How long can a fresher stay unemployed

What happens to my pension if I become unemployed?

If you lose your job, you should not rush to terminate your pension scheme. There are smarter solutions that pay off more.

If you lose your job, you usually have to cut back on private pension provision. In this difficult situation, employees who have already completed a retirement plan should not lose their heads. The following applies:

Canceling is always the worst solution!

Those who hastily terminate their contracts not only deprive themselves of the promised pension benefits, but also have to pay back the state subsidies and tax advantages in the case of Riester contracts, for example. In short: Those who quit are doing bad business. Unemployed or Hartz IV recipients who are no longer able to service their old-age provision regularly should instead lower their contributions, suspend the contract or make them exempt from contributions. These adjustments have three advantages over termination:

  1. The Survivor protection remains.
  2. The contract may after unemployment under certain circumstances continued - Riester contracts even after a long break in contributions.
  3. The Pension entitlement remains, even if this will later be lower than expected at the time of closing.

We have put together here what other options there are to adjust your retirement provision in the event of financial bottlenecks.

Pension calculator: how much money do I get in old age?

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Can the job center access my pension?

Employees who have been employed for a longer period and lose their jobs are entitled to Unemployment benefit I (ALG I). You can receive this benefit for a maximum of 12 months - an extension to 15 to 24 months is only available for long-term insured employees over 50 years of age. The job center does not credit any assets for ALG I. Existing old-age provision contracts must therefore not be touched during this time.

Anyone who has not found a job for a long time has to Unemployment benefit II apply, colloquially called Hartz IV. Before this state benefit is granted, however, the applicant must have access to his private assets. In principle, this also includes life and pension insurance - but the state is not allowed to access all of them.

Which forms of old-age provision are "Hartz IV safe"?

Certain old-age provision contracts are protected from state access ("exclusion from exploitation"):

  • Subsidized old-age provision contracts such as Riester and Rürup pensions,
  • Company pensions (if they are only paid out in retirement),
  • Life and annuity insurance with a correspondingly long term, for which an exclusion of liquidation until retirement has been agreed.

With these forms of old-age provision, savers can be sure that their private pension will remain intact in the event of unemployment, even in the event of financial difficulties. Hartz IV recipients also have an exemption for their retirement provision of 750 euros per year of age.

Riester assets are also protected in the event of personal bankruptcy

The Federal Court of Justice decided at the end of 2017 that the capital saved in a Riester pension may not be attached. A woman who had to file for personal bankruptcy had sued. The insolvency administrator wanted to use the money from the Riester contract to settle the debt. The BGH rejected that. As soon as the prerequisites for funding are met and an application for allowances is made, the insolvency administrator may no longer collect the Riester capital.

Riester allowance application secures seizure protection

Riester savers should definitely apply for a permanent allowance. This not only secures them state funding. It also ensures that the Riester pension cannot be seized in the event of personal bankruptcy.

Basic security: higher allowances for private old-age provision

Low-wage earners and people who have been unemployed for a long time often have low pension entitlements in old age. If your monthly income in retirement is below EUR 838 on average, you should have it checked whether you are entitled to basic security. This is the recommendation of the German Pension Insurance.

In 2018, the state made supplementary old-age provision more attractive for low-wage earners. As of this year, those who slip into basic security in old age have a basic tax allowance of € 100 for private pensions. In addition, a further 30 percent remain free of credit. With a monthly Riester pension of 150 euros, for example, 115 euros (100 euros + 30 percent of 50 euros) would not count towards the basic security. However, the exemption is limited to 50 percent of standard requirement level 1. In 2018, this corresponds to a private pension of a maximum of EUR 208.