German Pension Refund for Re-pats

July 27, 2023 | , , | 5 minute read
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Text: Expat Tax Tip: How to get your German Pension back as a Refund

Getting Back your German Pension Contributions when you leave Germany via a Pension Refund

For any expat who has lived and worked in Germany but has either left or is planning to leave, you could be eligible to get a refund on your German pension contributions. Many expats move to Germany for set-term contracts, romantic reasons, or to experience a new culture. If you are considered a resident in Germany and were receiving income, chances are good you paid (or pay) 9.3% of your salary towards German Pension Insurance. But there is good news. You could get that money back by requesting a German pension refund!

In Germany, statutory pension insurance is an important part of the social security system and has been integrated into German law for over 130 years! When you begin working in Germany, you are automatically enrolled and covered from your first day of employment.

Check Your Eligibility

MyExpatTaxes can’t help you claim back your German Pension contributions, but the good news is we know someone who can. Pension Refund Germany is a service designed specifically for expats looking to claim back what they paid in German pension insurance after they’ve returned home or moved on.

If you’re unsure if you are eligible to claim back your German pension, we recommend using their pension refund eligibility check tool to find out if you can get a refund. The check is free and only takes a minute. 

Get a Free Pension Refund Calculation

According to Pension Refund Germany, the average expat receives a refund of about 9,300 euros. You can also do the calculation yourself. It’s just:

Your gross salary x 9.3%. This is what you can expect as a refund!

If you want to know how much there really is in your German Pension account, Pension Refund Germany can request your insurance record and will also do the refund calculation for you. Once they have the report, you should check if all periods are included in your record and which exact amount you can expect. 

What is Pension Insurance?

Germans do love their insurance, don’t they? For Americans, Pension Insurance (sometimes referred to as German Old Age Security) and other Social Insurance might not be what we’re used to when discussing insurance.

Germany has a comprehensive social security system. It is mandated by law. This is why it is called “statutory social insurance.” In Germany, social insurance provides comprehensive protection. It could be on your way to work, in the event of illness, or if you lose your job. It also offers financial security in old age. This is where pension insurance comes in.

German Statutory Social Insurance includes:

  • pension insurance
  • unemployment insurance
  • health insurance
  • accident insurance
  • long-term care insurance

The 9.3% of your social insurance payments that cover German pension insurance include prevention benefits, rehabilitation benefits, retirement pension, pension in the case of reduced earning capacity disability, and expenses for surviving dependents.

What happens to my contributions if I don’t request a Pension Refund?

As someone who has left Germany as an American expat, claiming your refund on German pension contributions is not mandatory. You could leave your contributions where they are and, if eligible, claim a pension once you reach the German retirement age of 67. You qualify for a German pension if you have paid at least 60 months (5 years) to the German pension fund or a combination of any other national pension fund of EU countries. 

Remember: in order to claim your German pension once you retire, you will need to make sure the German government has your current information. That way, they can make payments. It can be quite a hassle to keep track of several foreign Pensions. Instead, many expats choose to take the refund now and invest it in local retirement accounts.

Will I have to Pay US Taxes on my German Pension Refund?

No. As your pension contributions were actually already taxed. How so? When you report your worldwide income to the US, you report the Gross amount (Brutto in German). This amount is your earnings before the mandatory pension insurance contribution deductions. Therefore, since the amounts were already taxed and you don’t generally get a tax deduction for them on your US return, a refund won’t prompt any amendment or additional filing requirements.  

Save Time & Apply Online 

Learn more about how you can apply online: Pension Refund Germany guides you through their 100% digital process. It’s simple, and no paper is needed!

Planning Your Move to Germany?

If you stumbled across this page while researching your future move to Germany – you’re in luck! We’ve got a full guide about what you need to know about filing your US taxes abroad in Germany!

MyExpatTaxes is the leading software for US American Expats to file their US taxes while living abroad! Staffed by a team of IRS Enrolled Agents, expert Developers, and experienced customer service reps! Plan your move abroad, and don’t forget to file your US taxes!

This is post is in partnership with Pension Refund Germany. A non-monetized collaboration.

Written by Ellen M

July 27, 2023 | , , | 5 minute read

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