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Bill rising for early pension payout scheme

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Bill rising for early pension payout scheme
This could be closer than previously thought for German pensioners. Photo: DPA
08:51 CET+01:00
Many more people than expected have applied for an early pension at 63 under new rules meaning they won't see a cut in payments.

The pension office has already handled 110,000 applications and granted them „almost without exception,“ a source inside the bureaucracy told the Rheinische Post.

Over 50,000 more applicants who got their papers in before the end of October are waiting for a decision.

That means that the costs to the pension scheme will be much higher than anticipated – around €1.5 billion annually, rather than €0.9 billion.

And in 2015 costs will double to €3 billion from the €1.5 billion the government had planned for.

Legislation which came into force in July allows people to retire at 63 without penalty, as long as they have paid into the system for 45 years.

Around a third of people born between 1950 and 1963 are believed to fulfil the conditions and huge demand is expected to continue.

"In the next few years 300,000 to 450,000 people could have the right to do this," Ulrich Walwei of the Institute for Labour Market and Career Research (IAB) told the newspaper.

Forecasts show that the scheme will cost between €2 billion and €3 billion annually.

The minimum retirement age will gradually be increased to 65 by 2029.

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