Additional earnings limit

Additional earnings limits in the German statutory pension insurance (GRV) are regulations that determine the amount a pensioner may earn in addition to the statutory pension without the additional earnings affecting the amount of the pension. At the same time, this also regulates the extent to which a partial pension is entitled if additional earnings are earned. Additional earnings limits only apply to pensions due to reduced earning capacity and to early retirement pensions (before reaching the standard retirement age ). The additional earnings limits are regulated in Sections 34, 96a of Book Six of the Social Code (SGB VI).

Additional earnings limits

The regulations regulate the amount of additional income that pensioners can earn without endangering pension entitlement or payment. At the same time, they enable pension recipients to check, before deciding on the pension, whether and to what extent additional earnings are possible and to apply for a partial pension in this context.

The reason for its introduction was that the pensioners before reaching the standard retirement age (depending on the age group between 65 and 67 years of age) do not burden the insured community excessively by applying for a pension without restrictions on income. The early retirement is intended to completely or partially replace your previous income because you are no longer able to earn enough income to support yourself for health reasons or for reasons of age. In addition, the insured should be given the opportunity not to leave working life abruptly, but rather through appropriate private law regulation with the employer or through (partial) withdrawal from their own self-employed activity, initially to limit their work and gradually to retire from working life and at the same time to receive a partial pension Respectively.

The additional earnings limits must be strictly separated from the income offset in the statutory pension insurance, which only relate to pensions due to death ( parenting pensions , widow's , widower's and orphan's pensions , pensions to the divorced spouse or pensions after the penultimate spouse).

Early retirement pension

The additional earnings limits for recipients of an early retirement pension before reaching the standard retirement age are regulated in Section 34 of the VI of the Social Code.

Insured persons are only entitled to a full pension due to their old age before reaching the regular retirement age if, in addition to their pension, they earn a monthly income from employment or self-employment of a maximum of € 450 (gross) per calendar month. From January 1, 2008 to December 31, 2012, the limit was 400 euros. The income limit may be exceeded twice in the course of a calendar year by up to twice the additional income limit. A special regulation applies to 2020 due to the corona epidemic. The corona crisis has resulted in a particularly high need for medical personnel. But there can also be staff shortages in other systemically relevant areas due to illnesses or quarantine orders. In order to make it easier to continue working or to return to employment after retirement, the Federal Government has raised the additional income limit applicable in the respective calendar year for 2020 from 6,300 euros to 44,590 euros. Annual income up to this amount therefore does not lead to a reduction in an early retirement pension. From 2021, the previous additional earnings limit of 6,300 euros per calendar year will apply again.

If this limit is exceeded, the responsible pension insurance institution checks, depending on the gross income earned , whether and in what amount the old-age pension can be paid as a partial pension. It should be noted here that the calculation of the additional earnings is not based on the lower net payments, but on the gross wages.

Pension due to reduced earning capacity

The additional earnings limits for recipients of pensions due to total reduced earning capacity (VEM) or pensions due to partial reduced earning capacity (TEM) are regulated in Section 96a SGB VI. The transitional provisions of Section 313 SGB VI for pensioners who were already entitled to pensions due to occupational disability before January 1, 2001, as well as Section 302a SGB VI for transferred disability pensions from the period before January 1, must also be observed 1992.

The monthly additional earnings limit for the full disability pension as a full pension is (as with the early retirement pensions) 450 euros (2008 to 2012: 400 euros).

If the additional earnings exceed EUR 450 per month, a pension for full disability is paid as a partial pension of 3/4, half or 1/4 of the full pension. A partial disability pension is then paid in full or as a half partial pension.

Here, too, the pension insurance company calculates individual additional earnings limits for the pensioner when a pension is approved (but at least the minimum additional earnings limits). Exceeding up to twice the relevant additional income limit in two calendar months of each calendar year is harmless. However, the possibility of exceeding it twice per calendar year only relates to the type of pension that has been approved. In the event of a change in the type of benefit, e.g. switching from a pension due to partial disability to an early retirement pension for insured persons who are unable to work or work, the additional earnings limit may be exceeded twice again.

Type of additional earnings

Additional earnings in accordance with Section 34 (3) of the Social Code Book VI (in relation to additional earnings in the case of retirement) include wages, earnings and comparable earnings.

In the case of early old-age pensions and pensions due to full disability, all income from dependent employment and self-employment (possibly also income from photovoltaic systems ) as well as "comparable income" (for example early retirement benefits , remuneration from public service as ministers , diets from state parliament members ) for additional earnings. For farmers who pay tax on their income from agriculture and forestry in accordance with Section 13a of the Income Tax Act (EStG), unlike other self-employed persons, the data in the income tax assessment does not apply. The income calculated by the SVLG is decisive here.

In the case of pensions due to a full reduction in earning capacity, injury allowance and transition allowance from the statutory accident insurance are to be taken into account.

In the case of pensions due to partial reduced earning capacity, wage replacement benefits , which include sick pay , sickness benefit , transition allowance , injury benefit and unemployment benefit, are taken into account as additional earnings , as these are on an equal footing with earned income and remuneration. It should be noted, however, that it is not the payment amount for the service, but the higher assessment fee on which the calculation is based that is used for crediting.

Wages

If, in addition to an old-age pension, the insured receive remuneration from an employment relationship that still exists after the start of retirement before reaching the regular retirement age, this is additional earnings.

Earned income

If, in addition to an old-age pension, insured persons earn income from self-employment after they have retired before reaching the regular retirement age, this is additional earnings. Since, according to Section 15 (1) SGB IV, the determination of profit under tax law must be based on the profit determination regulations of income tax law (Sections 4 to 7k and 13a Income Tax Act EStG), income from self-employment includes the income pursuant to Section 2 (1) sentence 1 no 1 to 3, Paragraph 2 No. 1 EStG, that is

Income from agriculture and forestry (§§ 13, 13a, 14 and 14a EStG)
Income from commercial operations (§§ 15 to 17 EStG) and
Income from self-employed work (§ 18 EStG).

The positive sum of this income represents earned income and is generally to be taken into account as additional income.

Comparable income

Since January 1, 2003, a comparable income earned while drawing a pension must also be taken into account as additional earnings. Belong to the comparable income

Compensation (diets) for members of the German Bundestag , the state parliaments or the European Parliament

Remuneration from a public office (e.g. for ministers, senators and parliamentary state secretaries)

Early retirement benefit within the meaning of Section 3 Clause 1 No. 4 SGB VI

Income from shareholders and managing directors of a GmbH who are considered self-employed under social security law and who receive income from employment under tax law

Pension payments for these people are not additional earnings.

Income not taken into account

Not counted as additional earnings for all pensions before reaching the standard retirement age

Income of a caregiver when a patient because of the care degree attributable care allowance does not exceed, and
Income of a disabled person who receives remuneration as a result of employment in a workshop for disabled people ,
Rental and lease income and
Property income .

particularities

If all (individual) additional earnings limits are exceeded, the consequences vary depending on the type of pension:

There is no entitlement to old-age pensions before reaching the standard retirement age. If the additional earnings fall so that the additional earnings limits are adhered to again, all eligibility requirements for the respective old-age pension must be met again at the start of the new pension.

The pensions for reduced earning capacity are completely suspended . However, the basic entitlement remains in principle. If the additional earnings limits are met again later, the pension payment will be resumed at the request of the insured person. However, if the pension insurance agency determines, based on the extent of the employment or self-employed activity, that there is no longer any reduced earning capacity , the pension entitlement can also be withdrawn.

Individual evidence

Web links

Website of the German Pension Insurance [1]