Any person whose in the long term earning capacity is significantly impaired for health reasons is eligible to receive a reduced earning capacity pension. The rules on the calculation of reduced earning capacity pensions have been improved for new pension recipients on several occasions in the past. However, the people already receiving a reduced earning capacity pension did not initially benefit from these improvements.
This changed in July 2024 when the Act to Improve the Status of Reduced Earning Capacity Pensions came into force. Since then, the German Pension Insurance has paid a supplement in addition to the around three million pensions that were either not or only partly affected by the improvements. Not only reduced earning capacity pension recipients, but also recipients of child-raising pensions or survivors pensions that were not preceded by the insured person’s pension are entitled to receive the supplement. The affected pensions have since been topped up by a flat-rate supplement, provided that they began in the period from January 2001 to December 2018. Old-age pensions or survivors pensions that were preceded by an aforementioned pension of the insured person are also being topped up.
The pensions mentioned were increased to bring them into line with the pension improvements implemented after 31 December 2018. In the latter’s case, the additional non-contributory supplementary period, i.e. the extrapolation of the earnings history, no longer ends at the age of 62 at the latest, but significantly later.
“It’s great that the reduced earning capacity pension supplement will improve around three million pensions.”
Alternating Chair of the Federal Board of Deutsche Rentenversicherung Bund
Supplement amount
There are two different amounts of supplement due to the fact that the non-contributory supplementary period ended at different times depending on the start of the payout phase with pensions that began between January 2001 and December 2018. If the start of retirement commenced in the period from January 2001 to June 2014, the supplement is 7.5 per cent. If the original pension start date is between July 2014 and December 2018, the pension is topped up by 4.5 per cent.
Two-stage payout procedure
The calculation and payment of the supplement is a two-stage process due to the technical complexity of the implementation. The supplement for the period July 2024 to 30 November 2025 is calculated on the basis of the pension amount and, during this time, it is paid out separately from the pension. From December 2025 onwards the supplement will be recalculated using the personal earnings points on which the pension is based on 30 November 2025. The supplement is then paid out in conjunction with the pension in one single amount.
