Berlin
Pensions will increase significantly from July 1st. What sounds like good news could have unpleasant consequences for many retirees.
First of all, this is good news for millions of pensioners in Germany: The interest increases by 4.39 percent in western Germany and 5.86 percent in the new federal states as of July 1. As a result, the pension value should no longer differ in the old and new federal states sooner than expected.
However, the pension increase lags behind inflation rate from 7.4 percent in March, which is particularly difficult for people with small pensions.
And some pensioners will have to swallow another toad. The increase may result in the tax liability slip and have to file a tax return. This is because any increase in pension is fully taxable. On the other hand, part of the rest of the pension remains tax-free. How high this is depends on when you retired.
Pension could be fully taxed from 2040
Anyone who retired last year, for example, has an allowance of 18 percent. 82 percent of the pension, on the other hand, has to be taxed. Bad luck for future retirees: The allowance decreases by one percentage point annually. From 2040, the pension should therefore be fully taxed. However, the last word has not yet been spoken on this matter. The traffic light coalition plans to extend the period to 2060.
Retirees must add the July 1 increase to their taxable portion of their pension. The result is total taxable retirement income. At this point he comes basic allowance in the game. It indicates the amount on which no tax has to be paid. It is currently at 10,908 euros. If the income is above this amount, a tax return must be submitted.
When pensioners do not have to worry about paying back taxes
Anyone whose pension exceeds the magic limit has to pay taxes. However, only on the part that exceeds the basic allowance. For example, anyone who collects EUR 11,000 after the pension increase only pays EUR 92 of the pension income tax.
However, even if you get above the basic allowance as a result of the increase, you will still have to file a tax return, but you may not have to pay any tax. Expenses such as donations, contributions to health and nursing care insurance, medical expenses or income-related expenses can be claimed, as well as, for example, household-related services such as invoices from craftsmen.
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System |
The statutory pension works according to the principle of equivalence and solidarity. |
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annuity types |
Basic, disability and survivor’s pension |
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exceptions |
The self-employed and freelancers are generally exempt from compulsory insurance. |
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financing |
The statutory pension in Germany is generally financed on a pay-as-you-go basis. |
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Problems |
The underfunding results mainly from the increasingly aging population in Germany. |
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Three pillars |
Old-age provision in Germany includes statutory, company and private old-age provision. |
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Origin |
The statutory pension was officially introduced on July 22, 1889 under Chancellor Otto von Bismarck. |
The Bundesverband Lohnsteuerhilfevereine (BVL) has on its Homepage In addition, a table has been compiled showing the amounts up to which you cannot back tax payment have to fear. For the retirement year 2022, for example, this is 14,768 euros. This does not include the energy price flat rate of 300 euros, which must be fully taxed. (took)
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