In a report of 33 recommendations, one carries the number 22. It runs to three sentences and changes the arithmetic of every self-employed business in Germany: anyone starting up from a still-undefined cut-off date is to be compulsorily insured in the statutory pension system — with no opt-out. What that costs can be stated to the cent. So can what comes back. And the most revealing passage is not the recommendation itself but the impact assessment the commission supplies alongside it.
What the commission recommends
The German pension commission (Alterssicherungskommission) delivered its final report on 23 June 2026. Recommendation 22 reads, in the original:
Die Kommission empfiehlt, künftig alle nicht obligatorisch abgesicherten Selbständigen, die ihre Tätigkeit ab einem Stichtag neu aufnehmen, verpflichtend und ohne Opt-out in die GRV einzubeziehen. Die Versicherungspflicht sollte auch alle Personen umfassen, die bereits jetzt eine selbständige Beschäftigung ausüben. Ihnen soll jedoch ein voraussetzungsloses Herausoptieren ermöglicht werden.
Three sentences, two regimes. Those already trading may leave, and unconditionally — no proof of alternative provision required. New entrants may not. Anyone becoming self-employed for the first time from the cut-off date is in. The cut-off date itself does not appear in the report.
On the size of the contribution, the commission writes that it should follow the standard contribution for the compulsory insurance of craftspeople. As an alternative, a contribution based on taxable income would be possible, “in order to avoid economic overload for those whose income lies well below the reference figure”. For start-ups there is a three-year grace period at half the standard contribution — with an explicit lock: a chain of new foundings is not to trigger another grace period, since “only the first time a self-employed activity is taken up in the course of a working life can count as new”.
Recommendation 22 does not stand alone. The preceding Recommendation 21 states the destination: the commission regards an all-earners insurance (Erwerbstätigenversicherung) covering employees, the self-employed, civil servants, members of parliament and management board members of public companies as “the ideal model of old-age provision”. Recommendations 24 and 25 pull in MPs and board members; Recommendation 26 ends the opt-out for minijobs. The direction is consistent: everyone in.
The coalition committee acknowledged the report on 2 July 2026 and announced that all 33 recommendations would be implemented in full. The pension package is due before the Bundestag after the summer recess and in force in early 2027. The commission considers Recommendation 22 “implementable immediately and without transition periods”.
What it costs
The standard contribution is not an estimate but an arithmetic operation: the nationwide reference figure times the contribution rate. That reference figure rises in 2026 from EUR 3,745 to EUR 3,955 a month; the contribution rate stays at 18.6 percent.
| Case | Assessment base | Contribution / month | Contribution / year |
|---|---|---|---|
| Standard contribution | EUR 3,955 (reference figure) | EUR 735.63 | EUR 8,827.56 |
| First-time founder, 3-year grace period | half the standard rate | EUR 367.82 | EUR 4,413.84 |
| Documented income of EUR 2,000 | EUR 2,000 | EUR 372.00 | EUR 4,464.00 |
| Income at or above the ceiling | EUR 8,450 | EUR 1,571.70 | EUR 18,860.40 |
Two details decide the actual burden.
First, the standard contribution is the starting value, not the cap. Under § 165(1) sentence 1 no. 1 SGB VI, business income equal to the reference figure applies to the self-employed — “but where lower or higher business income is documented, that income”. The documentation cuts both ways. Anyone earning well pays up to the contribution assessment ceiling of EUR 8,450 a month, meaning up to EUR 1,571.70 monthly.
Second, there is no employer share. An employee at the same ceiling sees EUR 785.85 on the payslip; the other half is carried by the employer. A self-employed person carries both halves. At the same insured income the out-of-pocket burden is exactly double — and it falls due before a single invoice is paid or a single order is cancelled. For a business with volatile revenue the problem is not the size of the contribution but its unconditionality.
Where the contribution goes
Here the report becomes unusually candid. Under “Effects and implementation” for Recommendation 22, the commission writes that compulsory insurance for the self-employed would “initially generate introduction gains” (Einführungsgewinne) and raise the benefit level “by up to 0.5 – 0.6 percentage points”. Then comes the sentence that places the whole measure:
“In the long run these gains relativise themselves, because the self-employed build entitlements that later become benefit claims.”
That is not outside criticism; it is the commission’s own impact assessment. Translated: the contribution improves the system’s key figures for as long as money is going in and not yet coming out. The report applies exactly the same logic elsewhere to a rise in the contribution assessment ceiling — there, too, “merely short-term additional revenue (introduction gains)”, there, too, “no systematic relief for the statutory pension insurance”.
That is how a pay-as-you-go system works. The contribution is not invested but paid out to today’s pensioners in the same month. What the payer receives is not a balance but a claim against future contributors.
