The German pension insurance has announced an important change from March 2022: The additional contribution of the health insurance funds will then be counted more strongly than before on the pension. This has an impact on the amount of pension entitlements, but also on the contributions paid by insured persons in the statutory health insurance scheme. Millions of insured persons are affected by the change.
What exactly does the change mean and what impact will it have on the pension? In this article, we will summarize the most important facts so that you, as an insured or retiree, are well informed. We explain how the additional health insurance contribution affects your pension and what options you have to minimize its impact. We also address possible advantages and disadvantages and show alternatives resulting from the change.
New regulation from March: How the additional contribution of the health insurance affects the pension
From the 1. March a new regulation comes into force: the additional contribution of the health insurance now has an effect on the pension. What does this mean exactly and what should you know?
Due to the newly introduced regulation, the additional contribution of the health insurance company will no longer be shared equally between the employee and the employer. In the future, employees must bear the additional contribution alone. As a result, the contribution is deducted directly from your gross income and thus reduces the calculation amount for the pension.
However, there is a limit: the additional contribution of 1 percentage point can no longer be offset against the pension. If the contribution is higher than 1 percentage point, that portion will not be included in the pension calculation.
- Example: If your health insurance company’s additional contribution is 1.5 percentage points, only 0.5 percentage point will be counted towards your pension calculation.
In addition, insured persons who are exempt from paying contributions may be exempt from this rule. This includes, for example, pensioners who receive contributions from the statutory pension insurance scheme.
It is important to know that this regulation is only for the public health insurance. Private health insurance is not affected by this change.
How does this affect the pension?
From March 2022, the additional contribution of their health insurance company will change for many employees in Germany. This means that from then on they will have to pay a higher proportion of their salary for health insurance. But how does that affect the pension?
First of all: the additional contribution has no direct influence on the amount of the state pension. Because this is calculated based solely on premiums paid to date and is independent of current health insurance deductions. However, the additional contribution can have an indirect impact on your pension.
If you have to pay high health insurance contributions for a longer period of time, you will have less money available to invest in private old-age provision or in the statutory pension insurance. This can reduce the amount of your pension at the end of your working life.
It is therefore worthwhile for employees to find out about their pension options at an early stage and, if necessary, take out additional private pension insurance. The option of paying voluntary contributions to the statutory pension insurance may also be worthwhile.
What you can do to minimize the impact of the additional health insurance contribution on your pension?
A change from March affects the contributions of health insurance companies and thus also the pension benefits. The additional contribution increases up to 1.3% of gross income. What you can do to minimize the impact on your pension?
- Check whether it is possible to switch to a more favorable health insurance fund.
- Make sure you get the best possible coverage, but don’t pay more than you have to.
- Review your pension contributions and make voluntary contributions to the pension fund if necessary.
Only early and sufficient provision will allow you to be financially secure in retirement. Seek advice from an independent expert to assess your individual situation.
Contact your health insurance company and pension provider to find out about your options. The impact of the additional contribution on the pension should not be underestimated.
The earlier you act, the better you can minimize the impact.