Political Clash Over Germany's Mini-Jobs Intensifies as New Pension Option Opens
Published on 07/12/2026 at 18:23 | Redaktion boerse-global.de
Chancellor Friedrich Merz and Bavarian Premier Markus Söder have issued a joint rejection of any move to fully insure the country's millions of "Minijob" workers, dismissing expert calls for a mandatory pension contribution system. Their statements on 11 July came just days after a new voluntary opt-in for pension insurance took effect on 1 July 2026 — a change that allows low-earners to retrospectively reverse their previous exemption.
The political standoff underscores a deeper divide. An expert commission on old-age security had recommended scrapping the special status of Minijobs altogether, arguing that a full pension insurance obligation without an opt-out clause would curb old-age poverty. But the government has no intention of following that advice. "Abolishing Minijobs is not planned," Merz said. Söder warned that restaurants, retail and farming would suffer disproportionately under any reform. Business associations had already voiced similar concerns.
Social welfare organisations disagree. The Social Association of Germany (SoVD) contends that making pension contributions compulsory for all Minijobbers would be an effective tool against poverty in retirement.
Since 1 January 2026, the monthly earnings threshold for Minijobs has stood at €603. That figure, up from €556 in 2025, is automatically linked to the minimum wage, currently €13.90 an hour. On 1 January 2027 the minimum wage will rise to €14.60, pushing the Minijob ceiling to €633 per month — or €7,596 a year. Workers may exceed that level in no more than two calendar months, provided the extra earnings do not exceed double the monthly limit.
The new pension option that took effect on 1 July allows Minijob holders who had previously opted out of the compulsory pension scheme to reverse that decision once. The application is submitted through the employer and takes effect the following month. After that, leaving the scheme again is permanently blocked.
For those who choose coverage, the contribution rates in commercial Minijobs are 3.6 percent for the employee and 15 percent for the employer. In private households, the split is 13.6 percent for the employee and 5 percent for the employer. The benefits are modest: on a monthly wage of €603, the pension increase amounts to about €5.68 per year. But the move also secures qualifying periods for pension entitlements, access to transitional allowances and eligibility for Riester subsidies.
Mini-jobs are also becoming a common feature of retirement. According to the Microcensus, 21 percent of people aged 65 to 69 were working in 2024, up from 14 percent in 2014. Roughly half of them are employed in Minijobs. Since January 2023, pensioners have faced no earnings limits whatsoever.
A major tax overhaul planned for 2027 will bring higher basic allowances and adjusted tax brackets aimed at relieving private households. At the same time, the flat-rate tax on Minijobs will rise, while subsidies for tradesmen's services will shrink. Tax experts advise anyone planning such work to commission it in 2026, while the old, more favourable conditions still apply.
