Parental leave and pension: that’s how much the state pays extra

0

Children instead of work
Extra money for your pension: This is how much the state pays you for your child-raising period

How to allow parental and parental leave to be taken into account

© Everste / Getty Images

Katharina Grimm

by Katharina Grimm

Those who take care of raising their children and therefore do not work from time to time receive less pension. But the legislature wants to compensate for this disadvantage: Parents receive additional pension points and benefits.

Germany needs offspring – if only so that they can fill the state pension fund. There are currently around 100 employees for around 36 retirees, and in ten years there will be 47 retirees. Only Japan has an even worse rate.

But children are not just a financial burden when they are young. Since the parents – mostly the mothers – usually work less, the pension is also smaller. The legislature wants to cushion this injustice with additional pension points. However, parents have to submit an application (you will get ithere at the Deutsche RentenversicherunG). Parents can take their time until they retire. The experts of the “Stiftung Warentest” recommend, however, to take care of the application early, also to have an overview of your own finances in old age.

Woman counts change

Different pension system

At least 1200 euros pension: why there is no old-age poverty in the Netherlands

But is it even worth it? The most important questions are clarified in the current issue of “Test”. It shows that the child-rearing period increases the pension in the same way as if “mother or father earned an average after the birth and paid contributions together with an employer”, according to the experts. For children born before 1992, the parental leave period is 30 months, for children born later it is even 36 months. Important: Parents who go to work during the parental leave also receive the pension points. However, only up to a maximum limit.

Parental leave and pension

Almost all parents who looked after their child in the first 30 or 36 months are entitled to this. This also applies to adoptive or foster parents. The parental leave is not only taken into account for the statutory pension insurance, but also for the civil service or church care. In addition, it also applies to the self-employed who are not insured in the pension insurance. However: The parental leave is only valid once per child, parents can split it up or have it counted for only one parent.

Old-age poverty in Generation Y

Finances in old age

Millennials are becoming the poverty-stricken generation

But not all of them get the pension points: top earners go away empty-handed. The assessment ceiling determines the income up to which (gross) pension contributions are paid. In the west this amount is 7100 euros, in the east 6700 euros. From an income of around 3640 euros (west) or 3420 euros (east), employees no longer receive the full entitlement for the parental leave. The more the parents earn, the less they get. However, the partners can choose who applies for the parental leave. If one partner earns a lot, but the other earns very little, then parental leave is possibly more worthwhile there. “Self-employed people who are not insured with a pension, such as doctors, tax advisors or lawyers, receive full claims from raising children regardless of the level of earnings,” said the experts from Stiftung Warentest.

education

These are the things parents should teach their children about money


Parents who buy everything for kids are making a huge mistake, believes finance blogger Liz Gendreau. "Parents sacrifice too much for their children", she says "CNBC". But expensive activities and hobbies are also a problem. Parents should balance their own financial needs with those of their children. Children often have no idea what things cost - and just ask. And parents would mistake loving for giving.

Always say yes

Parents who buy everything for kids are making a huge mistake, believes finance blogger Liz Gendreau. “Parents sacrifice too much for their children,” she tells CNBC. But expensive activities and hobbies are also a problem. Parents should balance their own financial needs with those of their children. Children often have no idea what things cost – and just ask. And parents would mistake loving for giving.

More


That’s how much money there is from the state

In an overview table, the product testers have calculated how high the amounts per child are: For example, parents receive around 2.5 pension points for children born before 1992. There are 3 points for all children born later. This currently increases the pension by 85 euros (west) or 84 euros (east) for the first child born before 1992. For the second child it would be 167 euros (east) and 171 euros (west), for the third child 251 euros (east) and 256 euros (west). Children born after 1992 increase the monthly pension by EUR 100 (East) or EUR 103 (West), from the second child onwards, the parent’s monthly pension increases by EUR 201 (East) or EUR 205 (West) .

You can find all information about child-rearing time in the current issue of Test or for a fee at www.test.de.

Also read:

Private or statutory health insurance – when a change is worthwhile

Beware, the home office can be a household trap for women

Mom, dad and three children? That has little to do with Germany’s reality

#Subjects

source site