German Coalition Agrees Sweeping Reform: Tax Cuts for Families, Higher Rates for Rich, and Mandatory Day-One Sick Notes
Published on 07/03/2026 at 10:51 | Redaktion boerse-global.de
The head of Germany’s DAK-Gesundheit health insurance fund, Andreas Storm, issued a stark warning on 3 July about the government’s planned labour-market changes. He said the combination of a new requirement for a medical certificate from the first day of illness and the planned abolition of phone-based sick notes would put “massive pressure” on primary care. As an alternative, Storm suggested introducing a partial sick-note model that would allow employees to work reduced hours while officially registered as ill.
His comments came a day after the coalition committee agreed a broad reform package on 2 July. The deal includes not only stricter sick-note rules but also tax relief for families, higher rates for high earners, and a target for budget savings.
Under the tax changes, a family with a gross annual income of €60,000 will save more than €600 per year starting in 2027. At the same time, top earners face higher rates: 45 percent on income above €250,000 and 47 percent above €280,000. The Institut der deutschen Wirtschaft (IW) estimates these new brackets will bring in roughly €3 billion in additional revenue. The coalition also agreed a flat one-percent saving target for the 2027 federal budget, amounting to about €4 billion.
The sick-note provisions have drawn the sharpest criticism. While the text of the agreement states that an Arbeitsunfähigkeitsbescheinigung (certificate of incapacity for work) must be presented from day one, political leaders were quick to soften the blow. SPD chair Lars Klingbeil stressed on the same day that the basic agreement does not mean employees have to drag themselves to a doctor’s office immediately. “We want a sensible implementation,” he said the following day. He added that the SPD had already prevented the introduction of unpaid waiting days. Fellow SPD leader Bärbel Bas announced a thorough review of the impact and noted that the proposal for the stricter rule did not come from her.
Friedrich Merz confirmed on 3 July that companies can continue to grant exemptions from the strict regulation. A sick note must be available from day one, he explained, but it does not have to result from a physical visit to a doctor on that same day.
Green Party figures also pushed back. Ricarda Lang warned on 2 July against symbolic politics, saying the new rules could overload GP surgeries and, paradoxically, lead to more sick days. Green co-leader Franziska Brantner called the overall package timid.
The planned abolition of phone-based sick notes is being defended on the grounds that such certificates accounted for only 0.8 to 1.2 percent of all sick-note issuances recently, according to industry sources. Union politician Warken pointed to ongoing work on new models such as the partial sick note.
Despite all the internal dissent and qualifications, Klingbeil and Merz jointly stated on 3 July that the reform package must now be implemented swiftly. “Prolonged debates must not talk it to death,” they said.
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