Around 600,000 people in Germany will retire and receive a tax-free inflation bonus of 3,000 euros, German media write.

These are retirees from the public sector. They are now benefiting from the collective agreement that was recently reached between employers and unions in the public sector.

A wage increase of 5.5 percent has been agreed from March 1, 2024. Until then, a tax-free inflation bonus of 3,000 euros will be paid out gradually. This regulation also applies to municipal employees.

“A draft law is currently being prepared for a system-compatible transfer of the results of the collective bargaining negotiations of April 22, 2023, to civil servants, judges, soldiers, and pension recipients,” the responsible ministry stated to German media.

In the first round of payments, 1,240 euros will probably be paid out

According to the collective agreement, the first installment of 1,240 euros should be paid out in June. It is still being negotiated in what steps the rest of the 3,000 euros will be paid out.

The fact is that retirees, who are on average already financially better off than average retirees, are now also receiving special tax-free benefits. German media state that this measure may seem unfair to some.

Although pensions will now also be increased in July, the adjustment with the increase of 4.39 percent (West) and 5.86 percent (East) does not compensate for the additional burden caused by inflation.

In April, inflation was a high 7.2 percent.

Source: fenix-magazin.de