The German newspaper Bild on the 16th that the German Federal Cabinet approved a draft law on January 15, which stipulates the introduction of the "active pension" program from January 1, 2026, to alleviate the problem of the shortage of technical workers in Germany.

According to the draft law, if an employee continues to work after the standard retirement age, the monthly income of up to 2,000 euros is tax-free. The tax-free amount is not subject to unemployment and pension contributions, but it is subject to about 220 euros for health and care category expenses. At present, the standard retirement age of German employees is gradually increasing to 67 years old. DPA said that the CDU put forward the "active pension" plan during the administration of the "traffic light" coalition, and promised to implement the plan after winning the Bundestag election this year. Last week, the coalition party (CDU/CSU) and the SPD agreed on the details of the "active pension" in the ruling coalition committee.

The purpose of "active pensions" is to "incentivize people to make better use of the employment potential of older people" and "allow experience-based knowledge to remain longer in companies" amid a widespread shortage of skilled workers, according to the draft law. The German federal government expects that 168,000 employees will benefit from this policy.

According to the German Finance Ministry, the tax-free cost of an "active pension" is about 890 million euros a year. The sum will be borne by the federal government and the state governments, each accounting for 378 million euros, with the rest allocated to the municipalities. Calculations by the German Institute of Economic Research (DIW) show that with the in-depth development of this policy, the country can actually earn hundreds of millions of euros in additional revenue every year.

For this plan, General Manager of the German Employers¡¯ Association (BDA), Campet, criticized the ¡°German Editorial Network¡± by saying that the ¡°government is stepping on the door and the brake at the same time¡± and that the ¡°active pension¡± aims to encourage employees to work longer, but early retirement will not cause any losses. The German Trade Union Federation (DGB) also expressed concern that ¡°this plan could cost billions of euros but could not solve any existing problems.¡±

The "active pension" scheme, which will be part of Germany's pension package, has been submitted to the German Bundestag for approval, DPA said. Despite some criticism, the Coalition and SPD expressed optimism that the draft law on "active pensions" is expected to come into force in early 2026.