Riester allowances and occupational pension: innovations from 1 January 2018

Sunday, 31.12.17 , written by Julia Meier Whether adjustments to the disability pension, new regulations on occupational pensions or allowances for the Riester pension – The New Year brings some significant changes to consumers. For example, as of January 2018, some of them will have slightly more money in their wallets as they spend less on their statutory health insurance. >

Krankenkasse, Riester-Zulagen und Co - 2018 bringt viele Neuerungen From January 2018, consumers will face many legal adjustments

  • The company pension plan will receive more support from 2018 and will be more attractive, especially for low-paid workers.

  • Holders of a Rürup pension can deduct a new maximum amount for tax purposes.

  • The average additional contribution for statutory health insurance drops by 0.1 percent.

From January 2018, consumers will be faced with many different innovations and legal adjustments. These include, among other things, the change in tax-deductible contributions to the Rürup pension or the adjustment to the disability pension . But even with the statutory and private health insurance, there will be interesting novelties next year.

Better occupational pensions from January 2018: allowances for low-paid workers

At present, about 60 percent of all German employees have company pension plans. With the changes that will take effect from January 2018, the company pension for employees and employers will become even more attractive. In order to achieve this, the state promotes future bosses who participate in the company pension of low-income earners with an income of up to 2,200 euros gross a month. If employers give up to € 480 a year, they receive a subsidy from the state in the form of a tax concession.

In addition, the so-called “double contribution” for occupational pensions linked to a Riester pension is eliminated. Pensioners no longer have to pay the full contribution rate for the statutory health and long-term care insurance from the company pension.

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Innovations for holders of a Riester or basic pension from January 2018

With the Riester pension beckons starting from January an increase of the state promotion . The basic supplement increases from 154 euros to 175 euros per year. To receive the entire subsidy, savers must continue to contribute at least four percent of the previous year’s income in the Riester contract minus the allowances.

Holders of a Rürup pension can deduct a large part of their contributions as special expenses at the beginning of the year. The tax office takes into account a maximum of 86 percent of the contributions paid up to a maximum of 20,392 euros.

New allowance for basic security in old age

The changes in the occupational pension also make the Riester pension more attractive to low-paid workers . The amount of the basic allowance is divided into two steps. Anything below an amount of 100 euros is not taken into account when calculating the basic pension in old age. If income exceeds this limit, then 30 percent of the amount above the threshold remains free of charge.

An example: For monthly income from the Riester pension of 150 euros, 115 euros (100 euros plus 30 percent of 50 euros) would not count towards the basic security. However, those affected should make sure that the total allowance in 2018 does not exceed the limit of € 208 .

New calculation for the disability pension

If it comes to a serious illness or an accident, it is possible that employees can not work as usual. The disability pension provides financial support to those who leave the labor market early. From January 1, 2018, the length of the compensation for the reduction in earning capacity for new retirees will increase from the age of 62 to 65 . The approximation does not happen at once, but will be gradually implemented by 2025. For people who apply for a disability pension in 2018, this means that they have a fictitious working life up to the age of 62 and three months .

In 2016, the average monthly disability pension was 697 euros. This amount can not cover the resulting income gap in most cases. For this reason, employees should provide on time, for example, with a disability insurance.

Annual payment limit for the transfer to private health insurance increases in 2018

With the new year, the average additional contribution for statutory health insurance will be adjusted. This was 1.1 percent in the last two years. As of January 2018, it will now be lowered by 0.1 percentage points . However, the health insurance funds may define their contribution individually. Many funds have therefore decided to keep their contribution stable. Only a few will be cheaper for insured. Nevertheless, this offers a good opportunity for insured persons to catch up with various offers at the turn of the year and to compare it with that of their own health insurance.

Also for the private health insurance new guidelines apply. As of 1 January 2018, the annual compulsory insurance liability for statutory health insurance will rise to 59,400 euros. That’s 1,800 euros more than before . A change in private health insurance is thus made more difficult for employees. Because they must now earn more than 4,950 euros gross a month to be privately insured.

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