Heil announced in ‘Bild am Sonntag’ that he wants to introduce a tax bonus for all citizens who voluntarily work longer: ‘We are discussing whether there are financial incentives, for example to ensure that taxes are even more worthwhile for those who want them and be able to work.” It is still unclear how high the additional income tax exemption amount should be. His ministry is currently working on the question: “What needs to be done so that people voluntarily continue working longer?” Heil wants to present the details of the reform ‘by the summer’.
The minister also wants to make working longer financially more attractive for people who receive a widow’s pension. Returning to work should be especially rewarding for widows. Heil: “I know many women who take care of their family members, usually their husbands. Then they die and receive the widow’s pension. And if they then want to work again, this will be fully offset against the widow’s pension. I want to change that: that we are more generous, that work that people want to do is worthwhile.” How much extra income widows and widowers can earn without taking this into account has yet to become clear.
Retiring or continuing to work conversation for employees
As a further measure of the reform, Heil proposes that every employee should have a retirement or continuation interview. Heil: “If the statutory retirement age approaches at some point, employees have the right to talk about it.” Employees and employers should discuss what happens next. For example, whether the soon-to-be retiree can survive another year or two with reduced weekly hours. Every employee subject to social security contributions should have the right to “discuss this with his boss”.
The reform could reduce the burden on the public treasury by billions. Heil: “If we could keep 100,000 people fit and motivated and give them the opportunity to work a little longer, that would be around two billion euros per year.” with a social security of 1.5 billion.
According to the ministry, more than 60 percent of 60 to 64 year olds (4.1 million) are currently working and 20 percent of 65 to 69 year olds (1.1 million). The economy also needs to improve, says Heil. He criticizes: “There are still large companies that do not realize what older workers can achieve in times of labor and skilled labor shortages.” He specifically mentions companies “that send people home in their late fifties with a golden handshake.” In other companies, older people are said to leave “because the working time models no longer fit, because they simply do not have work that suits their age.”
Heil plans discussions with companies
The minister warns companies “that experienced employees are not thrown away. A 60 or 64 year old may not be able to work as fast as 20 year old employees, but they know the shortcuts and have experience.”
To improve the situation for older employees, Heil wants to clarify labor law issues with companies: “What working time models are there so that people are employable? Which qualifications can be renewed because the job requirements also change as a result of digitalization? It’s about people remaining employable for as long as possible and not breaking down at some point, and that they also continue to enjoy working.”