Approximately 4.5 million individuals have an income below €2750
In Germany, a significant portion of full-time employees are earning salaries that could potentially impact their retirement benefits. According to recent statistics, over one in five full-time employees nationwide earn less than €2,750 gross per month, with around 40% earning less than €3,500.
This low income bracket could pose challenges for retirement, as people may qualify for reduced earning capacity pensions if they are no longer able to work or can only work a few hours a day before reaching retirement age. However, income from other sources must not exceed certain thresholds to receive this pension.
The supplementary income limits for receiving a full reduced earning capacity pension in 2025 are approximately €1,638 per month, while for a partial pension, it's around €3,277. If a person's supplementary income exceeds these limits, their pension may be reduced.
To qualify for any pension benefits, individuals must have reached the standard retirement age or be permanently incapacitated for work and be at least 18 years old. They must also live in Germany with a residence permit or German citizenship.
For those with very low income (under about €1,062 per month), basic income support is available to cover minimum subsistence needs. The monthly social support varies depending on individual circumstances, ranging from €451 to €563.
The statutory pension only accounts for 53% of the gross incomes of those aged 65 and over. To receive a statutory pension at the level of the at-risk-of-poverty threshold, a monthly gross wage of more than around €3,300 is necessary.
Regions with the highest percentage of people earning less than €2,750 gross per month include Mecklenburg-Western Pomerania (36%), Saxony-Anhalt (34%), and Thuringia (32%). On the other hand, the fewest employees with a wage below this figure are in Hamburg (around 15%).
The issue of low wages has been a topic of debate in Germany, with the Left Party's Dietmar Bartsch stating that Germany is not a high-wage country. He also criticized the government for not setting a minimum wage of €15 as the lowest wage limit and for not determining the impending minimum wage increase by law.
According to Bartsch, around 15.5% or approximately 13.1 million people in Germany are at risk of poverty. This statistic underscores the importance of addressing the issue of low wages and its impact on retirement benefits.
[1] Source: Bundesministerium für Arbeit und Soziales (Federal Ministry of Labour and Social Affairs)
In this context, managing personal-finance becomes crucial for individuals earning less than €2,750 gross per month in Germany, as they may qualify for reduced earning capacity pensions, provided their supplementary income remains below the 2025 limits of €1,638 for a full pension and €3,277 for a partial pension. On the other hand, business owners and employees might need to consider alternative finance options, as the statutory pension only accounts for 53% of gross incomes of those aged 65 and over, and a monthly gross wage of more than around €3,300 is necessary to receive a statutory pension at the level of the at-risk-of-poverty threshold.
