The German government is planning a new compulsory retirement contribution for the self-employed, who reportedly make up about 10 per cent of the country’s workforce.
From 2013, those who are self-employed will need to pay €350 or more per month (increasing with age) to a state or private pension fund. Those earning less than €400 a month will be exempt; so will those over 30 if they can prove they already have adequate retirement planning in place.
Tim Wessels, a 27-year-old computer specialist from Hamburg who set up his own IT business while still in school, is concerned about the impact the new law will have on Germany’s startup and tech scene.
“This is a real problem,” he told online coworking magazine Deskmag. “Freelancer programmers, web designers, web developers, these people are affected. It’s already difficult for people in Germany to start their own company, and this is a new huge barrier in your way. If I had had this barrier of 400 a euro month, I would not have been able to develop this [company] while being in school, and building it slowly.”
Wessels is running a petition to oppose the change. If he collects 50,000 signatures by May 22, he’ll be given a day at the Bundestag to present his case to lawmakers. One of his particular concerns is that the new contribution will be fixed rather than related to income.
It’s worth remembering the new law is designed to protect freelancers from themselves – in other words, the risk of poverty in old age if they fail to adequately plan for retirement. A Federal Ministry of Labour position paper found so far only a minority of self-employed professionals in Germany were adequately planning to “protect themselves” in old age.
But is this the right way to go about it? Stay tuned for more details.
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Featured image: Berlin coworking space Sankt Oberholz