The Hidden Tax on Family Caregivers Who Work Full-Time
Published on 07/23/2026 at 02:42 | Redaktion boerse-global.de
A new study from the German Centre for Gerontology (DZA) has quantified a bitter irony in Germany’s pension system: employees who care for relatives while holding down a full-time job lose an average of 1.3 pension points. That figure, released Tuesday, translates into hundreds of euros less in monthly retirement income.
The root cause lies in a quirk of the German Pension Insurance system that researchers call the “30-hour trap.” The long-term care insurance fund only covers pension contributions for caregivers who work a maximum of 30 hours per week. Anyone exceeding that threshold receives nothing from the fund for their caregiving efforts.
Additional conditions compound the problem. The person receiving care must be classified at least at care level 2. The care must take place at home — at least two days per week, totalling ten hours. Miss any of these requirements, and the caregiver gets zero extra pension credit for their work.
The DZA examined the birth cohorts from 1946 to 1955 to calculate what happens when the system does pay out. Depending on the care level, qualifying caregivers receive between €10 and €40 more per month in pension. That modest sum does not apply retroactively, and it disproportionately benefits those who already have lower pensions — part-time workers, homemakers and early retirees.
Just as this gap becomes visible, the federal government is planning to cut the contributions further. A draft bill would reduce the long-term care insurance fund’s pension contributions to 70 percent of their current level.
Experts like Ulrike Ehrlich have voiced sharp criticism, calling the plan a disastrous signal. Even Chancellor Merz has expressed reservations.
The reality for many caregivers is that they depend on a full salary and work more than 30 hours a week. The system punishes them twice: first through the immediate strain of juggling work and care, then later through a pension shortfall that no one compensates.
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