Income Threshold for Reduced Net Pay to Shift Next Year Under Proposed Reforms
BERLIN – A change in income thresholds impacting statutory health insurance contributions is slated for next year, potentially leading to reduced net income for a wider range of earners under plans being advanced by Labor Minister Hubertus Heil and reforms proposed by the Merz goverment. The threshold at which contributions are calculated-and thus impact take-home pay-will be based on income up to at least 66,150 euros annually, according to the Federal Ministry of Health.
Currently, both compulsory and voluntarily insured members of the Gesetzliche Krankenversicherung (GKV) have contributions assessed on income up to a contribution ceiling. This adjustment means more individuals will see a larger portion of their income subject to the 14.6 percent general contribution rate, or 14.0 percent for those not claiming sickness benefits. These changes are occurring alongside broader government plans to reform the Bürgergeld (citizens’ allowance) system, with labor Minister Heil advocating for stricter measures against those refusing work.
The legally defined general contribution rate currently stands at 14.6 percent of contributions subject to assessment.This rate applies not onyl to statutory pensions but also to pension payments. The proposed reforms come as the government seeks to address concerns about the financial sustainability of social security systems and incentivize workforce participation.
