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Pensions

State pensions. I am entitled to a full British pension, but I have had to apply here in Germany. The German are saying I am only entitles to 200 Euro per month. The British pension stands at around 500 per month. Anyone have any idea how they can do this?

It is nit a surprize that your German pension entitlement from the German authorities is different from your British entitlement from the UK authorities, as they are based on different regulations and preconditions.
If possible, why don't you apply in your home country?
For anything further, consult a good lawyer to advice or represent you.

I believe I cannot apply in the UK as one must apply in the country where social security was last paid. To me it amounts to a punishment and is totally against the idea of a European Union. The question remains, where does the money that I should have got from the UK go?

As I said, there is no EU-wide social security programme - each country has its own rules and amounts paid.
Thus if you get payments in Germany, instead of UK, the money you might have gotten there remains with the UK authorities.
Be glad that, thanks to the EU, you get anything at all from Germany!

There was a misunderstanding on my part; in fairness, because of omissions of info from the Rente office. They have since cleared up the situation and I am quite content. I am pro EU anyway, but my joy about getting "anything" from Germany is tempered, to some extent, by having paid into the social security system there for some 15 years. Nevertheless, I am grateful to the people who posted and perhaps now that I understand how the system works, I could help anyone with a similar confusion.

Hi John,
read your post just this morning.

It might help if one understood where pension funds came from and how this mechanism now directly affects your retirement, today :

A fact not known by many :

1) the world's first state run pension fund was announced in November 1881 in Germany and became a legal obligation in Mai 1889 at the Reichstag through Otto von Bismarck.
2) Paul Julius Reuter (owner of Reuters and German Immigrant) setup the first private pension fund in 1882 and many private railroad companies followed suit. (until that time, off course, globally , there was state support for other means - ie like for poor people, beggars or soldiers (latin origin of pension for disabled soldiers families) but never for old-age pension, per se.




Why is this relevant?

Because how the mechanism works :

Back then (after 1889 in Germany) a person were obliged to contribute  between 16-70 age at 1,7% of his/her earnings supported equally by his/her employer.  Payable afer he/she gets older than 70 and only if he contributed more than 30 years. in 1880 the average lifetime of people was 40 years. So do service, pay first then enjoy (if you survive that long). (US introduced it for civil servants in 1920, UK in 1908 but always on the premise of upfront savings). Most countries have plundered these funds over the years (making war/building hospitals ...doing other stuff) so  nowadays it's basically a rolling system where the pension-fund payments of citizens today serves to support the elderly that have allready contributed before, and receives in relation to that overall pool). But the principle remains the same. and it is not funded by Tax/ VAT - rightly so.




From the former information it's easy to figure out who owes you what - where-ever you contributed to the pension fund of that country. if you contributed partially, you'll receive also partially.
So I assume that you paid your part (15 years in Germany instead of the full 40 years). It's not possible to receive pension from both countries at the same time. 
A CEO will have a different contribution due than an jobless person, but also receives more, accordingly.



That figure of 200€ per month in Germany is hence for somebody that was jobless all his life or never contributed a penny to the state pension fund (ie a independent contractor can avoid paying state pension, but then have to secure his own savings from which he/her can live from).  But it remains that the mentioned 200€ is more for humane social reasons a opposed to the right by earning it through contribution. Simply put - 200€ is a favour, because they are nice and are taken away from other people that have contributed 40 years long. This mechanism only works if the relation of people contributing 40 years long is much much higher than those that evaded/cannot contribute.



A large number of contractors unfortunately spend it on luxuries during their lifetime. I think it's fair that those that enjoyed such evasive measures (and spend that 10% otherwise) life-long are not entitled to similiar benefits as a low-income worker that contributed his/her part 40 years long. Social fairness afterall. The EU should never aim to equal it out due to the fact that there are different living standards and costs. In retrospect, if you do contribute, ideally, it should be to one specific country only (or payed out and transferred  where you finally prefer to stay - that option is legally possible in UK & Germany)


I guess this message is maybe 40 years too late for you but maybe it can be helpful for others that still have >20 years left

Well, thank you for that, but I should explain how my situation developed. As a self employed person in Britain, I continued to pay until the pension people called me and said I had paid the full amount and that paying anymore would be pointless and not required. Meantime, I was paying into the German system at the same time, hence 15 years. Finally the German Rente will pay me 200 and the Brits will pay the full pension and transfer it from England. Luckily, I do not depend solely on this as income, because whilst the Germans have paid, the Brits still haven't managed to get it together, meaning that there is an outstanding payment, going back to November. Only minor problem has been that the German office have not accepted 2 years of education, which was a Pre Diploma course for which there was no qualification. In Germany, there must be! It was necessary to have, to do the degree course, which they did accept. Thank you for your comments and I hope that together we have given a little info that may help someone.

