“The SPD-Resprant is irresponsible”

The basic pension for low wage earners is the SPD’s dream project. But the employers’ associations accuse Hubertus Heil of wrong calculations.

Dhe “respectful” for low-wage earners is currently on hold because SPD Labor Minister Hubertus Heil initiated the departmental vote against the will of the Chancellery and because the SPD is busy with itself these days. Regardless of this, Heil cannot count on the support of employers. The Confederation of German Employers’ Associations (BDA) accuses him of the fact that the basic pension does not work precisely against poverty in old age, is unfair to insured persons with higher contributions and is poorly financed – and therefore irresponsible. This can be found in the employer’s statement on the Basic Pension Act, which the FAZ has received.

Above all, weaknesses in financing encounter defenses. “In the past, the Federal Ministry of Labor always presented the long-term financial impact of all major changes in pension law. It is regrettable that this tradition of responsible pension policy is being abandoned and that new measures are now being planned for the first time without the sustainable financing being clarified, ”the statement said.

Income from new taxes that have not yet been decided and the introduction of which is doubtful, the employers write, referring to Heils plan to use funds from an EU financial transaction tax in the three-digit million range for the basic pension. However, it is uncertain whether and when this tax will come. In addition, Heil wants to abolish the VAT privilege for hotel stays and draw a three-digit million amount from it. He agreed that with Finance Minister Olaf Scholz (SPD), but not with the CDU / CSU.

“Shunting yard policy”

Employers are also resisting Heil’s intention to withdraw billions from health and unemployment insurance in order to top up the pension fund. Heil wants to lower the cash contributions for pensioners and also increase the pension contribution payments for the unemployed through the Federal Employment Agency. “In the tradition of the ‘shunting yard policy’, funds are withdrawn that are then missing there,” warn the employers. “The additional contributions for unemployed benefit recipients are calculated solely as a relief for the pension insurance and the additional benefits of the pension insurance resulting from these contributions are ‘forgotten’.” The employers consider that the financing concept is only sufficient for five years as a particularly serious shortcoming of the “respectable”. “Long-term financing planning is indispensable because the pension insurance is threatened with considerable financing problems, especially after 2025 in view of the worsening demographic development.”

Heil calculated for the basic pension in the first year (2021) with costs of 3.8 billion euros, rising to 4.8 billion euros in 2025. According to the employer, the costs will continue to rise thereafter. According to the SPD, the basic pension, which is basically agreed in the coalition agreement, should benefit those who have earned less than 80 percent of the average wage in at least 35 years of contributions.

Hairdressers as a bad example

According to the employers’ conviction, the ministry works “with misleading figures and thus unnecessarily dramatizes the level of low-wage pensions,” the statement said. According to the ministry, a hairdresser who has worked “full” for 40 years is currently receiving a monthly pension of 512.48 euros. “But this calculation would only be correct if full-time were 32.6 hours per week and hairdressers only earn the statutory minimum wage.”

In fact, the average weekly working time is 38 hours a week. In addition, the minimum wage is not an adequate benchmark. If one takes as a basis the working time of 38 hours and 11.70 euros hourly wages resulting from the generally binding collective agreement in Lower Saxony, the hairdresser annually earns a pension that is half higher than the one given by the ministry in the example calculation – 0.6 instead of 0.4 earnings points . The actual pension entitlement would be 764 instead of 512 euros. In addition, it is contradictory if the ministry takes the hairdressing trade as an example. Because it has even ensured by means of an ordinance that tips, as an important source of income, do not have to be paid any pension contributions and therefore no pension entitlements arise.

The employers also point out that the basic pension could ultimately lead to more people receiving basic state security than today – although the opposite is politically wanted. “It is true that the planned basic pension could help the approximately 100,000 recipients of basic security benefits to an income that they can use to support themselves even without basic security.” Viewed in isolation, the number of recipients of basic security would therefore decrease. However, since a new tax exemption for statutory pensions (capped at 106 euros) is to be introduced with the same law for the same group of people in the basic security, the group will be expanded again.