Continue working as a pensioner: this is how it works

Pensioners who continue to work even in actual retirement are no longer a rarity in times of old-age poverty. Therefore, the question often arises as to whether you are still allowed to work at all as a pensioner and how pension and salary fit together.

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In Germany, there is no law that prohibits continuing to work at retirement age. Those who want to supplement the household budget as a pensioner or who do not yet want to give up their job are generally allowed to do so. However, there are some rules that retirees should follow to avoid jeopardizing their own pension entitlement.

It is essential to pay attention to the additional earnings limits

How much you are allowed to earn on top of your pension in retirement initially depends on your age. There are no additional earnings limits once the standard retirement age has been exceeded. There is only a limit for pension forms that are chosen before reaching the statutory retirement age – the so-called early pensions. Examples of such pension forms are the old-age pension for long-term insured persons, old-age pension for women or severely disabled persons or partial retirement. Here the rule is: the more you earn in addition, the lower your pension will be. In extreme cases, the pension payment can even be reduced completely to zero.

In this context, additional earnings of €450 per month are unproblematic if you receive a full pension. This monthly sum may even be doubled twice a year, so that there is the possibility of being paid overtime or receiving a Christmas bonus. If you are only receiving a partial pension, there is no fixed additional earnings limit. How much is deducted from the pension payment is calculated individually by the German pension insurance company.

Working instead of vs. in addition to the pension

In addition to certain earnings limits, you should also consider whether you will receive pension payments at all in addition to continuing to work, or whether you will live solely from your professional activities. In the German pension insurance system, it is possible to continue to work normally after reaching retirement age and thereby forego one’s own pension entitlement for the time being. This is also rewarded: for every month worked without drawing a pension, the later pension entitlement is increased by 0.5.

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However, if you claim your pension and continue to work, you do not have to report this to the German pension insurance. You will then receive more from your job in net terms, as you do not have to pay contributions to pension and unemployment insurance. Finally, from the point of view of social insurance law, your working life ends when you receive your old-age pension. Also the contribution rate to the health insurance decreases, since one does not receive any more sick pay with reaching the regular age limit and must pay only the decreased contribution rate.

From a purely labor law point of view, there is no problem if one is gainfully employed beyond the standard retirement age. An employment relationship does not automatically end by law as soon as you reach 65 or older. 67 years old – however, the situation is different in some employment contracts. Many contracts contain a clause stating that the employment relationship should end automatically upon reaching retirement age, without the need for notice of termination. From the point of view of tax law, there are no special features for working pensioners. If a pension is drawn in addition to the salary, both incomes are added together and taxed jointly if the salary is over €450. However, a special tax allowance applies to pensioners.

Remember!

Since labor law cases should be solved quickly, we generally offer an initial consultation without delay. If possible on the same day, otherwise the next day. Write us a message or call us directly. We are available by phone from Mon-Fri in the time from 08:00 – 18:00 clock.

Also interesting:

Minimum wage

Labor law knows a total of six types of minimum wage:

  • the general minimum wage on the basis of the Minimum Wage Act; by generally binding collective agreements on the basis of the Collective Agreement Act; by generally binding collective agreements on the basis of the Employee Posting Act;
  • the Minimum wage for the care sector by legal decree on the basis of the Arbeitnehmer-Entsendegesetz;
  • Wage floors for temporary workers on the basis of the Employee leasing law;
  • Minimum procurement wages according to the procurement laws of the federal states, minimum procurement wages do not include an individual entitlement of the employees to a minimum wage.

Remember!

Since labor law cases should be resolved quickly, we always provide an initial consultation without delay. If possible on the same day, otherwise the next day. Write us a message or call us directly. We are available by phone from Mon-Fri in the time from 08:00 – 18:00 o’clock.

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