Navigating Widow's Pension: What You Need to Know About Calculation with Your Own Pension
Calculating a widower's pension alongside personal pension: An explanation. - Calculating the Widow's Pension in Relation to Personal Pension Benefits
By Tom F. Jones* Approx - 3 Mins
When a spouse passes away, widow and orphan pensions are here to help ensure the survivor's financial security, especially for those without a substantial income. Similarly, an orphan pension is paid out when a parent dies, and the children are still minors or in training. However, these survivor benefits are meant for those with modest incomes, so they get reduced if the survivor's income surpasses a specific threshold.
The rules surrounding survivor pensions can get complicated, considering factors like the pension amounts, tax-free allowances, tax rates, and the deceased's date of birth, retirement age, survivor's age, and marriage date. To get precise advice for your unique situation, it's recommended to consult with experts. Nevertheless, here's a general outline of how the calculations work:
Calculating the Widow's Pension Amount
First, a tax-free allowance kicks in, which is €1,038.05 for singles in 2025. This tax-free allowance is calculated by multiplying the current pension value per pension point (€39.32) by the factor 26.4. If the survivor has younger children entitled to an orphan pension, the tax-free allowance is boosted by child supplements, around €1,500 for two children.
Next, the own net income or net pension is compared to the tax-free allowance. For example, if the monthly net pension is €1,500, after deducting the €1,038 tax-free allowance, €462 remains. The German Pension Insurance Office then deducts 15% of this amount. So, for a net pension slightly above the tax-free allowance, around €69.30 could be deducted from the widow's pension.
For those still working but not yet receiving a pension, their net employment income exceeding the tax-free allowance is considered. Here, 40% is deducted. For example, if someone earns €2,500, after subtracting the €1,038 tax-free allowance, they're left with €1,462 over the tax-free allowance. In this case, €584 could be deducted from the widow's pension.
What Constitutes Net Income?
To determine net income, all types of income are factored in except for means-tested benefits like disability pensions, unemployment benefits, and basic security. Benefits from state-funded pension schemes like Riester and Rürup pensions are also excluded. Consequently, income such as monthly pension, rental and leasing income, capital income (like savings account interest or stock dividends), and self-employed expected annual income are added together. After determining the gross amounts, 40% is deducted for employees to approximate tax and social security contributions of dependent employees. For pensions, 15% is deducted, simulating usual taxes and health insurance contributions. For rental income, 25% is deducted. The remaining values are then summed up to give the net income.
To determine the remaining widow's pension portion, this calculation is repeated.
Taxation of Pension and Widow's Pension Recipients
Regardless of whether one receives only a pension or a widow's pension too, for tax purposes, both incomes are added together, and a basic allowance comes into play. This is the basic allowance for pensioners, which was €12,084 in 2025. This basic allowance is deducted from one's own pension income. Consequently, taxation of the pension commences only from this around €1,000 monthly amount.
According to the Federal Ministry of Finance, as of 2025, new pensioners can receive a gross pension of approximately €16,240 annually without paying taxes on it because: The taxable portion of the pension was 83% in 2024, meaning €13,481 of the €16,240 per year is subject to taxation. Pensioners can initially deduct special expenses and provisions for old age, as well as extraordinary burdens, which is handled through the annual tax return. This reduces their pension, leaving €12,084 of taxable income.
However, the taxable portion of the pension changes each year depending on the year of retirement, and the tax rate increases gradually. By 2040, 100% of gross pension income will be taxable.
- Pension
- Spouse
- Retirement
- The community policy for survivor pensions states that the tax-free allowance for a survivor receiving a widow's pension in 2025 is €1,038.05, calculated by multiplying the current pension value per pension point (€39.32) by the factor 26.4.
- If a widow or an orphan is receiving vocational training and entitled to an orphan pension, the tax-free allowance for the survivor's pension can be boosted by child supplements, which could be around €1,500 for two children.
- net income for calculating the widow's pension includes all types of income except for means-tested benefits, benefits from state-funded pension schemes, and taxation of the pension and widow's pension recipients is done by adding both incomes together and a basic allowance comes into play.
