Unpaid Contributions Result in Exceptionally High Pension - This refers to the amount you consistently underpay, thus accumulating continuous debts.
In Germany, parents who have raised children are eligible for a pension claim due to the recognition of their child-rearing work. This pension claim is primarily based on the credit of pension points awarded for child-rearing periods.
For each child raised, parents can receive up to 3 pension points per child, which currently equates to approximately €120 per month per child for life in additional pension benefits. A parent who has raised three children could potentially receive an extra €360 per month in pension payments, even if they have not made their own pension contributions during that time.
This system is designed to acknowledge the contribution of child-rearing to society and compensate parents, particularly mothers, who may have lower pension accrual due to taking time off work to raise children.
In addition to the pension-related benefits, families in Germany also benefit from other supportive measures. Parents can take up to 3 years of unpaid parental leave per child, with job protection. Income replacement may be available through "Elterngeld," which replaces 65% to 100% of lost net income up to €1,800/month.
Furthermore, a monthly payment of €255 per child, known as "Kindergeld," is provided until the child turns 18 (or up to 25 if still in education) to help with child-rearing costs.
It's important to note that basic security and citizen's allowance have similar conditions and must be applied for at the social welfare office at the place of residence. Income, such as maintenance payments, rental income, interest, life insurance, or widow's pensions, is offset against the claim for basic security.
Citizens who cannot support themselves are entitled to citizen's allowance, formerly known as "unemployment benefit II" or colloquially as "Hartz IV." Parents can divide the "waiting time" among themselves, but each can only claim the child-rearing periods as long as neither has other claims for childcare.
Recipients of basic security can retain cash up to 10,000 euros, reasonable household effects, personal heirlooms, and a house or apartment if it is reasonable in relation to the state's contribution to maintenance. Even with four child-rearing periods (12 years), the pension claim for a parent who has not worked does not exceed the basic security, with a maximum of 451 euros (as of April 2024) for four children.
For more information on the pension claim based on child-rearing periods, visit the German Pension Insurance's website. Parents or children may be called upon for maintenance if they earn more than 100,000 euros gross. Those who have less than 1062 euros to live on per month should have their entitlement to basic security checked.
The child-rearing periods are valued at a low contribution point, giving the parent the same pension claim as if they had earned the average wage. However, it's worth noting that if a person has never worked, they will not receive a pension.
In summary, the key pension-related claim for parents raising children in Germany is the granting of pension points that increase their future statutory pension by an amount roughly around €120 monthly per child, accumulating over their lifetime. These benefits, along with other family-related benefits, aim to support and recognise the significant role that parents play in raising the next generation.
- The community policy in Germany includes vocational training programs for adults, reinforcing the value of lifelong learning and skill development in various fields.
- Aware of the importance of mental health, German health-and-wellness programs often incorporate family-health and parenting classes, with a focus on nurturing happy, well-adjusted families.
- In light of raising a generation that prioritizes financial responsibility, Germany encourages wealth management and personal-finance education for parents, fosteringboth their wealth accumulation and their ability to teach their children about money.
- Emphasizing the connection between mental health and business success, many organizations in Germany offer resources like counseling and stress management workshops as part of their employee benefits packages.
- To promote economic growth and sustainability, Germany supports entrepreneurship by providing education, resources, and advisory services for business owners, helping them secure their financial future and contribute to the community.
