– How self-employed persons and pensioners are also transferred from pension schemes to compulsory insurance –
Typically, (compulsory) members of the 89 professional pension schemes are either privately insured in old age (PKV) or voluntarily insured by the statutory health insurance system (GKV) at too high a price. However, this also frequently affects former self-employed persons and former top earners.
Pensioners of pension schemes – often covered by PKV in old age
Those affected can be, for example, doctors, veterinarians and dentists, architects, notaries, pharmacists, lawyers and patent attorneys, tax consultants and auditors, sworn auditors or psychological therapists. Many a state parliament has also set up such provisions for its members.
Usual measures in dealing with the rising private health insurance premiums are not only the legal strategic change to the emergency tariff as a healthy person with a monthly premium of about 100 Euros, but above all the tariff change – with frequent (dis)deception in the end, if the tariff change advisor had not foreseen and advised the often massive premium increase in the new private health insurance tariff.
Change back to statutory health insurance – even if you are over 55?
Taking up employment subject to compulsory insurance makes it possible to switch from private to statutory health insurance on a regular basis only for those younger than 55. But those who were then mainly insured by private health insurance in their professional life do not drive better later as pensioners, as they are then voluntarily insured pensioners. The same applies if no pension is drawn from the German Pension Insurance Scheme at all, because people only relied on the pension scheme or their own assets and private provision. However, anyone who is still an employee subject to compulsory insurance will not be registered as a voluntarily insured pensioner. Less unhappy are also those voluntarily insured in the SHI system who have transferred their additional sources of income to their spouse, for example through a matrimonial property regime – to avoid a SHI contribution obligation regarding income from rent, capital assets or private pensions.
But even those who are already 55 years old can return to the SHI system with the appropriate temporary flexibility, e.g. by temporarily taking up a second residence abroad. A remarkable offer is the procurement of a camouflage residence for up to more than 10 TEUR – but not in vain if the health insurance company checks this more closely. Some came back to the SHI system through unemployment or through mini-pensions in family insurance.
Combine self-employment and employment?
Those who do not want to give up their self-employment will have to plan precisely so that the “core and main focus” of the employee’s activity is legally presumed according to the concrete design to be planned. Alternatively, it is not suitable for everyone to combine a (partially) anticipated succession or a company sale for the hoped-for good cause of the SHI obligation with it – or to involve a trustee. For example, it may be sufficient to start a career as a beekeeper, with the welcome side-effect of comparatively generous agricultural EU funding. The law governing the professions limits the practical options for chamber professions a little.
Regularly no additional earnings limit for the pension scheme
Those who need at most part of their (possibly early) retirement benefits from the pension scheme can use the surplus as a tax shifting model to (continue to) pay into the statutory pension insurance (DRV) and thus acquire first-time or higher pension entitlements – or up to the tax-privileged maximum contribution into a private basic pension. In contrast to the statutory pension insurance, there are no additional income limits for the pension scheme, even in the case of early retirement.
According to the statutes, the early retirement pension of the pension scheme will often result in much larger deductions than a statutory pension – including different age limits. However, this is combined with a permanently lower taxable portion of the pension.
Compulsory membership by number of children or inherited
Since 2017, even (possibly married step-)children’s wealth has served to achieve compulsory insurance in the SHI system as a pensioner – three years per child are given as a pre-insurance period in the SHI system for the 9/10 of a SHI occupation in the second half of the occupation.
Anyone who was insured as an orphan, widower or widow of a compulsory member of the SHI system by family insurance can also inherit the status of a compulsory pensioner, as it were.
Covering the risk of longevity – also an option via DRV?
A targeted variant of old-age provision is to spend your savings until you reach the age of 80 – for example, if you do not want to inherit anything. 1 TEUR life-long monthly pension, a woman can buy herself (payable from age 80) for 7 annual pensions (as a single premium) at age 55. For men, this is cheaper abroad and can be represented with 6 projected annual pensions. As an immediate pension or starting at age 66, it costs up to more than three times as much.
DRV should be considered as an alternative or for risk diversification: For each year of further payments from the standard retirement age onwards, there is an additional monthly pension of around EUR 65 and for each year of later pension commencement, a supplement of 6% on the total pension. This means that anyone who can expect a monthly pension of EUR 1,000 from the standard retirement age can increase it to 142% from EUR 1,455 – i.e. EUR 2,066 – in 2019 by continuing to pay the maximum monthly contribution of EUR 1,246 for 7 years, thus more than doubling it, not counting the annual dynamic adjustments to the pension value.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.experten.de (published on February 27, 2019)
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About the author
PhD, MBA, MM
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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