German Pension Plans and UK National Insurance Contributions

68 posts in this topic

Hi all,

we are just trying to sort out our Rentenversicherung periods on non-contribution.  The amt sent us a lot of complicated forms, of which I believe most are irrelevant.

 

Appreciate if someone could help confirm the following.

- 3 year spent bringing up children from birth. Counts monetarily and towards the 35 years should you want to retire early?

- Time spent before coming to Germany working in the UK paying NIC and at school/university. Counts towards the 35 years?

- Now what about time spent full or part time Selbständig in Germany where no pension contributions are paid. Does this count towards the 35 years?  I could bring up if relevant but some of the 10 year old + work we no longer have any real evidence in which case would probably not be worth chasing after.

 

Anything big I may have missed?

 

Merry Christmas

 

 

 

 

 

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Interesting discussion but confusion still seems to be in the air.  We have just been through the process of claiming (through DWP) early payment of the German State Pension at 63, while still having to wait 3 more years to claim the UK version.  We have also paid some UK voluntary Cl.3 NIC.  So, here's our experience. (This is only my second post on this forum and it is even longer than the first!)

 

Leaving Brexit to one side, the EU position as hinted at in various posts in this thread, is that each country pays you a pension by applying its rules to create an "inland" calculation based only on your inland contributions record and a "zwischenstaatliche" calculation based on your total contribution record. It then pays a pension equal to the higher of those calculations. You apply in your country of residence etc as already stated in this thread.  So, what does all this mean?

 

We lived in Germany for 8 years.  For the German pension system we successfully applied, several years ago, to have various educational years in the UK recognised. This entailed sending details of schools, universities etc to the DRV Bund.  These years then applied in both calculations mentioned above, so it is worth doing. The forecasts provided for my wife indicated that the "zwischenstaatliche" calculation was higher than the inland one to the tune of about 20%.  All good.  For me it ended up making no monetary difference in that forecast, though that may change once my final position is ascertained when I actually claim. This year my wife topped up 2 UK years NIC to 5 April 2019 before applying via DWP for the German pension.  The DWP part was very slow but it was super-quick (3 weeks) once the Germans had the information from here. We allowed 5 months to get things sorted - 6 would have been less stressie!  But either way, Germany back-date payment is delays ensue.

 

The outcome is interesting.  Absent a "zwischenstaatliche" calculation my wife had more than 5 but less than 35 qualifying years in Germany, so would not qualify for a pension at 63 and would have had to wait 3 more years.  But under the "zwischenstaatlichen" rules the UK years are taken into account and the 35 years are met.  Overlapping periods are ignored, so if you had received accreditation for those educational years both in Germany and in the UK, you would only count them once for the German calculation.  This seems perfectly sensible.  What I do not understand fully is how the 20% uplift is achieved but think that is to do with her education/work/unemployment pattern whilst in Germany and the UK compared to my continuous employment following graduation.  But then, who cares?

 

So, the German pension is now based on 10 points for Beitragszeiten over those 8 years in Germany plus the 2 points (20%) uplift, reduced by 0.3% per month for taking at 63. Payment is up and running - simples!  We have since spoken to DRV Bund to ask what we need to do if she pays more voluntary NIC here to max out the UK state pension.  The answer was that it may make a few cents difference to the German pension and they will be happy to recalculate as and when.

 

The UK position is different and we have been told that the only difference the Germany years can make is to help get to the minimum 10 years you need to qualify at all for a UK state pension.  As we both have more than 10 years anyway the German years are effectively ignored for UK purposes. As mentioned someone elsewhere, 5 years UK plus 5 years Germany would mean you get a UK pension of, in simple terms, 5/35 x £168.60 (the 2019 max weekly amount) = £24 per week. 

