If you are reading this article, you are probably already aware that 9,3 percent of your salary is deducted each month and transferred to the Deutsche Rentenversicherung to finance your pension once you retire.
You have probably also heard that after leaving Germany you could qualify for a pension refund. But how do you get that pension refund and which other rules apply? Let’s take a closer look.
Basic requirements for a German pension refund before reaching retirement age
In a nutshell: if you were employed in Germany and pension funds were deducted from your salary, you have to meet all three of the following requirements to get these contributions back as a refund (i.e. to receive a lump sum refund, rather than a standard old-age pension after reaching retirement age):
- You are a non-EU citizen
- You live outside of the EU
- 24 months have passed since your last pension contribution
If you fulfill these basic requirements, then congratulations! You are likely to qualify for a German pension refund.
However, there are some additional rules that you should be aware of, that depending on your citizenship may or may not affect you.
Specific requirements based on your citizenship
On top of the basic requirements listed above, some additional rules may apply. These are due to social security agreements made between Germany and the following countries:
USA, India, Australia, Canada, Albania, Moldova, The Philippines or South Korea
If you have citizenship of one of the above countries, to qualify for a refund, your German pension insurance balance must hold fewer than 60 months of contributions. Once you contribute for five years or more, you can no longer get a refund, no matter where you live or how old you are. Instead of claiming a refund you can apply for a German pension once you have reached statutory retirement age.
Brazil, Japan, and Uruguay
If you are from one of these countries and have moved back there, the same rule applies to you. To qualify for a pension refund, your pension balance must hold fewer than 60 months of contributions. Instead of claiming a refund, you can apply for a German retirement pension once you reach German retirement age.
However, if you are a national of Brazil, Japan or Uruguay, but you live abroad in another country, for example the US, this limit does not apply. The 60-month limit only applies if you live in Brazil, Japan or Uruguay.
Israel
Israeli citizens only qualify for a German pension refund if they live abroad in another country. It does not matter how long you have paid contributions in Germany.
EU
EU citizens and people living within the EU, regardless of their nationality, are treated the same as German nationals and residents: you have to wait until you reach German retirement age and then either draw a monthly German pension or - if for some reason you do not qualify for a pension - request a refund.
Other countries
If your home country is not listed above, it has not signed a social agreement with Germany stipulating additional rules for your refund, and so congratulations! Only the basic requirements apply to you and you do not have to worry about how long you have been working in Germany.
How much is refunded?
Only contributions paid by yourself can be refunded and no interest is applied. So, for example, if you previously received unemployment insurance benefits, the pension contributions paid by the unemployment insurance on your behalf cannot be refunded.
If you have already received any benefits from the pension insurance, only contributions made after receiving benefits can be refunded.
How to claim your German pension refund
Basically, there are two ways of claiming your German pension refund: You can do it on your own or you can enlist the help of a professional service to take care of the whole process for you.
The benefit of using a dedicated service is that you won’t have to deal with German bureaucracy yourself (and the process is quite complicated)! This will accelerate the process and can also give you cheaper options when it comes to transferring the funds to your personal bank account.