Pensioners in Germany
Pensioners in Germany
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With JIG.World stay fully informed and well advised on how to make the most of your pension entitlements in Germany!
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1. Pension entitlement through contribution payments: A detailed overview
Pension insurance contributions
- Automatic payment of contributions: If a skilled worker from abroad works in Germany and their income exceeds the marginal earnings threshold (520 euros per month, as of 2024), contributions to statutory pension insurance are automatically paid.
- Distribution of contributions: The current contribution rate is 18.6 % of the gross salary, whereby the amount is divided equally between the employee and the employer. Example:
- Gross salary: 3,000 euros per month
- Total contribution: 558 euros (279 euros each from employee and employer) -
2. pension entitlement through payment
- Basis: The later pension depends on the duration and amount of the contributions. The more years and the higher the contributions, the better the pension entitlement.
-Example:
- A skilled worker pays 279 euros a month into the pension insurance scheme for 20 years.
- The pension amount is calculated on the basis of so-called earnings points, which are based on the average income and the contribution period. -
3.Drawing a pension abroad
- Pension payment abroad:
If the skilled worker leaves Germany, the pension entitlement is retained. The pension is transferred to the respective country.
- Regulations:
- Existing social security agreements (e.g. with EU countries, Turkey or the USA) regulate how the pension is paid out.
- However, deductions may be made for taxes or bank charges. -
4.Different types of pension
1. old-age pension:
- Regular old-age pension from the age of 67 (for those born after 1964).
- Earlier pension for long-term insured persons (e.g. after 45 years of contributions).
2. reduced earning capacity pension:
- Entitlement in the event of total or partial incapacity to work due to illness or disability.
3. survivor's pension:
- Widow's and orphan's pension for relatives after the death of an insured person
4. special regulations for long-term insured persons:
- Possible from the age of 63 if 35 years of insurance have been completed (with deductions). -
5.Why is statutory pension insurance important?
- Security in old age: It provides a financial basis for retirement and is particularly mandatory for employees.
- Solidarity principleThe pay-as-you-go system ensures that the contributions of working people are used directly for pensioners, which means that the system remains stable even in the event of economic fluctuations. -
6.examples of skilled workers from abroad
1. long-term activity:
- An engineer from India works in Germany for 25 years and pays into the pension insurance scheme. This entitles her to an old-age pension, which is paid even after she returns to India.
2. short-term activity:
- An IT specialist from the USA works in Germany for 5 years. After termination of his employment relationship, he can have the contributions paid reimbursed in some cases (in the absence of a social security agreement) if the minimum insurance period for a pension is not fulfilled.