 

The position here is further complicated by the fact that the new state pension was introduced from 6 April 2016 and complex rules applied to move people from the old to the new.  This entailed calculating your "starting value" at 5 April 2016 for the new state pension.  This was the higher of 2 amounts:

  1. The amount you would have received under the old rules had you retired on that date.  That was based on up to 30 full years on your National Insurance record.  If you had 30 years you would have got the max; if you had 40 years you still only get the max.  Less than 30 years and you get less than the max.  At that time the max basic state pension was £119.30 per week.  There was also an additional or second state pension and that too would feature in this calculation but if you were also in an employment-related pension scheme, as most employed people are, then that almost certainly falls away because you would probably have been "contracted out" of the second state pension, thus paying lower NIC.  Either way a number is calculated here for comparison with stage 2. 
  2. The amount you would have received under the new rules had you retired on that date. If you had 35 or more full years on your NI record then this too would be the max (£155 or so at the time; now £168.60 per week).  But, and here's the rub, if you were contracted out, thus paying 2% less NIC, an adjustment is required to this figure to make sure that contracted out and non-contracted out people were treated fairly.  A figure called "COPE" (Contracted Out Pension Equivalent) is calculated and deducted from the £155 etc.  This is explained in your state pension forecast.  For me (as a public servant in continuous employment) my COPE is £85 or so; for my wife with periods of unemployment, child-minding, and UK employment the figure is much lower.  I have not tracked down quite how this is calculated.

Anyway, the higher of the above 2 numbers is your starting value.  If that is less than the then new state pension max £155 per week you will want to consider adding years.  If you are still working then you pay NIC anyway but if you are not, and do not qualify for credits, you will want to consider making voluntary contributions.  Each year you add to your NI record gives you £168.60/35 = £4.82 per week additional pension up to the max (in 2019 terms).  I will need to pay NIC (mandatory or voluntary) for all years (2016/17 onwards) until I retire and will still not quite reach the max as my starting value is the amount under 1. above; my wife only had to add 3 years to reach the max even though she was 5 years from retirement age at that time.  If you make Class 3 voluntary contributions you need to live for about 3 1/4 years to recoup the investment.  Waiting as long as possible before making that decision seems sensible (see later re time limits).

 

So, quite complicated and not that well explained on any websites I have read.  However, you can glean all of this from your Pension Forecast, so it is worth getting one.  Also get a printout of your NI record as this will show which years are full, which are not and whether you can still "fill" those years.  In theory you can get this online at gov.UK but as others have mentioned that might not be that easy for non-UK-residents...

 

I am not up-to-speed with the voluntary NIC position for expats but in general you can make voluntary contributions up to 6 years after the year in question.  If you pay within 2 years you pay at the rate for the year concerned; if you pay after that time then you pay at the rate for the year in which payment is made.  There are also longer time limits for certain age groups.  These are on Gov,UK if you search for voluntary contributions.

 

Before asking HMRC to give you a bill for years X or Y, you need to talk with the Pensions Futures Team in DWP (+44 191 2183600) (HMRC will ask you to confirm you have done this) as they will confirm whether it is beneficial to do so.  I don't know but imagine that there are complex interactions between the old and new pension systems and your starting value if you are considering topping up years ending 5 April 2016 or earlier. But before doing anything, I would suggest you get your pension forecast and NI record to see what that tells you. This way you will be able to have a more informed discussion with both DWP and HMRC.  And don't forget you have up to 6 years to decide what to do for any particular year..

 

Hope this helps

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This might not be adding anything new and doesn't answer the specific question about paying UK NIC while also making contributions to the German system but this booklet provides quite a lot of information about NIC for people living or moving abroad.  

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GaryC, thank you for sharing your experience in your excellent post, and the link to the booklet, this has cleared a lot up for me. 

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Hi all,

 

I have read through this thread, and it's the closest information to what I'm trying to work out, but could use a little clarification. @GaryC @PandaMunich I'm hoping you're still active on here, as you seem to know your stuff.

I'm a UK citizen who's been living in Germany 9 years (no German passport, unfortunately). Therefore, the last nine years I've paid German Rentenversicherung and no UK national insurance. I have the opportunity to back pay the last 9 years of UK NI until next April, which would then give me in total 19 years of NI (10 already from UK + 9 back pay).

