Return of military service and pension stabilization: Germany passes wide-ranging reforms
The German Federal Council (Bundesrat) approved a large package of laws in its last session of the year, paving the way for extensive changes in pensions, military service, taxes, and public safety measures, to be implemented starting in 2026.
The pension package includes fixing the pension level at 48 percent until 2031 and expanding the increases allocated for mothers. It also enhances supplementary pensions for companies and introduces what is known as the 'active pension', which provides tax incentives for those who continue to work after retirement age. Despite the intense political debate, the reforms were passed after the approval of the Bundestag.
Measures have also been adopted to alleviate the tax burden, where commuters will benefit from an allowance of 38 cents per kilometer starting from the first kilometer, while restaurants will permanently receive a reduced value-added tax of seven percent. Additional discounts for volunteers, union members, and political donations will provide about five billion euros annually.
The Federal Council also approved a new military service law. Starting from January 2026, all individuals reaching the age of 18 will receive a letter from the Bundeswehr (the German armed forces). Men will be required to fill out a service questionnaire and undergo medical examinations, while participation will remain voluntary for women. The duration of service will range from six to eleven months, with incentives including a monthly salary of 2600 euros.
Other decisions include reinstating tax exemptions on agricultural diesel, reducing electricity tax for certain sectors, banning nitrous oxide for minors, and tightening restrictions on what is known as date-rape drugs. Safety measures presented by Health Minister Nina Farken are expected to come into effect starting April 2026.