Germany seems to be following…Greece‘s example in taxing working people pensioners.

The government of Chancellor Friedrich Merz is drafting a bill that would see Germans who choose to continue working after retirement age will be entitled to a tax-free limit of €2,000 on their monthly income, according to the Financial Times. 

The German government’s aim, according to the FT, is to address the shortage of skilled staff in Europe’s largest economy by increasing tax incentives to stay in work.

The measure, a campaign promise by Murch, is estimated to have a fiscal cost of €890 million and is expected to come into effect from early January.

The FT notes that Germany is not the first country to take such initiatives, noting that in Greece the number of registered working pensioners has risen from 35,000 in 2023 to more than 250,000 now.

Recall that previously, working pensioners automatically lost 30% of their pension (the Katrougalos law even provided for the retention of 60%). Thanks to the reform two years ago, they receive their pension in full and simply have 10% of their salary withheld as a contributory resource for the EFKA. In fact, through their work they can increase their pension, as they extend their retirement age.

In this way, an important part of the labour market has been ‘whitened’, as the deductions previously imposed were driving the vast majority of working pensioners into ‘black’ employment, with no other benefit.

Do it (again) like Greece

It should be noted that this is not the first “similarity” between the German government’s program and the reforms made in Greece over the past six years.

The Merz government has placed a strong emphasis on digitizing the state, setting up a new, separate ministry. The coalition government’s programmatic agreement in Berlin also provides for, among other things, electronic recording of working hours, reminiscent of the digital work card, and no tax on overtime surcharges, something that is being implemented in Greece.