Berlin: The German Federal Government has approved an active retirement law that allows those who reach the legal retirement age and continue working voluntarily to receive an additional tax-free income of up to euro 2,000 per month. This measure is part of official efforts to strengthen the labor market and address the shortage of skilled workers.

According to Qatar News Agency, the Federal Government explained that the tax exemption applies to additional income up to EUR 2,000 monthly, while any amount exceeding this limit is subject to taxation.

The statement also noted that the exemption does not include health insurance and long-term care insurance contributions, which remain due.

The Federal Government added that the measure aims to encourage voluntary continued employment among able and willing individuals, and to utilize their professional experience. The results will be evaluated after two years of implementation.

The federal government had approved the draft law, known as the "Active Retirement Act," in the cabinet on October 15th. It then began its parliamentary process in the Bundestag, passing through the Finance Committee on December 3, before being presented to the plenary session. Its approval today followed the final step: the Bundesrat's (Federal Council) approval of the measure.