Parents in Germany can boost retirement with child-rearing credits

In Germany, parents can secure additional retirement benefits by applying for child-rearing time credits. This allowance, which often benefits women, can increase pensions by over €100 per month.

Berlin – The German pension system is known for its complexity, offering various supplements to help retirees increase their pensions. One key supplement is the child-rearing time credit, which can significantly improve retirement benefits, particularly for women, by more than €100 monthly.

Why is there an extra pension for raising children?

Raising children is time-consuming and often requires parents to reduce their working hours. In Germany’s pension system, which is based on a pay-as-you-go model, the younger generation’s contributions finance the pensions of older generations. Children, therefore, play a crucial role in ensuring the system’s functionality.

To compensate parents for career breaks due to child-rearing, the German pension insurance system recognizes certain child-rearing periods as contributory periods.

Who is eligible for the pension supplement, and who benefits?

It is essential for parents to apply for the child-rearing credit before retirement to receive the supplement. Applications can be made using the V0800 form from the pension insurance or online through the new pension portal.

Not only biological parents but also adoptive, step, and foster parents can apply for child-rearing credits. Self-employed individuals and freelancers who do not pay into the pension insurance are also eligible. However, only one parent can claim the child-rearing time, though it can be split between them.

How much does the child-rearing time increase the pension?

The child-rearing period increases the pension as if the parents had continued working and contributing after the child’s birth. For children born before 1992, the credit period is 30 months, while for those born later, it is 36 months.

The supplement is calculated by assigning additional pension points. On average, one pension point is awarded per year of child-rearing time. One year of child-rearing time translates to an additional €39.32 in monthly pension. For three years of child-rearing time for a child born after 1992, the pension entitlement increases by approximately €117.96. More children mean more child-rearing credits, which also apply to twins.

What is the “Mütterrente” (mother’s pension)? The “Mütterrente” refers to an improvement in pension benefits for parents whose children were born before 1992. Introduced on July 1, 2014, it extended the child-rearing period from 12 to 24 months. Since January 1, 2019, all parents with children born before 1992 receive 30 months per child. Millions of retirees in Germany currently benefit from this.

What if I have children and still work?

You can still claim child-rearing time credits even if you work. According to the German Pension Insurance, these credits are added to what you already contribute, but only up to the contribution assessment ceiling.

What other benefits are available for parents?

Parents can also benefit from the so-called child consideration period, which allows the first ten years after a child’s birth to count as pensionable time. This helps parents accumulate insurance years, enabling them to retire earlier.

Additionally, the parent who receives child-rearing credits may receive a supplement to the survivor’s pension after the death of a spouse. The amount of this supplement can vary significantly depending on the situation. It is advisable to seek early advice from social organizations or the German Pension Insurance.