Concerns are mounting regarding the planned “Aktivrente” (active retirement) scheme, set to take effect on January 1, 2026, with projections indicating a potentially significant increase in the tax burden for retirees who continue to work.
According to Fritz Güntzler, a CDU parliamentary representative and financial policy expert, a current draft proposal from Federal Finance Minister Lars Klingbeil (SPD) suggests that the progressive tax system could lead to a situation where “almost half of the additional income” earned by working retirees is absorbed by taxes. He described the potential outcome as “absurd” and urged immediate adjustments to the legislative draft, emphasizing that existing tax-free allowances should remain untouched.
The Aktivrente concept aims to allow retirees to earn up to €24,000 annually beyond the standard retirement age without incurring tax liabilities. However, the application of the progressive tax system – a mechanism which adjusts tax rates based on overall income – is now raising concerns.
Echoing these concerns, Reiner Holznagel, president of the German Taxpayer Association, warned of a substantial increase in the tax burden on working retirees. He stated that, due to the progressive tax system, the potential tax liabilities could, in some cases, quadruple. Holznagel emphasized the importance of transparency, cautioning that a failure to clearly communicate the intricacies of the regulations could lead to frustration and disappointment.
A spokesperson for Minister Klingbeil stated that a formal legislative draft concerning the Aktivrente will be presented shortly and declined to comment further at this time.