Social Affairs Minister Andrea Nahles said that “for the more than 20 million pensioners this year's revaluation is good news. They, too will benefit from the good economic situation.”
Low levels of unemployment and increasing wages among those in work mean that there is more money in the state pension fund's coffers for the increase.
The exact level of the change will vary from state to state, with those in the former West receiving around 2.1 percent compared with 2.5 percent for those in the former East.
On an average pension of €900 per month, that would work out to an extra €18.90 in the West or €22.50 in the East
While the increase has been lower than it might have been, due to changes in the way average wages were calculated by the Federal Office for Statistics (Destatis) this year, the government plans to make up the difference in 2016.
Nahles insisted that increasing pensions did not mean that young taxpayers were being overburdened.
Pension contributions had actually shrunk by 0.2 percent in January because of the pension fund's high level of reserves, she said.
She was responding to critics who have accused the government of giving short-term presents to today's pensioners with little consideration for the stability of the system.
Ulrike Mascher, head of pensioners' organization VdK, pointed out that the ratio of pension payouts to earnings is already below 50 percent, boding ill for politicians' aim to stabilize it above 43 percent by 2030.