Just in time before the grand coalition government ends for this legislative period, one of its prestige projects is reaching citizens, or more precisely pensioners. According to estimates by the Federal Ministry of Labor, around 1.3 million retirees will receive a supplement to their pensions at taxpayer expense. In the face of opposition from the CDU/CSU, the SPD pushed through the basic pension last year, which is intended to recognize the lifetime achievements of people who have worked all their lives but still only receive a comparatively small pension.Although the corresponding law has been in force since the beginning of the year, it is only now, in July, that the pension insurance company is sending out the first notices. This is due to the complicated data transfer between the German pension insurance, the financial and social authorities, which first had to be set up in order to be able to calculate the supplements.However, the delay should not be at the expense of those affected: All basic pension supplements will be paid retroactively to January 1, 2021, which also applies to retirees who will have to wait until the end of next year for their decision. However, no interest will be paid on the additional payment.

What is the basic pension?

Contrary to what the name suggests, the basic pension is neither a new pension nor does everyone receive it. Rather, it is paid as a supplement to old-age, reduced earning capacity or survivors’ pensions. The aim is to improve the situation of long-standing low-income earners in old age by automatically increasing their pension entitlements.According to the Federal Ministry of Labor, about 70 percent of the beneficiaries of the basic pension will be women who have worked in lower-paying jobs or part-time because of their families. People from eastern Germany are also likely to be among the winners of the basic pension.

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