Germany's Minijob Overhaul Sparks Fury as 6.8 Million Face Full Social Charges
28.06.2026 - 16:25:50 | boerse-global.de
A plan to scrap the social-insurance exemption for Germany's "minijob" workers has ignited a firestorm among business groups, regional politicians, and retirees, even as unions and economists argue the move could curb old-age poverty. The proposals emerged from the bipartisan Alterssicherungskommission (Pension Security Commission), which on 23 June handed over 33 recommendations for the future of retirement provision.
The most explosive change would bring nearly all mini-jobs under full social-security contributions. Currently, employees earning up to a monthly threshold pay reduced rates or nothing into pension, health, and unemployment insurance. Under the coalition blueprint from CDU and SPD, that exemption would vanish for roughly 6.8 million people. Only school pupils would keep the special status.
Within hours of the announcement, the German Hotel and Restaurant Association (Dehoga) warned of "catastrophic" consequences, especially in Bavaria, where nearly 1.1 million minijobbers work in hospitality alone. The Mittelstandsunion (MIT), representing small and medium-sized businesses, echoed the alarm. Its Schleswig-Holstein chairman Lange said on 26 June that the reform would hammer the retail, tourism, and food-service sectors, deepening existing labour shortages. He noted that most minijobbers already hold a primary job or are in training.
CSU leader Markus Söder publicly rejected the proposal. Many pensioners, who use minijobs to supplement their incomes, expressed anger: after the change, a monthly salary of €603 would mean roughly €130 in deductions, making such work far less attractive.
Not everyone opposes the shift. The trade unions NGG and ver.di have welcomed it. ver.di chief Frank Werneke demanded a permanent 48 percent floor for the pension level. Economist Monika Schnitzer, a member of the German Council of Economic Experts, described minijobs as a dead end, particularly for women who face a high risk of poverty in old age. Bringing them into social insurance would build genuine pension claims.
Institute of the German Economy (IW) expert Jochen Pimpertz tempered the optimism, arguing that old-age poverty risks are often overstated because private savings assets go unaccounted for.
The minijob rule is only one piece of a much broader pension-reform package that contains several other contentious measures:
- Retirement age: From 2032, it would be linked to life expectancy. Every ten years the age would rise by six months, potentially reaching 67.5 by 2041.
- “Rente mit 63” (pension at 63): The commission recommends scrapping this early-retirement option. The earliest possible exit age would climb from 63 to 64.
- Capital-funded pension: From 2028, a supplementary, state-subsidised pension funded by a 2 percent paritarian contribution is planned. A study by IMK and WSI dated 27 June warned it could hurt economic output and the labour market.
- Broadened insurance base: Self-employed people, civil servants, and members of parliament would begin paying into the statutory pension system.
Handwerkspräsident (Craft Trades President) Jörg Dittrich called for deeper reforms given rising burdens, while the Social Association of Germany (SoVD) cautioned that making second-job earnings less attractive could disproportionately harm women.
The political debate over the entire package is expected to intensify in autumn, after the coalition presents a formal bill following the summer recess.