My question is, if I build up 35 years NI in the UK (through voluntary payments each year), as well as having 35 years German Rentenversicherung (built up over the next couple of decades in Germany), would I get 2 pensions or 1? Would I get my £180 per week from the UK, plus whatever Germany pays out, so I get double pension per week? Or would I be wasting my money paying the NI, as it would all be calculated by Germany anyway? Basically, is it worth me paying the voluntary NI to get double pension, or am I wasting my money?

 

I really hope someone on here knows, as trying to find someone who is familiar with both systems is proving really tricky

 

Thanks in advance
 

Terry

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You would get two pensions.

 

Please don't forget to reduce your taxable income in your German tax return by the UK NI contributions in line 6 of Anlage Vorsorgeaufwand: https://www.steuerklassen.com/content/anlage_vorsorgeaufwand_2021.pdf

 

If you pay from a GBP account, use these exchange rates to convert the GBP amounts into €: https://www.bundesfinanzministerium.de/Web/DE/Themen/Steuern/Steuerarten/Umsatzsteuer/Umsatzsteuer_Umrechnungskurse/umsatzsteuer_umrechnungskurse.html

 

You will also need a certificate from HMRC attesting how much you paid in NI contributions that calendar year (not during the UK tax year!), the Finanzamt will ask for proof for what you filled in.

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4 hours ago, TerryJoness said:

My question is, if I build up 35 years NI in the UK (through voluntary payments each year)

 

This prompted me to look up mine as I figured I'd have 27 years in the UK, but it turns out I have 30 because the three years I was still at school/sixth form count as full years. However 3 years of university/part time work don't. 

 

When I looked at this before I read that 30 years got you the full "basic state pension", but now I've learned that's for older people and I need to look at the "new state pension". Obviously. However when I tried the pension predictor on HMRC it says I get the full £186.99 and there's nothing I can do to improve it. It would be a waste of money for me to pay an extra 5 years worth of voluntary contributions to reach the 35 years. I guess this is to do with the "higher of the two" mentioned above.

 

You might want to look into it before you pay the extra. Or am I wrong about something?

 

 

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10 minutes ago, Dembo said:

 

This prompted me to look up mine as I figured I'd have 27 years in the UK, but it turns out I have 30 because the three years I was still at school/sixth form count as full years. However 3 years of university/part time work don't. 

 

When I looked at this before I read that 30 years got you the full "basic state pension", but now I've learned that's for older people and I need to look at the "new state pension". Obviously. However when I tried the pension predictor on HMRC it says I get the full £186.99 and there's nothing I can do to improve it. It would be a waste of money for me to pay an extra 5 years worth of voluntary contributions to reach the 35 years. I guess this is to do with the "higher of the two" mentioned above.

 

You might want to look into it before you pay the extra. Or am I wrong about something?

 

I think that it could definitely be worth paying voluntary NI for the extra 5 years. Might depend on whether you qualify for the class 2 or class 3. I can’t recall exactly though one costs a lot less than the other based on certain criteria. 
 

I was advised to request an up to date pension statement (easy telephone call to the pension department) first and then phone to discuss the options. I only had 29 years and it was worth paying extra to take up to 35 years. All a very easy process. 
 

All the best.

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Contact DWP in Newcastle for a pension forecast. There are other threads on this on TT.

 

The goal posts keep moving. 30 years contributions no longer gets you a full pension unless you are already receiving a UK pension. It is currently 35 years. I recently paid up in full. Just waiting for the next goal post move.

 

How old are you ?

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Thanks. I'm 50, and the first year I can voluntarily pay is 20/21 (for which they want £673). So I don't need to particularly rush on either count, but probably is worth the call. 

 

The predictor does say it isn't a guarantee, but OTOH how can they be getting a simple algorithm like that wrong?

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I paid a decade of contributions in both UK and DE for the same years. Apparently it is worth avoiding doing that if possible. From the German perspective your overlapping  UK years are ignored. Better to pay in series than in parallel for the German calculation. If you are only 50 you have another 20 years to pay UK contributions. If you are paying DE contributions I would be tempted to hold off paying into the UK pot. 

