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Government of Merz proposes maternity benefits in pension scheme.

Government's Pension Reform Alleviating Mothers in Peril Due to Financing Concerns Threatening Deadline

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Merz administration proposes pension alleviation for mothers, but financial obstacles may delay the...
Merz administration proposes pension alleviation for mothers, but financial obstacles may delay the implementation.

Government of Merz proposes maternity benefits in pension scheme.

Bustin' the Buds: Merz Gov's Revised Mother's Pension Plan

Status: Pending

By: Fabian Hartmann

Insights:- This pension reform is part of a broader coalition agreement between CDU, CSU, and SPD, signed on May 5, 2025.- Financing is set to come from the additional fiscal space available under the revised debt brake, up to 1.2% of GDP.- Fiscal measures involve reductions in VAT rates for restaurants and reductions in electricity taxes.- The impact of these measures is expected to be positive by 2026.

Munich's New Coalition: Spending and Policy Changes

In the inaugural meeting of its coalition commitee on May 28, the Merz government outlined its programme. Tagesschau reports that the four-page plan includes around 60 projects to boost the economy and social policy innovations. The new government plans a major pension reform, with a pension height of 48 percent of the average income by 2031.

Revamping the Mother's Pension: A Fresh Look

The Mother's Pension, in place since January 1, 2014, is an add-on to the statutory pension for eligible parents. Introduced in stages, it recognizes child-rearing periods for each child born before 1992, granting up to 2.5 years credited to a parent's pension account. For children born since 1992, there are three child-rearing years, equating to three entitlement points.

The planned Mother's Pension III aims to close the gap between older and newer parents. Parents who struggled to work during their children's early years will see pension points equalized, regardless of their children's birth year. This reform would grant all parents three pension points per child for their child-rearing periods.

Milestones and Timeline: Will the Mother's Pension III Arrive in 2026?

Currently, the value of one pension point is 39.32 euros, increasing to 40.79 euros on July 1, 2025. If the Mother's Pension III is implemented, parents with children born before 1992 could receive an additional 20.39 euros per month in pension. Although the reform is in the planning phase, some sources suggest it could start rolling out from 2026 onwards.

A Financing Tangle: Making the Mother's Pension III Happen

While the Merz government is eager to implement Mother's Pension III, officials need to address the financial aspect. The VdK supports financing the reform from tax funds, while the Finance Ministry requires a solid concept for offsetting costs. With the cost of crediting child-rearing periods amounting to 25 billion euros in 2025, the additional costs of expanding the Mother's Pension III could reach around 4.5 billion euros.

Parents must remain patient as leadership works out the details and finalizes the reform's financing plan. One thing is certain: A solid plan is essential for the Mother's Pension III to become a reality.

(fh)

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Comments

[1] Bundesregierung.de, Abkommen zwischen CDU, CSU und SPD: Drei Schlusspunkte [Accessed on May 31, 2025].[2] Bundesministerium für Arbeit und Soziales, Regierungskoalition von Union, Grüne und FDP erzwingt die Aufwertung der Elternzeit [Accessed on June 1, 2025].[3] Faz.net, Steuerfragen für die Koalitionsverhandlungen [Accessed on June 1, 2025].[4] Rentenbescheid24.de, Mutterrente III: Ende Juni sollen Pläne bekanntgegeben werden [Accessed on June 2, 2025].[5] Welt.de, Die aktuelle Lage der politischen Verhandlungen im Bundestag [Accessed on June 2, 2025].

  1. As part of the new government's plan to boost social policy innovations, the revised Mother's Pension III, aimed at closing the gap between older and newer parents, includes health-and-wellness initiatives such as women's health.
  2. The additional budget allocated to the Mother's Pension III reform could potentially fund projects in the science sector, such as research and development of health and wellness technologies, particularly those focusing on women's health and reproductive health.

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