Retirement: How is the widow's pension offset against one's own pension?

If a partner dies, widows' and orphans' pensions are intended to ensure that the livelihood of the survivors is at least somewhat secure. The same applies if a parent dies and the children are still minors or in training, then an orphans' pension is paid. However, the following applies to both types of survivors' pension: They are primarily intended to support those who do not have a high income themselves. Therefore, they are reduced as soon as the income of the survivors exceeds a certain level.

In general, the conditions for survivors' pensions are complicated. And the pension amounts, allowances and tax rates all depend on the calendar year, the date of birth of the deceased, the respective retirement age, the age of the survivors and the date of marriage. Therefore, it is essential to consult experts who can give specific advice for your own case. However, the following principles apply:

There is initially an allowance, which for single people is currently 1,038.05 euros in 2025. It is calculated from the current pension value per pension point (currently 39.32 euros) and is multiplied by a factor of 26.4. If the surviving dependent has younger children who are still entitled to an orphan's pension, the allowance is increased by child supplements; for two children it is around 1,500 euros.

Then it is determined how much your own net income or net pension exceeds this allowance. Assuming your own monthly pension is 1,500 euros, minus the 1,038 euro allowance, that leaves 462 euros. The German pension insurance calculates a flat rate of 15 percent of this. In this case, that comes to 69.30 euros. The widow's pension is then reduced by this amount because your own net pension is slightly higher than the allowance allows.

For survivors who are still working and do not receive a pension themselves, the net earned income that is above the allowance is used as the basis. A flat rate of 40 percent of this is taken into account. So someone who earns 2,500 euros, minus 1,038 euros, is 1,462 euros above the allowance. 584 euros of this is taken into account, i.e. deducted from the widow's pension amount.

All types of income are taken into account to determine net income, except for the so-called “needs-based benefits”, which are disability pensions, citizen’s allowance and basic security. Benefits from state-subsidized pension plans (i.e. Riester and Rürup pensions) are also not included.

How much money should beginners invest in the various asset classes stocks, bonds, commodities and crypto in order to achieve a good return? And when should you start investing? The most important steps for your portfolio

Income such as the monthly pension or monthly income, income from renting and leasing, capital income (i.e. savings account interest or share income), and for the self-employed, the expected annual income are added up. The gross amounts are first determined from all income. For employees, a flat rate of 40 percent is then deducted from this, which should roughly correspond to the tax and contributions burden of dependent employees. For pensions, a flat rate of 15 percent is deducted, which should correspond to the usual taxes and health insurance contributions. 25 percent is deducted from rental income. The remaining values ​​are added up and give the net income.

The procedure described above is then used to determine the remaining portion of the widow's pension that will be paid out.

For tax purposes, it is irrelevant whether someone only receives a pension or also a widow's pension . The basic rule is: both incomes are added together and a basic allowance applies again. This time the basic allowance for pensioners, which will be 12,084 euros in 2025. This basic allowance is deducted from your own pension income. Taxation of the pension therefore only begins from these approximately 1,000 euros per month.

According to the Federal Ministry of Finance, new pensioners can therefore currently receive a gross pension of around 16,240 euros per year, or 1,323 euros per month, without paying taxes on it, because the taxable portion of the pension was already 83 percent in 2024, which means that 13,481 euros of the 16,240 euros per year are subject to tax. Pensioners can initially deduct special expenses and pension expenses from this, as well as claim extraordinary expenses, which is done via the annual tax return. This reduces their pension, so that those 12,084 euros remain taxable income.

The statutory pension needs to be reformed urgently. But nobody talks about the many billions that are spent on civil servants' pensions. There is at least as much need for reform here

However, the respective tax rate of the pension is not the same for all pensioners, but depends on the year of retirement and increases slightly each year. In 2005, this increasing tax rate began at 50 percent. In 2040, 100 percent of gross pension income will be taxable.

This article is a reprint of Stern, which, like Capital, belongs to RTL Deutschland. It will be available here on Capital.de for ten days. After that, you will find it on www.stern.de.