Working in old age – what do i have to consider?

More and more older people work. If you already receive a pension, there are some legal aspects to consider. Copyright by Harm Bengen.

1. Does the employment relationship end automatically when the age limit for the standard retirement pension is reached??

The employment relationship does not end simply because an employee reaches the legal age limit. However, the employment contract or a collective agreement can regulate this. In this case, the employment relationship ends when you reach the age limit.

Reaching the standard retirement age is also not a reason for termination. It is also possible to postpone the termination date of the employment relationship. But you must arrange this with your employer.

2. Can I sign an employment contract as an old-age pensioner??

The employment of old-age pensioners or pensioners with reduced earning capacity is permissible. Reaching the age limit does not invalidate an employment contract.

The employment contract of the retiree is subject to all laws that apply to any employment relationship. For example, the German Federal Leave Act (BUrlG), the Continued Remuneration Act (EfzG), the Minimum Wage Act (MiLoG) and the Part-Time and Fixed-term Employment Act (TzBfG) apply.

If you are employed in a company that has a works council, it also represents you.

3. How much can I earn as a pensioner??

Additional earnings are possible. If you have already reached the standard retirement age, you can generally earn an unlimited amount of additional income.

When this is the case for you can be seen from the pension information provided by your pension insurance company.

4. Do I have to pay pension insurance contributions in this case?

You do not have to, but you can: If you pay pension contributions, this has the advantage for you that your pension will increase once a year.

In this case, you must declare to your employer that you wish to waive your right to exemption from insurance and continue to pay your own pension contributions. You and your employer pay half of these contributions, as in a regular employment relationship.

5. What can I do if I receive early retirement pension?

This is the case if you:

  • a retirement pension for severely disabled persons or
  • receive an old-age pension for those insured for many years or for those insured for a particularly long period of time

In this case, you can also earn additional income. However, you must observe the additional earnings limits until you have reached your standard retirement pension.

6. How high is this additional earnings limit?

In one calendar year – i.e. from 1. January until 31. December of a year – are up to 6.300 euros free of charge. It does not matter in which period of the year you have earned this additional income.

7. What happens if I exceed this additional earnings limit??

If one earns more than this amount, the pension above the 6.300 euros of additional earnings divided by twelve. Of this amount, 40 percent is credited to the pension. The pension is then only paid as a partial pension.

Example: pensioner Else earned 7.500 euros additional earnings. Since 6.300 Euro are free, only the excess amount of 1.200 Euro offset. This results in 100 euros per month (1.200 /12). Your pension will be reduced by 40 percent of this amount, i.e. by 40 euros per month.

8. Does this apply indefinitely, i.e. regardless of how much I earn above the 6.300 euros of additional earnings?

However, this does not apply indefinitely, there is a so-called supplementary earnings cap: each*person has an individual maximum limit for supplementary earnings. For this, the pension insurance considers your income in the last 15 years before the start of the pension.

To find out what your individual supplementary earnings limit is, tell your pension insurance company that you will soon be taking up employment and how much you expect to earn.

The pension insurance company then calculates the pension amount for the following calendar year on the basis of your expected additional earnings.

9. What about additional earnings if I receive a pension for reduced earning capacity or occupational disability??

In the case of a pension due to full reduction in earning capacity, the fixed supplementary earnings limit of 6 % also applies.300 euros. If it is exceeded, the amount in excess of this is divided by twelve – as with the early retirement pension – and 40% of this is credited to the pension. Here, too, there is a so-called supplementary earnings cap, which is calculated for you by the pension insurance company.

In the case of a pension due to partial reduction in earning capacity, the pension insurance company assumes that you will earn additional income – as far as possible – anyway; the additional earnings limit for 2019 is therefore at least 15.138.90 euros.

If this limit is exceeded, as with other pensions, the amount in excess of this limit is divided by twelve and 40 percent of this amount is deducted from the pension. There is also a supplementary earnings cap calculated individually for you here.

10. Can the employment relationship of a pensioner be limited in time??

It is generally possible to limit the term of an employment contract with a pensioner. However, the rules of the Part-Time and Fixed-term Employment Act must be observed. A distinction is made there between a fixed-term contract without a factual reason and a fixed-term contract with a factual reason.

However, it is not possible to limit an employment contract to a fixed term if there was a previous employment relationship between the employer and the employee. If you conclude a new fixed-term employment contract with your previous employer immediately after the old employment relationship, the fixed-term contract is invalid.

You can agree a fixed-term contract with a material reason, for example, for vacation, sickness or pregnancy replacements. The training of a successor also constitutes a material reason, as the Federal Labor Court decided not long ago. In these cases, the employment contract ends when the purpose of the fixed-term contract has been achieved. So when the vacation or the illness is over, the successor is trained.

Here’s what we say:

Please note that these general explanations cannot replace a consultation with the statutory pension insurance. So if you are planning to work as a pensioner*, you should definitely contact your pension insurance company beforehand.

Legal basis

§ 41 Abs 1 SGB VI

§ 41
Old-age pension and protection against dismissal

1The insured person’s entitlement to a pension due to old age is not to be considered a reason that can cause the termination of an employment relationship by the employer according to the Protection Against Dismissal Act. 2An agreement that provides for the termination of an employee’s employment without notice at a time when the employee may apply for a retirement pension before reaching the standard retirement age shall be deemed to have been entered into with respect to the employee upon reaching the standard retirement age, unless the agreement was entered into or confirmed by the employee within the three years preceding that date. 3If an agreement provides for termination of the employment relationship upon reaching the standard retirement age, the parties to the employment contract can postpone the termination date, if necessary several times, by agreement during the employment relationship.

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