Navigating Your Widow's Pension With Your Own Pension: A Comprehensive Guide
- Written by Nadine Oberhuber
- Approx. Read Time: 3 Mins
Calculating Survivor's Pension with Personal Pension Amounts: An Explanation - Calculating a Widow's Pension: Understanding the Impact on One's Own Retirement Benefits
Losing a spouse can be a challenging time, and understanding the financial implications can be overwhelming. Widow and orphan pensions serve as a safety net to help cover the surviving dependents' expenses. However, these benefits are primarily designed for those who don't have a high income themselves. So when you have your own retirement income, things can get a bit complex. Let's dive into the specifics.
The Intricacies of Widow's Pension Amounts
Widow's pensions in Germany come with a tax-free allowance, currently set at €1,038.05 in 2025. This amount is calculated by multiplying the current pension value per pension point (€39.32) by the factor 26.4. If you have younger children who are eligible for orphan's pension, the tax-free allowance may be increased by child supplements, potentially reaching around €1,500 for two children.
The next step is to determine your net income or net pension that exceeds the tax-free allowance. For instance, if your monthly pension is €1,500, after subtracting the €1,038 tax-free allowance, a remaining €462 is subject to deductions. In this scenario, 15% (€69.30) would be deducted from your widow's pension.
For those still working but not yet receiving a pension, the income that exceeds the tax-free allowance will be used as a basis. A flat rate of 40% is then deducted, resulting in a possible deduction of €584 from your widow's pension in the example provided.
What Constitutes Net Income?
Determining net income involves considering various types of income, such as pensions, employment income, rental income, capital income, and income for the self-employed. First, gross amounts are determined. For employees, a flat rate of 40% is then deducted to approximate their tax and social security contributions. For pensions, a flat rate of 15% is deducted, and for rental income, 25% is deducted. The remaining values are added up to give the net income, which is then used to calculate the remainder of the widow's pension.
Other Considerations and Taxation
Regardless of whether you receive only a pension or a combination of a pension and widow's pension, taxation is treated the same way for both incomes. The basic allowance for pensioners (€12,084 in 2025) is deducted from your combined income, meaning taxation on the pension income begins only when the taxable portion exceeds this amount.
As per the Federal Ministry of Finance, new pensioners can currently receive a gross pension of around €16,240 per year without paying taxes if 83% of the pension is taxable. Expected annual costs for old-age provisions and extraordinary expenses can be deducted during the tax return, reducing the taxable income. However, as the taxable portion of the pension increases annually, reaching 100% by 2040, it's crucial to stay informed about the evolving tax rates.
Remember that the specifics of your situation may vary, and it's always recommended to seek professional advice to ensure you're fully aware of your eligibility and the impact of external factors on your benefits.
- Pension
- Spouse
- Retirement
- In the case of a widow who also has a personal-finance source through vocational training or employment, the community policy regarding the combination of widow's pension and her own pension might become complex.
- If the widow is receiving a pension or a combination of a pension and widow's pension, the finance department treats both incomes equally for taxation purposes, subtracting the basic allowance for pensioners from the combined income before imposing taxes.