 

Yes, by the time you reach the present pension age, it will have risen to at least 70.

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10 hours ago, PandaMunich said:

You will also need a certificate from HMRC attesting how much you paid in NI contributions that calendar year (not during the UK tax year!), the Finanzamt will ask for proof for what you filled in.

I paid mine as a lump sum, then called HMRC and asked for a letter stating what I paid and when.  They were most obliging.

 

6 hours ago, Dembo said:

 

This prompted me to look up mine as I figured I'd have 27 years in the UK, but it turns out I have 30 because the three years I was still at school/sixth form count as full years. However 3 years of university/part time work don't. 

 

When I looked at this before I read that 30 years got you the full "basic state pension", but now I've learned that's for older people and I need to look at the "new state pension". Obviously. However when I tried the pension predictor on HMRC it says I get the full £186.99 and there's nothing I can do to improve it. It would be a waste of money for me to pay an extra 5 years worth of voluntary contributions to reach the 35 years. I guess this is to do with the "higher of the two" mentioned above.

 

You might want to look into it before you pay the extra. Or am I wrong about something?

 

 

 

The important thing to ascertain is what your starting amount is at 6 April 2016 when you were transferred from the old state pension to the new.  That amount is the higher of what you would have got under the old rules at that time and what you would have got under the new rules had they always applied.  Under the old rules everyone qualified for a "basic state pension" and, depending on whether your work pension scheme (if you paid into one) was "contracted out" of the "second state pension" (State Earnings Related Pension until 1998 and the State Second Pension from then until the rules changed), you may get some "additional pension".  I think that could amount to £80 or more per week but the maths is mega complicated and not easy to track down either, so you have to rely on DWP!

 

So, if you had 30 years up to 5 April 2016 your starting amount would be (in 2022/23 terms as it all gets indexed forward each year) the greater of:

1. 30/30 x basic weekly max, so 30/30 x £141.85 = £141.85 plus any additional pension.

2. 30/35 x new state pension weekly max, so 30/35 x £185.15 = £158.70

 

Absent any "additional pension" for not being contracted out or not even paying into a works pension, your starting about would be £158.70.  If there is "additional pension", then you add that to the £141.85, so it could easily be more than £158.70.  Indeed, it could exceed the max weekly new state pension of £185.15 for 2022/23. If it does, the excess is call a "protected payment" and paid in addition to your new state pension.

 

Indeed, if your pension forecast says you will get £186.99, that would be £1.84 per week above the max, and would suggest that you may well have an amount of "additional pension" under the old rules.

 

I would contact DWP and ask them to explain the £186.99 and ask whether therefore making any further payments would be beneficial for your pension.

 

2 hours ago, Dembo said:

Thanks. I'm 50, and the first year I can voluntarily pay is 20/21 (for which they want £673). So I don't need to particularly rush on either count, but probably is worth the call. 

 

The predictor does say it isn't a guarantee, but OTOH how can they be getting a simple algorithm like that wrong?

 

There is a degree of urgency.  Currently anyone who was transferred from the old system to the new in 2016, can fill empty or partly filled years back to 2006/7 but ONLY until 5 April 2023, which is fast-approaching.  Normally you can only fill the previous 6 years.

 

In terms of cost, if you have to pay class 3 NIC, then you can pay any year up to 2 years in arrears and still pay the rate for the year in question. If you delay further then you pay at the rate for the year in which you make the payment.  If you can pay class 2 NIC (you should ask if that is possible as many/most ex-pats can) then you have only 1 year's grace.

 

The amount you quote for 2020/21 suggests to me that it is already partly filled as the annual rate was £795.60.  Something to check with HMRC before paying...

 

53 minutes ago, optimista said:

I paid a decade of contributions in both UK and DE for the same years. Apparently it is worth avoiding doing that if possible. From the German perspective your overlapping  UK years are ignored. Better to pay in series than in parallel for the German calculation. If you are only 50 you have another 20 years to pay UK contributions. If you are paying DE contributions I would be tempted to hold off paying into the UK pot. 

