BERLIN, May 29 (Xinhua) -- The poverty risk rate for people aged 65 and over would rise by up to 20 percent if the German pension level continued to fall and the framework conditions did not change, according to a study by the German Institute for Economic Research (DIW) published on Wednesday.
The DIW study showed that under current laws, the German pension level is expected to fall continuously to around 43 percent in 2045 from 48 percent today.
Since the early 2000s, Germany's pension level has fallen by around 10 percent. Without this reduction, the study authors estimated that poverty among the older population would have been "significantly lower".
"The danger of poverty in old age threatens to increase as a result of falling pension levels," said DIW pension expert Johannes Geyer and one of the study authors.
Old-age poverty in Germany is affecting people who have less than 60 percent of the median income at their disposal and the study found a "strong correlation between pension levels and poverty risk".
According to calculations by the DIW researchers, if the pension level in Germany were to be raised by 1 percent, then the risk of poverty would decrease by more than 1 percent.
German Minister of Labor and Social Affairs Hubertus Heil recently presented a draft law to supplement from 2021 the basic pension for long-term, low-income earners in Germany who had paid pension contributions for 35 years but were still receiving barely more than the basic pension.
This proposal "would definitely reduce the risk of poverty" but it would also improve the situation of those pensioners who already earned more, Geyer told Xinhua on Wednesday.
The draft pension supplement proposed by German Labor Minister Heil would not however, benefit "extremely poor" old-age pensioners in Germany, emphasized Geyer.
The German economic institute study underlined that measures for statutory pensions and private provision were needed "as quickly as possible".
The DIW study noted that annual adjustment of old-age pensions in Germany in principle follow the development of wages and salaries subject to social insurance contributions.
However, several reforms since the beginning of the 1990s have changed the German pension adjustment formula so that the level has fallen considerably in recent years and will continue to fall in future, according to the DIW study.
The statistical average, which measures the ratio of standard pension to average wage, has been at the center of the pension debate in Germany for a number of years.
The current coalition government in Germany has not discussed an increase in the pension level. However, the social democrats were able to secure agreement that the German pension level must not fall below the current level of 48 percent by 2025.
