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The Coalition Compromise on the Basic Pension: Well Meant, Badly Done

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  • Joachim Ragnitz

Abstract

The basic pension adopted by the German Federal Cabinet does not help reduce old-age poverty because needy pensioners benefit only from the introduction of a tax-free allowance in the basic provision. The beneficiaries of the basic pension are thus only those pensioners who are not entitled to basic old-age provision due to other income or assets. The agreed income assessment, in turn, is far too generous to help bring about a sustained curbing of expenditure on the basic pension.

Suggested Citation

  • Joachim Ragnitz, 2020. "The Coalition Compromise on the Basic Pension: Well Meant, Badly Done," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(03), pages 48-52, March.
    • Handle: RePEc:ces:ifosdt:v:73:y:2020:i:03:p:48-52
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    References listed on IDEAS

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    1. Franz Ruland, 2019. "Vorschlag zur Grundrente: ungerecht, ineffizient und teuer [Basic Pension Proposal: Unfair, Inefficient and Expensive]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 99(3), pages 189-195, March.
    2. Hermann Buslei & Johannes Geyer & Peter Haan & Michelle Harnisch, 2019. "Starke Nichtinanspruchnahme von Grundsicherung deutet auf hohe verdeckte Altersarmut," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 86(49), pages 909-917.
    3. Tim Köhler-Rama & Franz Ruland, 2019. "Vorschlag zur Grundrente: ungerecht, ineffizient und teuer — Replik und Erwiderung [Proposal on Basic Pension: Unfair, Inefficient and Expensive — Reply and Response]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 99(6), pages 432-439, June.
    4. Johannes Blum & Raphael de Britto Schiller & Niklas Potrafke & Joachim Ragnitz & Martin Werding, 2020. "The Compromise on the Basic Pension – Does It Meet Expectations?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(01), pages 45-50, January.
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    Cited by:

    1. Joachim Ragnitz, 2020. "Federal Government Basic Pension Plans: There Are Better Solutions," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 27(02), pages 18-20, April.

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    More about this item

    Keywords

    Rente; Rentenpolitik; Rentenfinanzierung; Gesetzliche Rentenversicherung; Grundrente;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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