Some internationals living in Germany may have a complex patchwork of pension contributions they’ve made over their lives. Perhaps you worked in your home country for ten years after finishing university and then moved to Germany. Maybe you worked for another 20 years in Germany, making pension contributions here – before deciding to move to Spain to retire. So how much of your pension counts, when can you retire, and who pays it out?
There’s no easy answer, but depending on the countries you’ve worked in, you may be able to combine your contributions.
Which countries combine with Germany and how does it work?
To be eligible for a German pension, you need to have made at least five years of contributions. What’s key here for internationals though, is that the contributions you’ve made in other countries may end up counting, depending on your situation.
The most obvious example is if you worked in another EU country as well as in Germany. If someone worked in Ireland for three years and made pension contributions there before moving to Germany, and then worked in Germany for another 40 years – EU law mandates that they be treated as having made 43 years of contributions. This is true even though someone typically has to work for ten years in Ireland to receive an Irish pension, for example. If a person in this example applied to retire after working 40 years in Germany and three in Ireland, the German authorities must treat them as having made 43 years of pension contributions.
Typically speaking, in order for a contribution period in another EU country to count, EU rules say you should have paid into the system there for at least a year. So someone who worked in another EU country for six months before moving to Germany will likely not be able to count those six months into their total.
READ ALSO: How long do you have to work to receive a German pension?
What about pension contributions made in non-EU countries?
EU social rights protections are the most straightforward, with your contributions made in different EU countries generally combining to your overall total when you reach retirement age. Norway, Iceland, Liechtenstein and Switzerland also fall under these rules.
But Germany also has treaties with certain non-EU countries that sometimes work in a similar way. The thing to do is to check and see if the non-EU country you made contributions in has such a treaty with Germany.
The German-American Convention on Social Security for example, allows the time you’ve made contributions to US social seurity to be added to your German total. So if you’ve worked in the US for three years before moving to Germany, you’ll hit the minimum German contribution time of five years after your first two years of work and pension contributions in Germany.
Germany has similar social security agreements with 21 non-EU countries. These include Canada, Australia, Brazil, India, Israel, Japan and more. You can check the full list here.
Germany and the UK have not, so far, signed a social security agreement covering current pension contributions. Contributions made in the UK before February 1st, 2020 fall under the Brexit deal and are treated much the same way as contributions made in another EU country are.
READ ALSO: When are people in Germany retiring?
When can I retire and who pays out my pension?
To collect your pension when you retire, you file your pension application with the last country you worked in – even if you don’t live there. For example, if you spent 35 years working in Germany and then the last five years of your working life in Spain, you would file your pension application with Spain. If you finished your working life in Germany and then moved to Spain to retire, but never worked there, you would file your pension claim with Germany.
The country you apply to then contacts the other countries where you’ve made contributions and lets you know what each one’s decision is, provided a pension treaty applies. Each country then ends up paying you the pension entitlement you have with them separately.
Crucially, they’ll also pay you according to when you’re eligible in each country. For example, when someone whose made pension contributions in both Spain and Germany turns 65, they can claim the Spanish part of their pension – but not yet the German part. That’s because Spain’s retirement age is 65 but Germany’s is 67. Someone in this situation would collect only the Spanish part of their pension for two years until they turned 67. At that point, they’d start also receiving their German pension on top of their Spanish one.
READ ALSO: How does Germany’s retirement age compare to the rest of Europe?
Comments