 

Yes, by the time you reach the present pension age, it will have risen to at least 70.

 

I am not sure I follow this post.  Overlapping periods are indeed ignored, i.e. if you have contributions in Germany and the UK for the same period then the UK contributions are ignored but I do not follow the point about series and parallel.  The Germans will do 2 calculations under the EU rules on the coordination of social security systems.

1. they calculate what you would receive based solely on your German contribution record (the innerstaatliche Berechnung)

2. they calculate what you would receive if all contribution periods had been made in Germany (this is where overlaps are ignored).  This is the "theoretical amount" and is then pro-rated based on the ration of your German years to the total number of years (the zwischenstaatlice Berechnung)

 

Your pension in Germany is the higher of those 2 calculations.  From personal experience, the second one can be significantly higher.  Also, if you have less than 35 or 45 years in Germany to claim the 35-year or 45-year version of their pension then the UK years used in 2. can get you to the magic 35 or 45 to qualify.

 

So, I do not understand why paying German contributions would mean one should hold off paying into the UK system - there is no detrimental link as far as I am aware.

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11 hours ago, PandaMunich said:

You would get two pensions.

 

Please don't forget to reduce your taxable income in your German tax return by the UK NI contributions in line 6 of Anlage Vorsorgeaufwand: https://www.steuerklassen.com/content/anlage_vorsorgeaufwand_2021.pdf

 

If you pay from a GBP account, use these exchange rates to convert the GBP amounts into €: https://www.bundesfinanzministerium.de/Web/DE/Themen/Steuern/Steuerarten/Umsatzsteuer/Umsatzsteuer_Umrechnungskurse/umsatzsteuer_umrechnungskurse.html

 

You will also need a certificate from HMRC attesting how much you paid in NI contributions that calendar year (not during the UK tax year!), the Finanzamt will ask for proof for what you filled in.

 

Someone resident in Germany asked me the other day whether Brexit had changed the position about claiming a deduction in Germany for NIC payments as people in some forum they were reading were most confused and couldn't seem to get an answer from the FA (perhaps the latter is normal as it is seen as giving tax advice?).  I said I didn't think Brexit had changed anything, not least because your posts on this post-date the end of transition but am not sure exactly where the eligibility criteria are set out.  Can you point me/us/them to the appropriate statutory provision?  

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45 minutes ago, GaryC said:

The important thing to ascertain is what your starting amount is at 6 April 2016

 

Wow thanks for all that. In April 2016 I would have had 26 years, so I don't know how they're working that out.

 

Quote

 If you can pay class 2 NIC (you should ask if that is possible as many/most ex-pats can) then you have only 1 year's grace.

 

I thought class 2 NICs were for self-employed people, but I found the link here that I can indeed pay class 2. And that's about 1/5th as much.
https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions
 

Quote

The amount you quote for 2020/21 suggests to me that it is already partly filled as the annual rate was £795.60.  Something to check with HMRC before paying...


It does say "You did not make any contributions this year". Which is true as I was in Germany by then. I don't understand that either.

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Have a read of Booklet NI 38.  It explains who can pay Class 2.  I would then have a chat with DWP Future Pensions Centre to answer some of your questions.

 

The reason for wanting to know your starting amount is that for each year you pay (whether mandatory or voluntary contributions for 2016/17 onwards adds £5.29 to your starting amount, up to the max of £185.15 per week (subject of course to the point above about "protected payments").  When I asked DWP to explain my starting amount, how it was calculated and the link with the max I could get they were more than pleased to do so.

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35 minutes ago, GaryC said:

Someone resident in Germany asked me the other day whether Brexit had changed the position about claiming a deduction in Germany for NIC payments as people in some forum they were reading were most confused and couldn't seem to get an answer from the FA (perhaps the latter is normal as it is seen as giving tax advice?).  I said I didn't think Brexit had changed anything, not least because your posts on this post-date the end of transition but am not sure exactly where the eligibility criteria are set out.  Can you point me/us/them to the appropriate statutory provision?  

