Cabinet to lower healthcare contributions for company pensioners

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Up until now, pensioners have had to contribute 15% of their company pensions to the public health insurance fund. According to a Cabinet resolution, this share will decrease, in some cases by half – a relief for those insured by the statutory health insurance.

Federal Health Minister Jens Spahn wants to prove once more that he gets things done quickly. Last Sunday, the Grand Coalition had agreed to relieve company pensioners, and only a week later, the bill was presented.

Contributions lowered by up to 50%

In the future, there will be a tax-free amount, which will improve the pensions for four million company pensioners, according to Spahn: “One third of company pensioners will continue to pay no contributions, i.e. those who have a company pension of less than 159.25 per month. Another third will pay no more than half the contribution. And another third will be relieved by at least 300 euros a year.”

The Bundestag is to decide the law before the end of the year, so that it comes into force in January. Before everything went so fast, however, there were long discussions at Union and SPD.

Strengthening trust in company pensions

Since 2004, all publicly insured persons whose company pension exceeds a certain amount have had to pay full health insurance contributions. Before that, it was only half, i.e. the employee’s share. According to Labour Minister Hubertus Heil, it is crucial that company pensions improve. “It also strengthens confidence in the company pension scheme. It is good when people have a company pension in addition to the statutory pension”.

Criticism from health insurance companies

However, some have expressed dissatisfaction over the fact that there will be no retroactive compensation based on the new law. Health Minister Spahn rejected this idea and insisted that “there can not and will not be retroactive compensation, if only for financial reasons”.

In any case, the relief will affect the health insurance companies significantly: they will receive 1.2 billion euros less revenue each year. The central association of the legal health insurance companies GKV demands to bridge this gap with tax funds. The SPD, however, rejects this. In 2020, the money will come from the government’s Health Fund. Then the subsidy will decrease annually until the health insurance companies will have to bear the losses themselves from 2024. The Ministry of Health justifies this by pointing to the billions in surpluses which the health insurance companies have accumulated.

“Strengthen purchasing power”

The good economic situation of recent years has also made it possible to reduce the unemployment insurance contribution. From next year it will fall by 0.1 points to 2.4 percent. “This is an annual relief for companies and employees of a further 1.2 billion euros. It also strengthens purchasing power, so it is absolutely necessary in the current economic situation”, said Minister Heil.

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