Pension increase on July 1: Pensioners need to know that now

Created: 07/06/2022 04:52

By: Lisa Mayerhofer

On July 1st, around 21 million pensioners in Germany will receive more money.

(symbol photo) © Westend61/Imago

The pension increases on July 1 between 5.35 and 6.12 percent.

A pension expert explains what retirees should consider - and points out a common mistake in reasoning.

Hanover – On July 1st, around 21 million pensioners in Germany will receive more money.

In the old federal states, pensions are now increasing by 5.35 percent, in the new federal states by 6.12 percent.

The pension adjustment notification states how much your own pension will increase.

However, Hagen Busse, a consultant at Deutsche Rentenversicherung Braunschweig-Hannover, is concerned about the high inflation.

In an interview with the NDR's "Ratgeber Rente" he said: "Inflation is higher than the pension adjustment.

As a result, pensioners no longer have more in their wallets, but less.

That's a problem for all of us.” He also gives practical information for retirees on increasing their pensions.

Pension increase from July: Not for all pensioners at the same time

The annual pension adjustment is not transferred to all pensioners at the same time.

When the increased pension is paid depends on when the pension begins: Those who received their pension by March 2004 will already receive the adjusted pension at the end of June.

If the pension began in April 2004 or later, the plus will not be in the account until the end of July.

The reason: Some of the pensioners get their pension as an advance payment at the end of the previous month, the other part only at the end of the current month.

Payment is automatic.

Pension increase on July 1st: risk of tax liability

Some pensioners will also be subject to tax from this year as a result of the pension increase;

you have to submit a tax return from a certain amount of income - this amount is above the so-called basic allowance.

After all, the basic allowance was increased this year to a total of 10,347 euros - and even retrospectively to January 1, 2022.

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In the previous year, the basic allowance was 9,744 euros.

This means that some pensioners could also be exempt from tax liability as a result of the sharp increase in the basic allowance.

Expert buses warns that affected pensioners have to submit their tax returns themselves.

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In this context, the pension expert also points out another common misconception: "A low pension does not mean that you do not have to pay taxes." Because income is also taxable as a retiree - such as rental income or payments from the company pension.

If you are unsure, you can get advice from the German pension insurance.