It's simply §10 (1) Nr. 2 a) EStG, nowhere in there does it say that the contributions have to be to German public pension insurance: https://www.gesetze-im-internet.de/estg/__10.html

 

H10.5 "Beiträge an ausländische Sozialversicherungsträger" EStH (the section H10.5 will only clap open in a Microsoft browser, it doesn't work in Google Chrome) is about contributions to non-German social security systems: https://esth.bundesfinanzministerium.de/esth/2021/A-Einkommensteuergesetz/II-Einkommen/5-Sonderausgaben/Paragraf-10/inhalt.html#anchor5a6590d1-5290-4a72-b8d9-2fd27a36e3c9

 

H 10.5

Hinweise

Beiträge an ausländische Sozialversicherungsträger

Zur Aufteilung der an ausländische Sozialversicherungsträger geleisteten Globalbeiträge zur Berücksichtigung der Vorsorgeaufwendungen im Rahmen des Sonderausgabenabzugs BMFvom 13.11.2020 (BStBl I S. 1215)

 

If you click on the "Anhang 1a IV": https://esth.bundesfinanzministerium.de/esth/2021/C-Anhaenge/Anhang-01a/IV/inhalt.html

and scroll down, you get:

  • "Die Aufteilung von Globalbeiträgen, die an Sozialversicherungsträger in Ländern außerhalb Europas geleistet werden, ist nach den Umständen des Einzelfalls vorzunehmen. Gleiches gilt nunmehr auch für das Vereinigte Königreich (GB). Informationen zur Aufteilung der dortigen Globalbeiträge stehen ab Januar 2020 nicht mehr zur Verfügung."
  • "The allocation of global contributions paid to social security institutions in countries outside Europe is to be made according to the circumstances of the individual case. The same now also applies to the United Kingdom (UK). Information on the distribution of global contributions there will no longer be available from January 2020."
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9 hours ago, GaryC said:

 ...they calculate what you would receive if all contribution periods had been made in Germany (this is where overlaps are ignored).  .

 

Overlap = parallel in my layman s jargon. 

Nothing detrimental in this. Just not the most advantageous way to proceed.

He may yet end up working in UK again where he would be paying contributions. Or he may stop working in DE in a few years time. It would then be to his advantage to pay UK contributions for years where he is not paying in Germany. (What I meant by paying in series. First one country then the other, not both simultaneously.)

 

Correct me if my understanding is wrong. I have no doubt you are far more clued up on this than I am. 

 

I wonder if there will be any money in the pot in 20 years time to pay anyone anything... or slightly more likely whether everyone will just be paid the same (huge :lol:) amount regardless of their contribution record.

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11 hours ago, PandaMunich said:

It's simply §10 (1) Nr. 2 a) EStG, nowhere in there does it say that the contributions have to be to German public pension insurance: https://www.gesetze-im-internet.de/estg/__10.html

 

H10.5 "Beiträge an ausländische Sozialversicherungsträger" EStH (the section H10.5 will only clap open in a Microsoft browser, it doesn't work in Google Chrome) is about contributions to non-German social security systems: https://esth.bundesfinanzministerium.de/esth/2021/A-Einkommensteuergesetz/II-Einkommen/5-Sonderausgaben/Paragraf-10/inhalt.html#anchor5a6590d1-5290-4a72-b8d9-2fd27a36e3c9

 

H 10.5

Hinweise

Beiträge an ausländische Sozialversicherungsträger

Zur Aufteilung der an ausländische Sozialversicherungsträger geleisteten Globalbeiträge zur Berücksichtigung der Vorsorgeaufwendungen im Rahmen des Sonderausgabenabzugs BMFvom 13.11.2020 (BStBl I S. 1215)

 

If you click on the "Anhang 1a IV": https://esth.bundesfinanzministerium.de/esth/2021/C-Anhaenge/Anhang-01a/IV/inhalt.html

and scroll down, you get:

