Read news from:
Austria
SHARE
COPY LINK
For members

PENSIONS

Everything that changes in Germany in July 2020

From higher wages to lower taxes, there's a lot changing in Germany as of Wednesday - and not all of it coronavirus related.

Published: 1 July 2020 09:38 CEST
Updated: 2 July 2020 13:43 CEST
Everything that changes in Germany in July 2020
Clocks in Düsseldorf's Volkspark. Photo: DPA

More summer travel options

The worldwide travel warning is being lifted for all EU member states as of Wednesday, although a travel warning remains in place for 130 countries until at least August 31st. 

That excludes, however, a few popular holiday destinations such as Egypt or the Maldives. 

On Wednesday, travellers from 15 countries – including Australia and Canada – will also be allowed to travel to Germany and the EU again after being put on a “safe list.”

READ ALSO: EU agrees to reopen borders to 15 countries but excludes US from safe travel list

Tenant protection ending

As of July 1st, the temporary special protection against termination of tenancy for tenants (Kündigungsschutz) due to the corona crisis will no longer be valid. 

Berlin graffiti calling for rents to come down. Photo: DPA

For the period from April 1st to June 30th, tenants and leaseholders could not be kicked out for failing to pay rent due to the coronavirus pandemic. However, the rent is still due for this period, and interest on arrears may also be incurred. 

However, a dispute has flared up within the grand coalition over the continuation of the Corona protection against dismissal. The left-leaning Social Democrats (SPD) are demanding an extension, whereas Merkel’s centre right CDU and its Bavarian sister party CSU are against it.

Protests also flared up around the country in response on Wednesday. 

More value for your euro

As part of an economic rescue package Germany launched, the government is lowering the VAT (value added tax) for half a year from 19 to 16 percent. For everyday items such as groceries, it’s sinking from 7 to 5 percent. 

Here’s a look at how much you can look to save on products in furniture stores, the supermarket or when buying a new car.

READ ALSO: What you should know about Germany's VAT cut

Pensions going up

The approximately 21 million pensioners in Germany will receive noticeably more money starting on July 1st. Due to the annual pension adjustment, pensions will rise by 3.45 percent in western Germany and by 4.20 percent in eastern Germany.

The pensions in the east are thus gradually creeping up to the levels in the west. However, not all pensioners will receive the pension increase on the same date.

Coronavirus cases in pets must also be registered

Current knowledge tells us that it’s rare for certain pets and zoo animals to be infected with coronavirus. But that hasn’t stopped some isolated incidents from being reported around the world.

In order to be able to research the potential connection more thoroughly, there will soon be an obligation to report cases of the virus in animals in Germany.

According to Federal Agriculture Minister Julia Klöckner of Merkel’s centre-right Christian Democrats (CDU), a regulation on this could be passed in the Bundesrat on July 3rd. 

However, the owners of the approximately 31 million pets in Germany will not be obliged to have their dogs or cats tested. There is no evidence so far that people become infected with the virus from their pets.

Higher wages for nurses and care workers

To better recognise hospital staff for the tremendous effort they have put in over the last months, Germany will be raising the minimum wage for nurses and care workers to €15 an hour. By 2022, that amount is slated to increase to €15.40 per hour.

In addition to Germany’s legal minimum holiday requirement of 20 days per year, care workers are also slated to receive an additional five days of holiday this year, and six days in the coming year. 

More corona testing at slaughterhouses

Following the incidents at Tönnies slaughterhouse, the meat industry in North Rhine-Westphalia will in future have to have employees tested for the coronavirus at least twice a week at their own expense.

The entrance to Tönnies in Gütersloh, North Rhine-Westphalia. Photo: DPA

The new requirement will apply to slaughterhouses, cutting plants and meat-processing companies with more than 100 employees as of July 1st, according to the State Ministry of Labor and Health in Düsseldorf.

READ ALSO: What you need to know about German meat plant outbreak

Germany takes over EU presidency

From Wednesday until the last day of the year, Germany is officially taking over the EU presidency. Of course, one of the main areas of work is already becoming apparent: the coronavirus crisis. 

Germany's Federal Cabinet has prepared a programme for this under the motto “Together. Making Europe strong again”. 

To put words into action, the German government has already submitted a proposal for a massive €750 billion aid package, of which €500 billion are to flow to the EU states as grants and the rest as loans.

Other big areas of focus will be resuming negotiations about Brexit, as the UK will officially leave the EU at the end of the year, climate chains and international affairs, particularly with China. 

