Working retirees in Germany drawing a partial pension face a strict new legal threshold for maintaining sickness benefits starting January 1, 2027.
Closing a Long-Standing Financial Loophole
The legislative reform changes how retirees born between 1960 and 1965 receive benefits. For years, many in this demographic utilized a specific financial model by opting for a partial pension set at 99.99 percent of their full pension entitlement.
This approach allowed them to keep their full sickness benefits—paid by health insurance funds during periods of incapacity lasting longer than six weeks—while simultaneously earning an unlimited income.
Confirmation From Oversight Authorities
Both the Deutsche Rentenversicherung and the Sozialverband VdK have confirmed that this strategy will no longer be viable under the new regulations.
Once the law takes effect in 2027, the hard limit of 66.66 percent serves as the definitive cutoff point for coverage. If a retiree’s partial pension payment sits above this percentage, they will be entirely excluded from receiving sickness benefits in the event of a long-term illness.
Mandatory Deadlines for Pension Adjustments
Retirees who wish to retain their access to sickness benefits must proactively adjust their pension status before the law takes effect. The Deutsche Rentenversicherung has outlined two primary options for those affected:
- Reduce Partial Pension: Retirees can lower their partial pension amount to a maximum of 66.66 percent of their full pension.
- Switch to Full Pension: Retirees may opt for a full pension, though this choice results in the permanent loss of the entitlement to sickness benefits for long-term illness.
Applications to modify pension status must be submitted to the Deutsche Rentenversicherung by December 31, 2026. This can be completed through the agency’s online portal or by submitting a formal request via postal mail.
Targeting Specific Working Retirees
If a retiree continues to receive a partial pension exceeding 66.66 percent of their full pension after January 1, 2027, they will no longer be covered by sickness benefits during periods of work incapacity that exceed six weeks.
The change specifically targets those receiving a partial pension who are still employed and relying on the combination of a high-percentage partial pension and the statutory sickness benefit for long-term health insurance protection. The reform is part of the broader effort to stabilize contribution rates within the statutory health insurance system by adjusting benefit eligibility criteria for this specific group.