Those who receive state benefits have to pay attention to limits on additional income. We provide an overview of these limits for unemployment benefits, pensions, short-time allowances, etc.
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Whether unemployment benefit, pension or short-time allowance: If you receive a benefit from the state, you can jobben and so earn something extra. Income is exempt from imputation within certain limits.
Unemployment benefits: Taking secondary income into account
If you have a part-time job of less than 15 hours a week, you are considered unemployed and are entitled to unemployment benefits if you lose your main job. The salary for the mini-job counts as secondary income, as long as it net exceeds the tax-free amount of €165.
If you are gainfully employed while receiving unemployment benefits, the resulting income is to be taken into account after deduction of taxes, social security contributions, income-related expenses and the tax-free allowance. The employment agency reduces the unemployment benefit accordingly in the respective month.
A higher allowance is possible if the unemployed person has held the side job for a longer period (one year within the last 18 months) in addition to the main job.
Then the income will remain exempt up to the amount earned on average per month in the last twelve months in the part-time job.
Basic income support benefits: Income to be taken into account
Income and assets of the unemployed person are to be taken into account for basic security benefits for those capable of working (unemployment benefit II). Only those who cannot cover their living expenses from their own resources receive benefits. Anyone who works must inform the job center of what he or she earns. The job center then determines deductions and allowances (z.B. taxes and travel expenses) and thus calculates your imputed income. The first 100 € (gross) from earned income are not to be taken into account. Anything in excess of this limit is counted on a pro rata basis. Earn gross between 100 € and 1.000 €, 20% of the part of the gross income exceeding 100 € is exempt from deduction.
Example: From 450, – € from a mini-job, 170, – € are free of charge (100 € basic deduction + 20% of 350).
All additional earnings are taken into account for the basic income support in old age and in the event of reduced earning capacity, but not to the full amount. Here there is a 30 % rule. If, for example, you earn €450 from a mini-job, you need to take into account €315.
Full disability pensions and early retirement pensions: 6.300 € allowance
If you have reached your standard retirement age, there are no restrictions on additional earnings in addition to your old-age pension. Supplementary income limits only apply to pensions before reaching the standard retirement age:
- Pension due to full reduction in earning capacity
- Old-age pension for those insured for many years
- Old-age pension for particularly long-term insured persons
- Old-age pension for severely disabled persons
- Old-age pension due to unemployment or after partial retirement
For early retirement pensions and pensions due to full reduction in earning capacity, the following applies: Until you reach the standard retirement age, you may earn up to 6.300 € earned in addition in the calendar year. The German pension insurance will then pay out your pension without reduction.
If the earnings exceed the exempt amount of 6.300 €, the amount in excess of this is divided by 12 and 40 percent is offset against the monthly pension.
Temporary change due to the Corona pandemic:
For the year 2020, the earnings limit for early retirement pensions of 6.300 € to 44.590 € has been raised. Pensioners can earn up to this amount per calendar year in addition to their pension without it being reduced.
Pensions due to partial reduction in earning capacity: personal supplementary earnings limits
In the case of partial reduction in earning capacity pensions, the annual supplementary earnings limit must be calculated individually. The highest income from the last 15 years before the reduction in earning capacity is decisive. The limit is currently at least 15.479,10 €. If your earnings exceed this limit, the pension insurance deducts up to 40% from your reduced earning capacity pension.
Tip: Pension notices provide information on personal supplementary income limits.
Short-time allowance: Temporarily relaxed rules on additional earnings
The employment agency pays short-time allowance to partially compensate for lost wages when work is temporarily unavailable. What applies here in the case of a part-time job?
If you already had a part-time job before the start of short-time work, no credit is given. If employees take up a sideline job while receiving short-time allowance, the additional earnings are offset against the short-time allowance.
From April to October 2020, a special regulation applies due to the Corona pandemic. Anyone who takes up employment in a system-relevant sector during short-time working does not have to have the remuneration earned in the process offset against the short-time working allowance.
However, there is one limit: the total income from the income still paid from work and the short-time allowance as well as the additional income may not be higher than the normal net income without short-time work.
Parental allowance: No allowances
During parental leave, it is possible to work part-time (up to 30 hours per week). Earnings must be counted in full towards parental allowance, even in the case of a mini-job.
Without deductions from the parental allowance, mothers and fathers can therefore earn nothing extra.
Child benefit: Entitlement of adult children in education may be dropped
During an apprenticeship (school, university, apprenticeship), children of full age can be employed up to the age of 25. Child benefit for children under the age of 18. If it is the first training, neither income nor the extent of a part-time job plays a role.
For trainees in the second or further education it is considered harmful if they have a gainful employment of more than 20 hours per week. Marginal and short-term employment (up to 2 months) are harmless.
In the months in which the limit is exceeded, the entitlement to child benefit is cancelled.
BAfoG: 450, – € gross from earned income free of charge
During or before their education, many pupils and students earn money. For BAfoG, only the income in the grant period is considered. Who under 450 € in the monthly average (5.400 € per year) earns, gets an unreduced BAfoG. Note: This limit applies to dependent employment and is lower for self-employment, since the lump sum for income-related expenses cannot be claimed.
If in doubt, ask for advice
We only give an overview here. If you have a concrete problem in connection with supplementary income limits, professional advice from the trade union legal protection is recommended.