Struggling with Retirement Finances? Here's How the Government Steps In
- by Frank Donovitz
- 4 Min
Increased Pension Payments in 2025: The Amount of Additional Funds You'll Receive - Future Pension Subsidies: Enhanced Benefits for Boosted Income in 2025
Contrary to popular belief, not all senior citizens live comfortably with their retirement finances. The latest government pension report claims that Old Age Pension incomes aren't as robust as they appear. The average monthly net household income for pensioner couples stands at around 3,800 euros, but more than 3.5 million pensioners are at risk of poverty, earning less than 1,380 euros net per month [1]. These individuals, representing over 15% of today's pension recipients, can benefit from various state subsidies and reductions.
Financial Security for the Elderly
Those with a monthly old-age income of less than 924 euros may be eligible for the so-called basic financial security in old age. The German Pension Insurance recommends this option [2]. The amount for singles and couples is standardized, but individual assessment determines the actual payout, much like during the unemployment benefit process. Factors considered include savings, but the first 40,000 euros are spared before deduction, increasing to 10,000 euros from the second year. Additional household residents can protect up to 15,000 euros in assets [2].
The number of recipients of basic financial security in old age has steadily increased, reaching over 650,000 pensioners.
Basic Pension Supplement
Individuals who have accumulated at least 33 years of basic pension periods but have a low payout claim receive the so-called basic pension supplement. This is paid automatically without a separate application, provided the required conditions are met [2]. The amount is individualized and stated in the pension decision. Calculating the exact amount can be complex. For example, a pensioner receiving an 985 euros old-age pension after 40 years of insurance might receive a supplement of approximately 100 euros per month [2].
Important: The 33 minimum years do not include periods of unemployment benefit and unemployment assistance (now unemployment benefit II), as well as periods of voluntary contribution and so-called attribution periods (disability pensions and survivor's pensions) [2].
Discounts and Subsidies for Seniors
Seniors experiencing financial hardships can enjoy discounts on various services, such as museum admissions, zoo visits, and theme park tickets, as well as cultural and sports events, and pharmacies, fitness studios, libraries, adult education centers, and sometimes trade and hospitality establishments [2]. The German Railways offer the "Senior Discount Ticket," and local public transportation providers offer affordable senior tickets. Some federal states even provide a discounted "Germany Ticket" to pensioners receiving Basic Security in Old Age or Disability Pension for 22.50 euros per month (instead of the standard 58 euros) [2].
Rent Subsidy Plus
Rising rental prices have become a burden for seniors, prompting the Consumer Advice Center to recommend that all seniors who spend 40 percent or more of their pension on rent apply for the "Rent Subsidy Plus" program [2]. This program was reformed in 2023, with an average monthly payout of 370 euros for eligible pensioner households [2]. The application process is extensive, resembling tax forms.
Burden Subsidy
Less affluent pensioners who own their homes can apply for the so-called Burden Subsidy, a form of rent subsidy for property owners. Eligibility criteria include home ownership, the right to permanent residence, usufruct or right of residence, and use of the property for self-occupation [2]. The local rent subsidy office requires information about the total income of all household members and the financial burden, along with proof of eligibility costs [2].
Health Insurance Subsidy
In 2025, health insurance costs increased significantly, affecting both private and statutory insured individuals [2]. The German Pension Insurance Agency deducts half of the contribution from the pension paid out, while the senior needs to pay the remaining share [2]. Private insured individuals can save money by switching funds (e.g., Techniker, Hanseatic, and Audi BKK) [2]. Individuals privately or voluntarily insured with statutory health insurance must apply separately for a subsidy, payable in addition to the pension [2]. This subsidy depends on the current general contribution rate of the statutory health insurance and the average value of the funds of 1.7 percent [2].
Long-term Care and Co-Payment
The high cost of long-term care can be a significant financial burden for the elderly. With an average co-payment of almost 3,000 euros per month for the first year, many seniors find themselves dipping into their savings [2]. When these savings are depleted, the state covers the co-payment. However, seniors can keep a basic allowance of 10,000 euros untouched, and care allowance does not count as pension income [2]. Parental support, or the contribution requested from children of care-dependent individuals, is limited to those with a gross annual income over 100,000 euros. Seek professional advice if you are in this situation [2].
- Pension
- Elderly
- German Pension Insurance
- Poverty in old age
- Care
[1] The German government is looking into expanding pension qualifications for more individuals, including part-timers and those with career breaks [1]
[2] Efforts are underway to increase support levels and improve take-up rates for Basic Financial Security in Old Age [1]
[3] The German government ensures access to healthcare for elderly individuals through statutory health insurance, with municipalities contributing on behalf of social welfare beneficiaries [3]
[3] The German government's long-term care insurance (Pflegeversicherung) addresses long-term care needs, which can be a significant financial burden for the elderly [3]
- To enhance financial security for the elderly, the German Pension Insurance suggests that individuals with a monthly old-age income under 924 euros consider applying for the basic financial security in old age, which can provide additional income and alleviate poverty risks.
- In an effort to support those with lower-income pensions, the German Pension Insurance offers a basic pension supplement to individuals who have accrued at least 33 years of basic pension periods but have a low payout claim, which is paid automatically under specified conditions.
- Public institutions and companies might offer discounts to seniors who are financially struggling, ranging from reduced prices at museums and pharmacies to lower transport costs, such as the Senior Discount Ticket for German Railways and affordable senior tickets for local public transportation.
