So You've Never Worked, What About Retirement? Your Guide to Pension Benefits for Parents
Unemployment Benefits: Amount received by those with no work history - Unemployed Lifetime Pension: Amount Received for Those Without Work History
By Matthias Urbach
- 3 Min
Let's get real here: if you've never held a job, don't expect a cushy pension. However, there's a silver lining for parents who've raised multiple children.
There's a loophole - a pension claim for parents who've raised more than one child. The pension insurance recognizes child-rearing as work too! Want to know more? Read on.
But remember, the state doesn't leave its citizens high and dry. If you're unable to earn and aren't old enough to retire, you might be eligible for citizen's allowance (rebranded from "unemployment benefit II," colloquially known as "Hartz IV") or the so-called basic security.
Basic Security - The Fallback Pension
They say the best is saved for last. If you haven't saved enough for retirement or can't provide for yourself income-wise, basic security is for you. The German Pension Insurance estimates that if your monthly income is below 1062 euros, you should double-check your entitlement to basic security.
The conditions for basic security and citizen's allowance are strikingly similar. Both benefits require an application to the local social welfare office, and the process is repeated annually. You can apply for basic security even at the pension insurance, which forwards the application to the social welfare office.
Maintenance and More
The state takes things seriously when it comes to social benefits. They expect recipients to deplete their assets first. Plus, parents or children with an income over 100,000 euros may be called upon for maintenance.
Basic security isn't all about cash either. Any assets, income, maintenance payments, rental income, interest, life insurance, or widow's pensions - it all goes into the calculation.
Parents - Your Work is Valued
According to the German Pension Insurance, parents can assert a pension claim despite no professional activity - the so-called child-rearing periods. Each child earns a parent one of the following:
- three years (children born after 1992)
- two and a half years (children born before 1993)
Remember, only one parent can claim these child-rearing years for each child. However, parents can share the "waiting time." It's about who primarily raises the child. The pension years are available only if the parent doesn't have other child care claims, like civil servants.
Parents can acquire a pension claim after five child-rearing periods (12 years). But, even four children's worth of child-rearing periods may not be enough for a pension claim exceeding basic security. The pension insurance pays a maximum of 451 euros (as of April 2024) for a parent who's never worked for four children.
For more details, head over to the DRV website.
Bonus: Extra Benefits for Parents
As a parent, there's more to look forward to. Check out these additional benefits:
- Deutschlandstipendium and other educational scholarships offer financial assistance, even for parents.
- Family Benefits (Kindergeld): Apply through the Family Benefits Office if you have one or more children under 18 (or until 25 if they're still in education or training). The amount varies by the number of children.
- Riester Pension Scheme: If you have a regular income, especially beneficial for families with multiple children, consider this scheme. It comes with a child allowance of €300 per child born after 2008.
Stay informed, and good luck with your pension journey!
- Basic Security
- Pension
- Children
- German Pension Insurance
- DRV
- Retirement Provision
- Pension Claim
Additional Insights:
While the primary focus is on parents, it's worth noting that Germany offers several scholarships, family benefits, and pension schemes that can provide financial support for families with multiple children. Explore these options to optimize your income and pension prospects.
- Although a lack of employment history may bar you from a substantial pension, the German Pension Insurance acknowledges child-rearing as work and offers a pension claim for parents who've raised more than one child.
- If retirement provisions are insufficient and you're financially dependent, consider applying for basic security, which could potentially serve as a fallback pension. The state also offers citizen's allowance as a safety net for those who are unable to work and aren't old enough to retire.
- When considering the pension benefits for parents, it's essential to understand that each child provides one of the following vocational training years for a parent: three years for children born after 1992, and two and a half years for those born before 1993. However, only one parent can claim these child-rearing years per child, and the total pension claim may not exceed 451 euros (as of April 2024) for a parent who's never worked for four children, even with five child-rearing periods.