If, after 15 years of contributing the legally prescribed percentage of your income that must go into the Rentenversicherung, you get only EUR200/month out, you must have earned next to nothing all these 15 years.
Something doesn't sound right here!

John Bull :

....As a self employed person in Britain
....Meantime, I was paying into the German system at the same time, hence 15 years.
Finally the German Rente will pay me 200

So the Deutsche Renten versicherung has a good broschure spanning 32 pages on how the formula  works. It was also interesting for me to revamp my understanding :
http://www.deutsche-rentenversicherung. … ender.html
(note - only for "old" German States, the "new" states maintains different benefits& conditions).

Described in the simplified way:
Your Brutto salary earns you Pension Loyalty points.
Being an "Average" working & earning citizen gives you exactly 1 loyalty point per year (ie for 2016 the average citizen had 36267€  brutto salary per year). And that earned him 1 point.
All those points are added per year up till his pensionable age of 67.

Using that formula and calculating 200€ per month pension it is possible to inversely calculate what you have contributed (as rough example) to the pension fund :

In attached picture in Column Engelt (in Yellow), a example of your brutto salary per year and resultant pension contribution have been calculated  (over 15 years)
http://i.imgur.com/HT18M9S.png
from the formula described in the pdf above  :
http://i.imgur.com/pb9f20v.png
- you can see that I assumed some variables like Zugangsfaktor (ie Early retirement or not),  Rentenartfaktor  (Normal pensioner, widow, orphan etc.)
- Based on the formula, It shows that you have consistently earned/declared 45,64% less than the average German over those 15 years (to only receive 200€). If your declared income was much different - then that is what Beppi meant by something is not rigtht (hase im pfeffer)
- If you have payed 15 years on par (to average/snitt) that would've earned you  438,15€ per month
- On Par (ie average income) over the full working period would earn you 1314,45€ per month
- Consistently earning  50% more than average earn you only 1971,68€ per month- so there is a point (Riester) where it makes sense to invest your money elsewhere.



John Bull :

Only minor problem has been that the German office have not accepted 2 years of education, which was a Pre Diploma course for which there was no qualification. In Germany, there must be!

What you are referring to here is so called exception periods (excemptions from Contribution (Period/Beitragzeit ) for time-off from work
** ie time-off to study for a profession (with some form of formal proof like certificate) (so a minor 3 month course won't rock that boat)
** or bringing a baby into the world (only mothers) earns you 1 points for a max of 3 years (there some additional benefits (but not points) due until the youngest kids reached 10 =Berücksichtigungszeiten).
** Time to care & foster an elderly parent, disabled family member
** Times where you were got unemployment benefits payed out (ie not only jobless but also got supportive money from the state)
** Civil & Voluntary Service, Military duty

John Bull :

Thank you for your comments and I hope that together we have given a little info that may help someone.

Pleasure. It was also good for me to verify my own assumptions based on your questions.

minor corrections/explanations of post above  (based on comments/feedback made offline):

1) the brutto salary of an average citizen is stated correctly at 36267€ per year for 2016 (found in column "schnitt") (the 3 in the example is a typo)
2) the majority of people do not earn exactly that amount (some less, some more). The result is that it is relativized (by dividing, per year entgelt/schitt to arrive at =Punkte
3) The yellow column (called Entgelt) is different for every individual and should be populated with the brutto salary that you earned per year.
4) the maximum that can be deducted for pension is limited. That max brutto salary amount limit is is defined in column BBG (Beitragsbemessungsgrenze). If you earn more than that no additional contributions for pensions will be subtracted.
5) references to either him/his or her should be read as him/her as it applies to all genders equally.

