Navigating Widow's and Personal Pensions: A Comprehensive Guide
Pension Calculation: Determining the Survivors' Benefit Using One's Individual Pension Amount - Spouse's Retirement Benefits: Determining the Amount Based on One's Own Pension Amount
by Nadine Oberhuber* + - 4 Min* (approximate)
When a partner passes away, widow and orphan pensions serve to cater to the basic needs of the surviving dependents. This is also applicable when a parent dies, leaving children who are still minors or in education, in which case an orphan's pension is initiated. However, it's essential to note that these benefits primarily provide financial support for those without a substantial income. Consequently, the payout reduces when the survivor's income surpasses a specific amount.
The rules governing survivor's pensions are intricate, encompassing factors like the calendar year, the deceased's date of birth, retirement age, survivor's age, marriage date, and pension amounts, among others. Given the complexity, consulting professionals who can offer tailored advice based on your individual situation is highly recommended. That said, the following principles remain relevant:
Calculating the Widow's Pension Amount
A tax-free allowance serves as the starting point. For singles in the year 2025, it currently amounts to 1,038.05 euros. This value is produced by multiplying the current pension value per pension point (39.32 euros) by the factor 26.4. If a widow is caring for younger children still entitled to an orphan's pension, the tax-free allowance increases through child supplements, reaching approximately 1,500 euros for two children.
Next, the own net income or net pension that exceeds this tax-free allowance is determined. For example, assuming a monthly pension of 1,500 euros, after subtracting the 1,038 euros tax-free allowance, 462 euros remain. The German Pension Insurance then applies a 15 percent reduction to this amount. In the aforementioned case, this would amount to deducting 69.30 euros from the widow's pension, considering the survivor's net pension surpasses the tax-free allowance's permissible limit.
For survivors still employed and yet to receive a pension, the net employment income in excess of the tax-free allowance is the basis for calculation. A flat rate of 40 percent is then deducted, resulting in 584 euros being withheld from the widow's pension if one is earning 2,500 euros after accounting for the 1,038 euros tax-free allowance.
What Constitutes Net Income?
To compute the net income, all types of income are taken into account, excluding the so-called "means-tested benefits" such as disability pensions, unemployment benefit, and basic security. Additionally, benefits from state-funded pension schemes, including Riester and Rürup pensions, are disregarded.
Various income sources— such as monthly pensions or incomes, rental and leasing income, capital income (like savings interest or dividend income), and, for the self-employed, expected annual income— are added together to arrive at the gross amount. Employee gross income is then adjusted using a flat rate of 40 percent, meant to approximate taxes and social security contributions. For pensions, this flat rate is reduced to 15 percent, approximating usual taxes and health insurance contributions. For rental income, a 25 percent reduction is applied, and the remaining values are combined to yield the net income.
Calculating the Remaining Portion of the Widow's Pension
The process of determining the remaining portion of the widow's pension is carried out as mentioned above.
Taxation of Pension and Widow's Pension Recipients
For tax purposes, it makes no difference whether someone receives only a pension or also a widow's pension. In principle, both incomes are combined and a basic allowance is applicable. This yearly basic allowance for pensioners was 12,084 euros in 2025. This basic allowance is subtracted from the total pension income. Consequently, according to the Federal Ministry of Finance, newly retired individuals can currently receive a gross pension of around 16,240 euros per annum, or 1,323 euros per month, without incurring taxes on it, because: The taxable portion of the pension was 83% in 2024, with 13,481 of the 16,240 euros subject to taxation. Pensioners can initially deduct special expenses and provisions for old age, as well as extraordinary burdens through the annual tax return. This adjustment lowers their pension, leaving 12,084 euros of taxable income.
However, the taxable portion of the pension changes depending on the year of retirement and rises gradually each year. In 2005, this rising tax rate began at 50%. By 2040, 100% of gross pension income will be taxable.
- Pension
- Spouse
- Retirement
- The community policy might not influence the calculation of a widow's pension, as it primarily caters to financial support for those without a substantial income, such as pensions and personal-finance.
- During vocational training, a survivor's pension amount could still be calculated, considering the tax-free allowance and net income or net pension, which is crucial to determine the reduction in the survivor's pension.
- Should a widow or pension recipient decide to invest in vocational training, they must consider how this might affect their income and the resulting taxation, as taxes are applicable to both pension and widow's pensions.
- In the event of a pensioner's death, their dependents may receive an orphan's pension or survivor pension, which requires careful calculation based on factors like the calendar year, date of birth, retirement age, survivor's age, marriage date, and pension amounts.