  • "Die Aufteilung von Globalbeiträgen, die an Sozialversicherungsträger in Ländern außerhalb Europas geleistet werden, ist nach den Umständen des Einzelfalls vorzunehmen. Gleiches gilt nunmehr auch für das Vereinigte Königreich (GB). Informationen zur Aufteilung der dortigen Globalbeiträge stehen ab Januar 2020 nicht mehr zur Verfügung."
  • "The allocation of global contributions paid to social security institutions in countries outside Europe is to be made according to the circumstances of the individual case. The same now also applies to the United Kingdom (UK). Information on the distribution of global contributions there will no longer be available from January 2020."

 

Thanks - I had landed on §10 but not on H10.5, so most helpful. I'll pass on the relevant links.

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3 hours ago, optimista said:

 

Overlap = parallel in my layman s jargon. 

Nothing detrimental in this. Just not the most advantageous way to proceed.

He may yet end up working in UK again where he would be paying contributions. Or he may stop working in DE in a few years time. It would then be to his advantage to pay UK contributions for years where he is not paying in Germany. (What I meant by paying in series. First one country then the other, not both simultaneously.)

 

Correct me if my understanding is wrong. I have no doubt you are far more clued up on this than I am. 

 

I wonder if there will be any money in the pot in 20 years time to pay anyone anything... or slightly more likely whether everyone will just be paid the same (huge :lol:) amount regardless of their contribution record.

 

The future is hard to predict but one must also be mindful of the time limits for paying UK voluntary NIC.  If there is a realistic probability of returning to the UK and having to pay mandatory NIC for sufficient years to get the max possible pension then I would agree that waiting is something to consider but for every year paid "late" the price increases to that of the year of payment and of course, as of next year, the normal "max 6 years in arrears" rule returns.

 

The key is to ensure one has the best mix of cost (overall), maxing out the UK position and maxing out on adding Wartezeit to the German system with those UK years and that of course is different for each person's circumstances, but to obtain the maximum benefits from each country's rules, I think overlaps are inevitable.

 

You have 50 (soon to be 51) years during which you are allowed to pay UK NIC or gain NIC credits, out of which you need (in simple terms) 35 full years to get the full state pension.  In Germany you need 35 years Wartezeit to claim the pension for long service at 63, reduced by 3.6% per year for taking it early.  You need 45 years to claim the exceptionally long service version 3 years early (in simple terms), without reduction.  Your UK years (that don't overlap) contribute to that and depending on how your life panned out, those UK years may also increase the German pension (a fortuitous happenchance in my opinion).  Time for a spreadsheet, calculator, to work out what is best for you, lol...

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18 hours ago, GaryC said:

I am not sure I follow this post.  Overlapping periods are indeed ignored, i.e. if you have contributions in Germany and the UK for the same period then the UK contributions are ignored but I do not follow the point about series and parallel.  The Germans will do 2 calculations under the EU rules on the coordination of social security systems.

1. they calculate what you would receive based solely on your German contribution record (the innerstaatliche Berechnung)

2. they calculate what you would receive if all contribution periods had been made in Germany (this is where overlaps are ignored).  This is the "theoretical amount" and is then pro-rated based on the ration of your German years to the total number of years (the zwischenstaatlice Berechnung)

 

Your pension in Germany is the higher of those 2 calculations.  From personal experience, the second one can be significantly higher.  Also, if you have less than 35 or 45 years in Germany to claim the 35-year or 45-year version of their pension then the UK years used in 2. can get you to the magic 35 or 45 to qualify.

 

Wow this is complicated.

 

So if I can ask.. I understood in Germany the pension was based on the amount you actually paid in - Entgeltpunkte - with the caveat there's now Grundrente guaranteeing a minimum amount.  
 

When you say "they calculate what you would receive if all contribution periods had been made in Germany", do you mean they're looking at the amount you actually earned in the UK or are they calculating a set amount for each year that's counted in the UK (i.e. like the Grundrente 0,8 Punkte per year)?

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