On 1 July 2023, pensions in the western German federal states were increased by 4.39 per cent and pensions in the eastern German federal states by 5.86 per cent. This raises the pension value in the West from 36.02 euros to 37.60 euros and the pension value in the East from 35.52 euros to 37.60 euros. Accordingly, the pension values in eastern and western Germany are fully harmonised.
The deadline for the harmonisation of current pension values set by the legislators was 1 July 2024. Higher wage increases in eastern Germany paved the way for the harmonisation of the pension value one year early.
After German reunification, the former German Democratic Republic’s (GDR) pension scheme was incorporated into the Federal Republic of Germany’s pension insurance scheme. However, since the income situation in the East differed significantly from that in the West, the legislator established different values for the calculation of pensions in the former GDR states.
“The different pension values in eastern and western Germany are a thing of the past – that’s good news for our country.”
The harmonisation of the current pension value is an important step towards standardised pension entitlements throughout Germany. For instance, there are still differences in contribution assessment ceilings, i.e. the maximum amount up to which contributions are deductible from assessable income. The harmonisation process is scheduled to be fully completed by 2025.
