- PENNED BY Matthias Urbach
- READING TIME - 3 MINS
Unemployment benefits for non-contributors: Amount for those without prior paid contributions - Unemployment and Pensions: Amount Received for Those Who Haven't Paid Contributions
If you're not the working type, don't fret! The state ain't gonna abandon you at the crossroads of life.
There's a loophole for parents who've raised more than one brood, earning them the right to claim a pension claim. Yes, child-rearing is recognized as work too. More on this fascinating trivia below.
That being said, if you've never swung a hammer at a construction site or clucked away at a typewriter, you won't be sipping Old Age Pension cocktails, sweetheart. But the state takes care of those who can't fend for themselves. They'll get either citizen's allowance (previously known as "unemployment benefit II," or "ALG II" for short, and colloquially known as "Hartz IV") or the so-called basic security. Citizen's allowance is comprised of individuals who are capable of work and haven't hit retirement yet, while basic security is the cushion for the fall of those whose pension contributions won't suffice to cover their daily bread.
The Necessary Evil of Basic Security
Basically, basic security is the pension for those who can't slingshot themselves over the tough financial hurdle – neither earning enough to live off their pension contributions nor making enough provisions for their twilight years. The German Pension Insurance offers a handy measuring stick: if you lack more than 1062 euros per month to keep your head above water, it's a sign to check your eligibility for basic security.
The rules for obtaining basic security and citizen's allowance are fairly similar – both require an application at the social welfare office at your residence. In some exceptional cases, you can also file for basic security directly with the pension insurance, which will then pass the application on to the social welfare office. Once granted, basic security lasts for 12 months, so you'll need to reapply year after year.
Mum's Money Matters, Dad's Debts
The state places a condition on these social benefits: recipients must exhaust their assets first. Additionally, parents or children who earn more than 100,000 euros gross per year may be asked to fork over their wealth.
When it comes to a recipient's personal assets, the state isn't as ruthless as you might think. Cash up to 10,000 euros, appropriate household goods, personal heirlooms whose market value exceeds their monetary value, a house or apartment that is proportionate to the state's contributions, and even a small estate are off the table.
The recipient's income doesn't go unnoticed, either. Since we're assuming that you've never worked here, pretty much all the finer points: maintenance payments, rental income, interest, life insurance, widow's pensions – all of these will be deducted from your claims.
The German Pension Insurance has published a brochure that provides a comprehensive rundown of basic security. You can find the PDF here.
Child's Play for Parents
As mentioned before, parents can claim a pension, even if they've never stepped foot in an office. This magic isn't conjured by a wand, though – it's a child-rearing period they've accrued for each kid. Typically, this credit is given to the mother, with one pension year for each child they've raised (except for kids born before 1992, who receive half a year). Accumulate five such years, and they've got their foot in the pension door – the German Pension Insurance calls this the waiting period.
It's essential to note that demonstrating the number of child-rearing periods isn't an automated process. The pension insurance requests an application, known as the so-called account clarification.
Four Kids? Have Four Euros More!
Those child-rearing years can only be attributed to one parent at a time. However, parents can share the waiting period if they've each played an active role in raising their children. It's all about which parent has predominantly been in charge of raising the kiddos. The child-rearing years can be claimed as long as neither parent has additional child-rearing entitlements (like those of civil servants).
In terms of worth, each child-rearing year represents approximately one contribution point. As a result, a parent who has raised four kids benefits as much as a parent who's earned the average salary over those years. Although four child-rearing periods (12 years) are enough for a pension that surpasses basic security, it's worth reminding you that this maxes out at 451 euros per month (as of April 2024) for a parent who has never worked. For more information, kindly visit the DRV website**.
- Child Rearing Period
- Pension
- German Pension Insurance
- Retirement Provisions
- Basic Security
- Citizen's Allowance
- Children
Enrichment Data:
Comprehensive Overview:
In Germany, there is a pension system that rewards parents for child-rearing activities, known as the Erziehungsrente. This system provides parents with additional pension points based on each child they raise, which contributes to their overall pension entitlement. To qualify, parents typically need to have contributed to the German pension system through work or other means.
For parents who have raised more than one child and never worked, there are alternative sources of financial support. In Germany, the state provides Basic Security, which helps some citizens who cannot support themselves due to insufficient pension contributions or other means of supporting their old age. Basic security aims to help individuals meet their basic needs.
Other forms of support may be available for families with children, such as child benefits, but these are typically not directly related to pension claims. Child benefits are financial support offered to families to help cover the costs of raising children[1]. In specific circumstances, such as if a parent has raised children alone due to the death of a partner, they may be eligible for a child-raising pension or other forms of support, but eligibility would depend on the individual's contributions to the German pension system and their specific circumstances[4].
[1] "Kindergeld - Unterstützung für jeden Elternteil" (Child Benefit - Support for Every Parent); Germany.de (June 1, 2022) https://www.deutschland.de/themen/familiengeld
[4] "Erziehungsrente fällt weg" (The Child-raising pension is lost); Focus Online (May 25, 2021) https://www.focus.de/finanzen/lemma/erziehungsrente- explained/erziehungsrente-fallt-weg_id_99707345.html
- The 'Erziehungsrente' in Germany offers pension points to parents based on each child they raise, contributing to their pension entitlement.
- Parents who have raised more than one child and never worked may receive Basic Security, a form of financial support provided by the state to help meet basic needs during old age.
- Eligibility for child-rearing pensions or other forms of support may depend on individual contributions to the German pension system and specific circumstances (e.g., raising children alone due to a partner's death).
- A comprehensive guide to basic security can be found on the German Pension Insurance's website. [PDF Link Provided]
