Retirement benefit
An Age relief amount is a tax credit that a taxpayer is granted if he has completed before the start of the which is determined taxable income for the calendar year, the 64th year of life. The legal basis is § 24a EStG .
Sense and purpose
The legislature has introduced the age relief amount to ensure fair taxation in old age. In contrast to annuities , which are only taxed on the income share , and civil servants' pensions , from which a pension allowance is deducted, employees who receive wages after they have reached the age of 64 would be disadvantaged.
After the Retirement Income Act came into force, the retirement benefit will decrease annually from 2005 onwards. For taxpayers who have reached the age of 64 in 2019, the age relief amount is 16.0%, a maximum of 760 euros and will apply for the first time in 2020.
For individual questions, see BMF letter of February 24, 2005 and BMF letter of May 23, 2007.
Amount of relief
Assessment basis:
- Gross wages (gross amount of income from employment excluding pensions)
plus
- the positive sum of non-work income
- without life annuities ( Section 22 No. 1 Sentence 3 EStG)
If the total of the other income is negative, there is no addition to the gross wages.
In the case of joint assessment, the entitlement to the retirement benefit amount must be checked separately for each partner; there is no doubling of the tax exemption.
The tax authorities automatically take into account the old-age relief amount in the tax assessment.
Table of percentages and maximum amounts
The relevant percentages and maximum amounts for the old-age relief amount depend on the calendar year following the age of 64 and are then fixed for life. The following table from § 24a EStG shows which values are used :
| The calendar year following the completion of the 64th year of life | Retirement benefit as a percentage of income | Maximum amount in euros |
|---|---|---|
| 2005 | 40.0 | 1900 |
| 2006 | 38.4 | 1824 |
| 2007 | 36.8 | 1748 |
| 2008 | 35.2 | 1672 |
| 2009 | 33.6 | 1596 |
| 2010 | 32.0 | 1520 |
| 2011 | 30.4 | 1444 |
| 2012 | 28.8 | 1368 |
| 2013 | 27.2 | 1292 |
| 2014 | 25.6 | 1216 |
| 2015 | 24.0 | 1140 |
| 2016 | 22.4 | 1064 |
| 2017 | 20.8 | 988 |
| 2018 | 19.2 | 912 |
| 2019 | 17.6 | 836 |
| 2020 | 16.0 | 760 |
| 2021 | 15.2 | 722 |
| 2022 | 14.4 | 684 |
| 2023 | 13.6 | 646 |
| 2024 | 12.8 | 608 |
| 2025 | 12.0 | 570 |
| 2026 | 11.2 | 532 |
| 2027 | 10.4 | 494 |
| 2028 | 9.6 | 456 |
| 2029 | 8.8 | 418 |
| 2030 | 8.0 | 380 |
| 2031 | 7.2 | 342 |
| 2032 | 6.4 | 304 |
| 2033 | 5.6 | 266 |
| 2034 | 4.8 | 228 |
| 2035 | 4.0 | 190 |
| 2036 | 3.2 | 152 |
| 2037 | 2.4 | 114 |
| 2038 | 1.6 | 76 |
| 2039 | 0.8 | 38 |
| 2040 | 0 | 0 |
example
A taxpayer reached the age of 64 in 2013. In 2014 he earned the following income: wages of 14,000 euros (including 6,000 euros in pension payments ), income from self-employed work of 500 euros and a loss from renting and leasing of 1,500 euros. The retirement benefit is 25.6% of wages (14,000 euros less 6,000 euros in pension payments = 8,000 euros) that is 2,048 euros, but no more than 1,216 euros. The income from self-employed work and from renting and leasing is not taken into account because the balance is negative (€ −1500 + € 500 = € −1000).
