising cost of living. According to the FR 40 percent of pensioners live on less than 1,250 euros per month. The federal government has not yet responded to these demands, and a petition submitted on May 26, 2023 has not yet been decided. Chancellor Olaf Scholz expressed skepticism and said it would be “quite a sum of money” if all 21 million pensioners in Germany received the maximum bonus.

The inflation bonus for retired civil servants is paid out gradually and depends on the pension and share rate. This means that recipients can receive different amounts depending on their lifetime and length of service, which in many cases are well below 3,000 euros. The VdK advocated that pensioners should also receive such support, especially since regular pension increases cannot keep up with inflation. The situation could worsen further in the future if pension increases continue to lag behind inflation.