June 7, 2023

Additional income to the pension

Additional income to the pension

Many people want to continue working after retirement age because they feel fit, enjoy their job or want to supplement their pension. The federal government allows pensioners to earn additional income in old age, subject to so-called additional income limits. Depending on the type of pension received, some special considerations must be taken into account.

Additional earnings before the regular retirement age

Additional income is defined as monthly gross pay, monthly taxable income (income from business, self-employment, agriculture and forestry) and comparable income such as early retirement benefits. If you receive an early retirement pension, such as the pension at 63, it is paid out in full without deductions if the additional annual earnings amount to 6.Does not exceed 300 euro. However, this additional activity must be reported to the pension insurance agency. If the additional earnings exceed this limit, a corresponding amount is deducted from the pension. So instead of the full pension, only a partial pension is paid out. The amount earned in excess of the exemption limit is divided by twelve months. 40 percent of this monthly amount is eventually deducted from the full pension each month.

If you earn 15 euros in a year, for example.000 euros, the figure is 8.700 euros above the allowance of 6.300 euros. On a monthly basis, that's 725 euros. As a result, 40 percent of 725 euros, i.E. 290 euros less of the full pension, is paid out each month. For example, if the monthly amount of the early old-age pension was originally 1.250 euros, you will receive only 960 euros per month in early partial retirement pension due to the additional income exceeding the allowance.

In addition, the so-called additional earnings cap limits the maximum amount of additional earnings. This limit is increased annually as of 1 january of each year. July as an estimate of the expected income for the following year, based on previous income. The additional earnings cap is determined on an individual basis and corresponds to the highest average monthly income in the last 15 calendar years before the pension payments begin.

Once you have reached the regular age limit, you can earn an unlimited amount on top of your pension. The obligation to declare the part-time job and additional earnings to the pension insurance agency is also eliminated. However, if you earn more than 450 euros per month, you must pay tax on the additional income – provided that the pension and the additional income together exceed the basic tax allowance.

Additional income with reduced earning capacity pension

A distinction is made here between pensions for partial and full reduction in earning capacity. There is also an additional earnings limit for reduced earning capacity pensions. In the case of a full reduction in earning capacity pension, an annual allowance of 6.300 euro for additional earnings. If the additional income exceeds this allowance, 40 percent of the difference is offset against the pension payments. In the case of partial reduction in earning capacity, the additional earnings limit is calculated individually and relates to a full calendar year. It is based on the highest annual contributory income of the last 15 years. In 2018, it was at least 14.798.70 euros per year.

Additional earnings for widows'/widowers' pensions

Surviving dependents who receive a widow's or. Widowers' pensions must also comply with exemption limits for additional earnings so that their pensions are not affected by reductions. The allowance for surviving dependents' pensions is linked to the current pension value. Since the 1. July 2017, widows and widowers in the old federal states can earn an additional 819.19 euros per month without being affected by pension cuts. In the new federal states the allowance is 783.82 euros a month. If the current allowance is exceeded, 40 percent of the net income is offset against the pension. Raising a child entitled to orphan's pension increases the allowance. 


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