The size of that claim can be quantified. A year at the standard contribution buys roughly one earnings point. Since 1 July 2026 an earnings point has been worth EUR 42.52 of monthly pension. In nominal terms, before adjustments and before tax and health and long-term care contributions, it takes around 207 monthly pension payments — a good 17 years of drawing a pension — before a single year’s contribution has flowed back. Remaining life expectancy for a 65-year-old man is 18.0 years on the 2023/2025 mortality table.
This calculation is deliberately rough, and it omits one thing in its own favour: pension adjustments raise the earnings point continuously, by 4.24 percent in 2026. Over a 17-year horizon that shortens nominal amortisation considerably. An honest reckoning has to say so. What it still shows is the underlying structure: the standard contribution does not buy funded capital, it buys a position in a queue.
The same budget, the same tax base
The second half of the financing does not run through contributions but through the federal budget. For 2026, EUR 97.55 billion in federal subsidies to the general pension insurance are earmarked; across all chapters the figure is around EUR 128 billion. The subsidies’ share of pension insurance revenue stays constant at 22.2 to 22.8 percent — a good fifth of the system is tax-financed.
The same budget serves other priorities. As of 30 June 2026, the federal government puts its bilateral support for Ukraine at more than EUR 43.3 billion civilian and around EUR 57.6 billion military, delivered or committed for the coming years. Of that, EUR 27.45 billion falls to the Federal Ministry of Labour and Social Affairs for basic income support, and EUR 2.36 billion to the development ministry. Inside that development figure sit EUR 50 million channelled through the KfW into the World Bank’s PEACE trust fund — from which the Ukrainian state budget is reimbursed for, among other things, salaries, pensions and social payments.
What EUR 735.63 is elsewhere
The standard contribution looks harmless as a percentage and does not as an amount. At the 2026 trading band of 2.98 to 3.24 lari to the euro, EUR 735.63 comes to roughly GEL 2,190 to 2,380. Average monthly nominal earnings in Georgia in the first quarter of 2026 were GEL 2,363.80.
The monthly compulsory contribution of a German self-employed person therefore comes to roughly one full average Georgian monthly salary. Georgia’s state basic pension in 2026 is GEL 370 a month below age 70 and GEL 495 from 70 — so the German standard contribution is about five to six times what the Georgian state pays out in pension each month.
This is not an argument that Georgian pensions are good; they are not. It is a yardstick for the absolute size of a sum that trades in the German debate as a “contribution” and that, in a sole trader’s books, is a fixed cost on the scale of an office lease, a leased vehicle or a part-time employee.
What is on the other side
In Georgia there is no comparable compulsory contribution for location- independent self-employed people. The funded pension system introduced in 2018 is mandatory for employees but explicitly voluntary for the self-employed: two percent of income out of pocket, plus a state contribution of two percent on annual income below GEL 24,000 and one percent between GEL 24,000 and 60,000. The construction is what matters: the contributions land in an individual account, not in a pay-as-you-go pool. What was paid in belongs to the payer.
Then the tax side, covered at length elsewhere on this blog: 1 percent income tax on turnover up to GEL 500,000 under the Small Business Status, against a German tax wedge of 49.3 percent for a single average earner. And living costs that, depending on the survey, run roughly 46 to 55 percent below the German level.
The difference is not that provision disappears. It is that it is self-budgeted — and that the means for it exist in the first place. That is a transfer of responsibility, not a gift. Anyone who plans badly ends up worse off than inside the German system.
Two points belong here honestly. First: Georgia is not on the Deutsche Rentenversicherung’s list of agreement states; there is no social security treaty. That is less dramatic than it sounds — under § 113 SGB VI, earnings points from contribution periods inside Germany are counted in full even in a country without an agreement, and the former reduction to 70 percent was abolished for foreign pensions granted from 1 October 2013. Entitlements already earned in Germany are not lost. What falls away are periods outside Germany and the aggregation of foreign insurance periods. Second: health cover in retirement is a separate question and the most common blind spot in this calculation.
What follows from this
Recommendation 22 is not a contribution increase but a change of status. It turns a decision into a duty — for new founders with no choice, for those already trading with a deadline that can be missed. The price is fixed: EUR 735.63 a month on 2026 figures, EUR 8,827.56 a year, carried alone. The return is one earnings point per contribution year in a system whose own impact assessment speaks of “introduction gains” that relativise themselves in the long run.
Anyone already weighing the timing of a location decision now has an extra variable they do not control. The pension package goes before the Bundestag after the summer recess.