READ ALSO: Merkel's legacy at stake as Germany takes EU reins

 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

RETIREMENT

What Canadians living in Germany should know about pensions

If you spent your career years in Canada but are thinking you might spend your retirement years here in Germany... Here's what you need to know about how your pension rights apply.

Published: 3 September 2024 12:41 CEST
What Canadians living in Germany should know about pensions

Canada has plenty of beautiful landscapes and vistas on offer to match Germany’s Alps and sea views. But the Federal Republic’s cultural offerings and easy European travel connections can still tempt plenty of Canadian pensioners looking for a place to settle down for their Golden Years.

According to population data from Germany’s statistical agency, there were just over 18,000 Canadian nationals registered as living in Germany at the end of 2023. Around 3,500 of those – or just under 20 percent of all the Canadians residing in Germany – are aged 60 or over.

READ ALSO: Canadians in Germany: Who are they and where do they live?

So how do Canadian retirees living here support themselves?

Many are likely to have a nest egg saved up, but pension entitlements may also make up an important part of retirement income and planning. Also, knowing these amounts is crucial for calculating how much you have to pay for things like health insurance.

As non-EU nationals, Canadians looking to retire in Deutschland would need to apply for a retirement visa and register their residence.

You’ll also have to register for public health insurance if you don’t have available private coverage, with required contributions based on your income. Note that this calculation will be on any income you have – not just your pension. There’s no hard or fast rule on how much you should have in Germany, but you should certainly be taking in more than the poverty line, which is €1,200 a month.

How much you need to have may depend on where in Germany you choose to live – with cost of living in your local area taken into account.

So how does receiving a Canadian pension in Germany work?

EXPLAINED: Do your pension contributions abroad count in Germany?

Can you collect your Canadian pension in Germany?

In theory, yes. But there are some clear and stringent conditions attached.

In principle, it is difficult to collect your Canadian pension if you live outside of Canada. Whether you can do so or not depends on if you can get by the 20-year rule.

In general, to be able to collect your Canadian pension outside of Canada, you need to have lived in Canada for at least 20 combined years of your life after you turned 18. If you don’t fulfil this criteria, any pension payments due to you from Canada will stop paying out six months after you’ve been abroad.

There is one notable exception to this though. The 20-year rule also applies to countries with which Canada has a social security agreement.

Is it the Canadian Rockies or the Bavarian Alps? Either way, there are ways for Canadian pensioners to collect Old Age Security. dpa | Katrin Requadt

Canada has around 60 such agreements – including one with Germany, as well as Australia, the US, UK, and most other EU countries. On the other side, Germany has around 20 such agreements, including the one with Canada.

These agreements allow the pensioner to include the years they’ve spent working in countries like Germany regarding the 20-year rule for collecting a Canadian pension.

So a Canadian who lived in Canada until they were 30 and then spent the rest of their working life in Germany would still hit their 20-year rule and be able to collect Canadian pension payments – even if they chose to retire to Germany.

READ MORE: How can pensioners from abroad retire in Germany?

How else does the Canadian-German social security agreement work?

Canada and Germany have had a social security agreement since 1988, and updated it in 2003.

The most basic provision is that you can collect a proportionate amount of your pension from both countries after you retire – if your working life involved periods spent in both of them.

So if you worked five years in Canada and 40 in Germany – you would receive pension payments in your retirement age from both countries. In this example, the Canadian payments would be much less than the German ones – as you spent less time living and working there – but you would still get these payments.

This social security agreement also goes in reverse. Someone who worked less than five years in Germany could still receive a German pension if the time they spent working in Canada during their career pushed them above Germany’s five-year rule for being eligible for a German pension.

Note though that this generally applies to Canadian Pension Plan (CPP) payments. So payments made to the Quebec Pension Plan (QPP) may be treated differently. If this applies to you, you should consult the QPP.

READ ALSO: How long do you have to work to receive a German pension?

How much are Canadian pensions taxed in Germany?

State pensions from any country are treated as earned income by the German system. Therefore, Canadian pensions in Germany are subject to progressive tax rates ranging from 14 percent to 45 percent.

Furthermore, these will generally fall under the Canadian-German Double Taxation Treaty, so if you pay your tax in one country, you shouldn’t need to pay it in another. There are cases though where you may need to prove to the other country that you’ve already paid tax on the income in the other state.

There may also be some specific differences depending on your situation, so be sure to ask for professional advice if you think you need it – and keep all the necessary records.

Please note, we are at The Local are not financial experts. The information above is designed to help, but if you are unsure of what steps to get yourself in order tax-wise, seek professional advice.

SHOW COMMENTS