Unemployed and Aging: What's the Benefit Amount for Those Without Contributions?

Living Laid-Back: Your Guide to Navigating Retirement Without Work

• Straight Talk from Matthias Urbach
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Unemployed in Retirement: Amount Received When No Contributions were Made - Unemployed and Aging: What's the Benefit Amount for Those Without Contributions?

To put it candidly: If you've never held a job, you won't be entitled to a traditional retirement pension.

However, there's a silver lining for dedicated parents raising more than one child. They can claim a pension entitlement due to the recognition of child-rearing work by the German pension system. Details on this below.

Nevertheless, the government ensures a safety net for those struggling to support themselves. They may be eligible for the Residents' Allowance (formerly "unemployment benefit II," colloquially known as "Hartz IV"). This allowance is intended for those who are capable of working but are yet to reach retirement age and have yet to apply for other benefits.

When Your Pension is too meager: The Basic Security Pension

This pension-like benefits package is designed for those who haven't saved enough during their working career to live comfortably in retirement. The German Pension Insurance recommends checking your eligibility if your pension income falls below €1,062 per month.

Conditions for Basic Security resemble those for the Residents' Allowance, and both benefits must be applied for at the local welfare office where you reside. It's also possible to apply for Basic Security directly with the pension insurance, which will then forward the application to the welfare office. If granted, Basic Security is paid for a period of twelve months, and the application must be renewed annually.

Maintenance Obligations for Parents and Children

The government requires recipients to exhaust their personal savings first before receiving welfare. Additionally, parents or children who earn more than €100,000 per year could be called upon to contribute financially.

Both assets and income are taken into account in the calculation of Basic Security. It's essential to note that parents with no work history will have other sources of income, such as:

• Maintenance payments
• Rental income
• Interest
• Life insurance
• Widow's pensions

All these sources will be factored against the welfare claim.

The German Pension Insurance has published a guide on the details of Basic Security. Find the PDF download link here.

Raising Children: A Pension Boost?

As mentioned, parents who have never worked professionally can still claim a pension based on child-rearing periods. One parent can be credited with three years of pension time per child in the case of children born after 1992, or two and a half years for those born before 1992. This means that with five children, one parent will have acquired a pension claim.

It's worth noting that only one parent may claim child-rearing years at a time. Parents can also choose to divide the waiting period among themselves based on who primarily takes care of the children. However, this won't apply if the parent has other claims for childcare, such as civil servants.

Child-rearing years contribute approximately one contribution point to the pension, equivalent to a pension claim that almost matches the average wage. Still, even four child-rearing years (12 years) will not result in a pension claim that exceeds the Basic Security amount for a parent with no work history. The pension insurance provides a maximum of €451 (as of April 2024) for a parent raising four children.

Ready to learn more? Check out the DRV’s detailed information here.

• Basic Security
• Pension
• Children
• German Pension Insurance
• DRV
• Retirement provision
• Pension entitlement

1. If you haven't held a job in your career, you won't be entitled to a traditional retirement pension.
2. Parents raising more than one child can claim a pension entitlement due to the recognition of child-rearing work by the German pension system.
3. Parents who have not saved enough during their working career and have pension income below €1,062 per month may be eligible for the Basic Security Pension.
4. Parents with no work history, who receive welfare, might be required to contribute financially if their income exceeds €100,000 per year, and these contributions may come from sources such as rental income, interest, life insurance, maintenance payments, or widow's pensions.

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