Okay, just to make the issue more complicated. I had paid into Kunstlersozialkasse continuously since 2002 and there were intermittent payments before that date. There have been years when I worked in Israel, Australia and the USA, though I always paid to KSK. And my final tax assessment was always in Germany. I also always brought the money into Germany. I really am not contesting this, but perhaps this helps explain the overall picture?

John Bull :

Okay, just to make the issue more complicated. I had paid into Kunstlersozialkasse continuously since 2002 and there were intermittent payments before that date. There have been years when I worked in Israel, Australia and the USA, though I always paid to KSK. And my final tax assessment was always in Germany. I also always brought the money into Germany. I really am not contesting this, but perhaps this helps explain the overall picture?

Phew. That is another special exception. It seems you are on the better end of the KSK, then.

With the KSK you
1) pay your share into pension fund (like the rest of us and
2)  the other part is covered by institution where you performed.
3) in addition another 25%  (of what you declared) is taken away from other German Pensioners and so, matched by the State. In this last point, you get something more, than the rest of the pensioners never had.

So the lever is basically 2) and your declared income and the years contributed. In your case it
Is 15 years out of 46= 33%

If most artists performed to a large audience (through a large institution) that benefits culture en large and that institution is obliged to contribute the other 25% due.  The large institutions contributes 25% to the KSK anyway.  However, if most artists only did individual acts, then the income from large instutions will be throttled and hence its relative contribution compared to the number of artists will be neglible.

I think the benefit for artists, en masse,  is to support the institutions with large audiences and those institutions increased revenue benefits the KSK tremendously.

There are 177 000 registered artists with the KSK.
The "average Joe" pensioners gives  171m€ from their savings to the artists' KSK.

1) That is ca 966€  per artist that contributed 46 years.
2) On top comes the 25% from the individual himself plus
3) 25% from the institutions


Now, if one artist only gets 236€ it means that  >>5 other artists have had close to 0€ contributions  to the KSK over their lifetime. Since that is quite unlikely, it only means that there are major KSK pension contribution evasion practices going on, hurting fellow artists in their profession. Do you think that is likely?

One might ask why the Künstlersozialkasse or KSK is even a relevant subject here.  It is because it concerns artists and freelance writers and journalist’s coverage for healthcare, disability and retirement. ***

I works like this. Normal employees get health insurance and part of their social security contributions covered by their employer – like in most countries. Self-employed artists, performers and writers need to join the KSK. They then pay around 18% of their earnings to the KSK which covers their social security which includes disability insurance, a minimal retirement and healthcare insurance.

The KSK approximately matches one’s contributions thus the artist pays 50% and not 25% of the total funding. Another 30% is taken from big players in the entertainment and media industries and a 5,2 % surcharge on performers fees from event organizers. 20% is basically from taxes. This is NOT taken out of the pockets of others’ pensions. One can better say that the government is supporting culture and the artists that supply it, for the cost of a handful of tanks or less than half the cost of another fighter jet. It’s a drop in the bucket of the overall budget and helps that artists don’t literally starve. Another point is that artists in the KSK are ALSO tax payers

And these are not direct handouts. One sees no direct payment, it is only a matching contribution going to the health care system and funds to insure retirement or disability payments. If an artist doesn’t work, the there is no matching contribution to be made. So it is reliant on and encourages artists to work. Yet some right-winger like to attack the KSK concept – just handouts for slackers, money out of the pocket of other hard working people … sorry but that’s BS! I for one  would not be unhappy to see an additional fighter jet or bomber less and MORE money given to support culture!

Other supporters of what is continual anti-KSK propaganda are the industries that have to pay into it. But employers have to make similar contributions for their employees so why not demand it of one hiring freelancers? Yet many companies cheat. From personal experience I know some of the icons of German industry for example trick their way around paying the 5.2 % surcharge on performers’ fees. They will write a contract and demand that one uses the terms “contracting for a service as a supplier” and not that it is a performance. Thus they skirt the KSK and also are able to delay the performers’ payment since suppliers are often paid months later on an ongoing basis. And these companies finance trolls who attack the whole concept of the KSK in the media when and wherever they can.

For factual information about the KSK here is their website (German only): http://www.kuenstlersozialkasse.de/

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