Blockade in the traffic lights: assessment limit for social security contributions 2025 open

Two weeks ago, the regulation setting the contribution assessment limit for social security contributions was briefly removed from the list of projects being discussed in the Federal Cabinet. The ministry of Federal Labor Minister Hubertus Heil (SPD) now hopes that the regulation, which is important for employees and social security providers, will be decided at the next cabinet meeting on Wednesday next week. But that isn’t certain either.

“We are aiming for a cabinet discussion on November 6th,” a spokeswoman for the Federal Ministry of Labor told the German Press Agency. When asked, the house of Federal Finance Minister Christian Lindner (FDP), who had recently been on the brakes, simply said that it does not comment on cabinet appointments in other departments.

The German pension insurance does not yet see any reason for alarmism. In order to ensure the processing of pensions starting in January, preparatory work has already been carried out based on the present draft, a spokeswoman said upon request.

High earners should be asked to pay more

According to Heil’s plans, social insurance contributions will in future also be due for higher monthly incomes. More precisely: in statutory pension insurance up to a monthly income of 8,050 euros and in statutory health and nursing care insurance up to a limit of 5,512.50 euros per month. The limits are currently significantly lower. Anyone who earns more does not pay any contributions on the income above. The new regulation is due to come into force on January 1st, which would place a greater burden on higher income earners.

There has been a long-standing dispute in the traffic light about the level of income up to which health and social insurance contributions will be due in the future and about higher tax allowances to reduce income. The FDP supports the latter in the coalition and accuses the Greens of blocking it. The Greens, for their part, are accusing the FDP of blocking the increase in the contribution assessment limit.

The contribution assessment limit is linked to tax issues

In mid-October, Lindner told “Bild”: “As long as there is no clarity that we are freeing taxpayers from the cold progression, there can be no adjustment of the assessment limit for social contributions.” According to Handelsblatt, his ministry should also consider whether the system on which the limit is calculated for the following year should be changed.

According to the newspaper, a note from the Ministry of Finance states that the calculation methods for taxes and social security could be aligned. The “update systems” for compensating for the cold progression and for adjusting the contribution assessment limits must be “aligned consistently with one another”. And: “Equivalent to this, the assessment limits would also have to be updated with the inflation rate.”

The pension policy spokesman for the Die Linke group, Matthias Birkwald, followed up weeks ago. He wanted to know from the Ministry of Finance whether there were “concrete plans to change the assessment bases of the social security calculation values” and how the delay in the adoption of the regulation could affect pension insurance revenue and the pension adjustment in 2025. The ministry did not answer his written questions within the scheduled time frame, but instead asked several times for an extension of the deadline.

The German Social Association accuses the FDP of pursuing “client politics” to the detriment of the general population. “Christian Lindner is once again attracting negative attention and is trying to block the adjustment of the contribution assessment limit,” criticizes the CEO, Michaela Engelmeier. The social security systems would face increasing costs if the limits were not adjusted, and it would primarily be people with low and medium incomes who would suffer from a higher contribution burden.