No Job, No Pension? Think Again for Parents Raising Multiple Kids!
- by Matthias Urbach
- 3 Min
Unpaid Retirement Benefits: Determining Amounts for Those Without Contributions Made - Unemployment and Pensions: Amount Received if Contributions Neglected
Want the skinny? If you've never worked, don't panic – there might still be a financial safety net for you, especially if you're a parent of multiple children.
But first, let's set expectations straight: Without employment, you won't be receiving a traditional pension. Nevertheless, the German welfare system offers support for those who can't support themselves. Usually, these people are entitled to Citizen's Allowance (Hartz IV), though those who haven't reached retirement age might apply for the so-called Basic Security.
Basic Security: Pension for the Unprepared
You might be wondering, "What's Basic Security?" In essence, it's a financial support system for those who didn't save enough for retirement or couldn't arrange any alternative means of support. The German Pension Insurance (DRV) suggests checking your entitlement if you have less than 1062 euros per month.
Conditions for Basic Security are strikingly similar to those for Citizen's Allowance. To claim it, you'll have to apply at your local social welfare office. Exceptions can be made, though, as applications can sometimes be made directly to the pension insurance, which then forwards the application to the social welfare office.
Some Assets Are Exempt
Remember, the state expects you to exhaust your own resources before receiving aid. However, certain assets are exempted: up to 10,000 euros in cash, reasonable household goods, and personally valuable heirlooms are off-limits. A house or flat is included if it's reasonable given the state's contribution.
Bear in mind that income is taken into account too. Common income sources such as maintenance payments, rent, interest, life insurance payouts, or widow's pensions are offset against your claim.
Parents Raising Multiple Children Can Claim a Pension
Now, here's the twist – parents can indeed claim a pension, even if they've never worked professionally. This "pension" is connected to the time spent raising children, often referred to as child-rearing periods. For each child, one of the parents can be assigned up to three pension years - usually, the mother. If the child was born before 1992, it's only 2.5 years.
To be eligible for a pension claim, a parent would need five pension years. However, the process isn't automatic – an application called account clarification is required.
Pension Credits for Each Child
The child-rearing periods can only be claimed by one parent at a time. Yet, parents can share the "waiting period" between themselves. The parent primarily caring for the child will receive the pension years. These years are valued roughly equivalent to one pension point, and, thus, provide a pension claim similar to that of someone earning the average wage.
Surprisingly, even with four child-rearing years (12 years), the pension might not exceed Basic Security. The DRV sets the maximum pension for a parent who hasn't worked at just 451 euros (as of April 2024) for four children. For further information, visit the DRV website.
Additional Benefits for Parents
Parents looking for additional financial support should explore Elterngeld (Parental Allowance) and Kindergeld (Child Benefit). Elterngeld is an allowance given to parents after the birth of a child, providing financial support during the child's first 14 months. Kindergeld is a monthly payment of 255 euros (as of January 2025) per child.
- Basic Security
- Pension
- Children
- German Pension Insurance
- DRV
- Retirement Provision
- Pension Claim
- Parental Allowance (Elterngeld)
- Child Benefit (Kindergeld)
- The German welfare system offers a financial support system called Basic Security for individuals who haven't saved enough for retirement or can't arrange any alternative means of support, including parents raising multiple kids.
- Parents can claim a pension connected to the time spent raising children, often referred to as child-rearing periods, even if they've never worked professionally. This pension can provide a pension claim similar to someone earning the average wage, but the maximum pension for a parent who hasn't worked is just 451 euros (as of April 2024) for four children.
