Pension reform 2025: Mothers' pension III and the first details for payouts!

Pension reform 2025: Mothers' pension III and the first details for payouts!

Frankfurt am Main, Deutschland - On June 14, 2025, a far -reaching “immediate program” was decided in Germany by the federal government, consisting of the Union and the SPD. This program includes around 60 measures with the aim of facilitating investments and overcoming economic stagnation. The focus is on a fundamental pension reform, which should guarantee a pension amount of 48 percent of the average income by 2031. This is particularly important in view of the demographic change that increasingly puts the pension systems under pressure.

A central component of this reform is the mother's pension. Since January 1, 2014, parents have received financial recognition for their child -rearing periods, which was expanded by the mother's pension II in 2019. For children before 1992, up to 2.5 years of child education apply, while for children from 1992 even three years of parenting are counted. The planned mother's pension III is intended to abolish these inequalities and enable equivalent treatment of all parents, regardless of the year of birth of their children. It is planned that parents receive three pension points for each child after the reform, but the financing concept for this reform is still pending. The social association VDK describes the mother's pension reform as "long overdue" and calls for financing from tax funds.

pension reform 2026 and beyond

The new federal government under Friedrich Merz has determined comprehensive reforms in retirement provision in the coalition agreement. The aim of the 2025/2026 pension reform is to secure the pension level of 48 percent to at least 2031. This will be supported by 3.74 percent by the increase in legal pensions from July 1, 2025, which corresponds to a monthly plus of around 66.15 euros for a standard pension after 45 years of contributions. The pension value then increases to 40.79 euros, which benefits around 21 million pensioners.

Another innovative step is to introduce the active pension, which enables pensioners to earn up to 2,000 euros tax -free. In addition, an early start pension for certain professional groups will be introduced from 2026 in order to retire more flexible transitions. Such measures are necessary because the pension system in Germany is in a precarious location, with a falling number of contribution payers and an increasing amount of dormitants.

financial challenges and future forecasts

Demographic development ensures that 61 percent of pensioners receive less than 1,200 euros net per month. A third of the pensioners even have to be satisfied with less than 750 euros net, which often brings them to the risk of poverty. The statutory pension insurance is financed by a levy procedure, whereby the ongoing pension payments are covered by contributions from the employed population. But the low birth rate and the increasing life expectancy lead to serious financing problems in the long term.

The federal government currently takes over around 30 percent of pension insurance expenses that make up more than 25 percent of the federal budget. Forecasts show that the stop line of a maximum of 20 percent of the average earnings applies by 2025, these are currently 18.6 percent. Nevertheless, increasing age poverty rates, especially in women with interrupted employment biographies, as well as falling contribution figures, the discussion about tax increases or savings will further heat up elsewhere.

The discussion about the financial future of pension supply remains a central topic of the next few years, since the pressure is growing to find solutions that secure both appropriate services for today's and future pensioners and help overcome the last hurdles in the financing.

For further details on this complex topic, please read the reporting of fre.de , Buerger-gelde.org and Deutschlandfunk.de .