As of: February 4, 2024, 7:22 p.m
By: Lars-Eric Nievelstein, Lisa Mayerhofer
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The pension regulations have changed: early retirees can now earn unlimited additional income.
A look at the 'dual-earner model' and its advantages.
Berlin – Until the beginning of 2023, only regular old-age pensioners were allowed to earn additional income without any limit.
However, anyone who received an early retirement pension had to expect a reduction in their pension if they continued to work.
But over the course of the corona pandemic, some special regulations were introduced.
For just over twelve months now, early retirees have been able to earn additional income without any limits without their pension being reduced.
You do not have to inform the pension insurance company if you continue to work or start a new job.
“Dual-earner model”: partial pension and salary
This new regulation made the so-called “dual-earner model” possible, as social judge Stephan Rittweger
explained to
Spiegel .
This is a practice in which employees receive a partial pension in addition to their regular salary.
An employee who has already worked for 45 years and has therefore fulfilled his professional years until retirement could retire at 65.
That's two years before reaching regular retirement age.
He can now receive both wages and a pension from the German pension insurance.
To do this, he must apply for a 99.99 percent partial pension from the German pension insurance company.
For example, if he receives 2,000 euros gross in his regular pension, he would have to forego around 20 cents per month in this model.
Otherwise he would already be in full retirement.
The special thing about this model is that those who use it continue to have full social security.
In addition, entitlement to social benefits such as sickness and short-time work benefits remains.
The pension regulations have changed: early retirees can now earn unlimited additional income.
(Symbol image) © Sven Simon/Frank Hoermann/imago/Symbol image
According to the expert, this method is particularly suitable for people who have already accumulated many years of waiting.
For those who have waited 45 years, the whole thing should work “without any problems”.
The model can also be used for employees with a waiting period of 35 years, although discounts are to be expected the earlier this “partial retirement” takes place.
However, it is important to check your own employment contract.
Some contracts contain clauses that provide for the termination of the employment relationship as soon as the employee receives a pension.
In this case, entering partial retirement would not work if the goal is to earn money on the side.
In such cases, the expert recommends a clarifying conversation with the employer.
“Triple earner model”: salary, partial pension, company pension
In addition to the regular pension and wages, there is also the company pension from which employees can earn additional income.
If this is combined with the normal wage and the partial pension, it is called the “triple earner model.” To receive this, employees must first receive a full pension for one month, then reduce it to a partial pension in order to benefit from several of these models at the same time.
However, special requirements must be met for this.
There is also the risk of falling ill during the month of full pension, which would eliminate the right to sick pay.
Nevertheless, this model offers employers the opportunity to retain experienced specialists at no additional cost.
As soon as they realized this, “clauses in the contract would also be changed according to their interests”.
The question is why the legislature allows this obvious “drain” of the pension fund when the pension pots are already strained - and will remain so in the medium term?
According to
Spiegel
, the legislature simply classified the retention mechanism for skilled workers on the labor market as more important.
More workers who pay into the statutory pension insurance secure the model in the long term.
Germans want to retire earlier
Germans are currently tending to retire earlier.
Data from the Federal Institute for Population Research (BiB) shows that many people leave working life at the age of 63 or 64.
Around a quarter of all new pensioners will not have reached the normal retirement age in 2021.
The increase in the employment rate among those over 60 has come to a standstill.
“We can’t afford the pension system for much longer,” said the head of the economists, Monika Schnitzer, to the
Münchner Merkur
.
The federal government already has to “supplement” the pension insurance with 110 billion euros annually.
“If we continue like this, in 25 years every second euro from the federal budget will go into the pension fund as a subsidy.” This problem cannot be solved with more tax money alone.
Stock pensions are currently being discussed in politics as a possible solution.