The system figures behind it — replacement rate, contribution path, federal subsidy — are in German pension gap: 53.3% replacement rate. How the location’s costs and returns balance overall is in Government ratio 50.3% and German tax burden 2026. Anyone planning departure will find the cost side in Leaving gets more expensive and the full audit in Leaving Germany. The Georgian side of the calculation is in Georgia: 1% tax.
Austria solves the same problem differently and more expensively — the comparison is in Austria’s pension gap.
Frequently asked questions
How much is the compulsory pension contribution for the self-employed in Germany?
The standard contribution to the statutory pension insurance is EUR 735.63 a month in 2026. It follows from the nationwide reference figure (Bezugsgröße) of EUR 3,955 and the contribution rate of 18.6 percent. Over twelve months that is EUR 8,827.56, borne by the self-employed person alone — there is no employer share. If a different business income is documented, that figure applies instead, downwards or upwards, capped at the contribution assessment ceiling of EUR 8,450 a month, where the contribution reaches EUR 1,571.70.
Who would be covered by the planned pension insurance obligation?
Recommendation 22 of the pension commission targets the self-employed who are "not compulsorily covered" — so not those already insured through a professional pension scheme (Versorgungswerk), the artists' social insurance fund, or the farmers' old-age scheme. Of roughly 3.6 million people self-employed as their main occupation in Germany, about 28 percent have such mandatory cover; the remaining 2.6 million would be the target group. Contrary to some headlines, doctors and lawyers with a Versorgungswerk are precisely the ones left out.
Is there an opt-out from the pension insurance obligation?
Only for those already trading. Anyone self-employed when the rule takes effect is to receive an "unconditional opt-out" under Recommendation 22. Anyone starting from the cut-off date onwards is included "on a compulsory basis and without opt-out". The cut-off date itself is not named in the report. For a first-time start in self-employment there is a three-year grace period at half the standard contribution — EUR 367.82 a month on 2026 figures. A chain of new foundings is explicitly not meant to trigger a further grace period.
Do you get the money back as a pension?
A year at the standard contribution costs EUR 8,827.56 and buys roughly one earnings point. Since 1 July 2026 an earnings point is worth EUR 42.52 of monthly pension, gross. In pure nominal terms, before future pension adjustments and before tax and health and long-term care contributions, that is about 207 monthly pension payments — a good 17 years of drawing a pension — before a single year of contributions has come back. Remaining life expectancy for a 65-year-old man is 18.0 years on the 2023/2025 mortality table, and 21.1 years for a woman of the same age. Pension adjustments shorten this calculation; the 2026 adjustment was 4.24 percent.
When is the pension obligation for the self-employed due to arrive?
The pension commission handed over its report with 33 recommendations on 23 June 2026. The coalition committee acknowledged it on 2 July 2026 and announced it would implement the recommendations in full. The pension package is due to go before the Bundestag after the summer recess and to take effect in early 2027. The commission explicitly considers Recommendation 22 "implementable immediately and without transition periods".
Is a German pension still paid if you move to Georgia?
Yes, as long as the entitlements rest on contribution periods in Germany. Georgia is not on the Deutsche Rentenversicherung's list of agreement states, so the foreign-pension rules of §§ 110 ff. SGB VI apply without a treaty. Under § 113 SGB VI, earnings points from contribution periods inside Germany are counted in full even in a country without an agreement; the former reduction to 70 percent was abolished for foreign pensions granted from 1 October 2013. What falls away are periods outside Germany and the aggregation of foreign insurance periods. Health cover in retirement is a separate question and belongs in individual advice.
This article is general information and does not constitute legal or tax advice. The wording of Recommendations 21 to 26, the contribution design, the grace period and the impact assessment come from the “Empfehlungen der Alterssicherungskommission” (BMAS, report of 23 June 2026). The reference figure, contribution rate and contribution assessment ceiling for 2026 are the official social insurance parameters; the current pension value of EUR 42.52 and the 4.24 percent adjustment as of 1 July 2026 come from the Deutsche Rentenversicherung. The number of self-employed people and their coverage structure follow the Deutsche Rentenversicherung Bund, life expectancy the 2023/2025 mortality table of the Federal Statistical Office. Federal subsidy and budget chapter 11 figures come from the 2026 federal budget and the Pension Insurance Report 2025; the Ukraine figures from the federal government’s overview “Bilaterale Unterstützungsleistungen der Bundesregierung für die Ukraine” (as of 30 June 2026) and the KfW development bank’s project database on the World Bank PEACE trust fund. Georgian figures: Geostat (average earnings Q1 2026), the 2026 state budget (basic pension) and the Law on Funded Pensions. The cut-off date of the new rule was not named at the time of writing; the legislative process is ongoing. Last reviewed: August 2026, subject to changes in the underlying data.