More money for those unable to work: Accrued time increases pensions

People with reduced earning capacity benefit from the attribution period: their pensions increase. But the pension insurance company warns of future changes.

Munich – The so-called attribution period plays a crucial role in calculating the statutory disability pension. It takes into account not only the time actually spent in working life, but also the period between the start of the disability and the standard retirement age in the year in which the disability began. According to the German Pension Insurance, the amounts in this area have increased, as the portal Ihre-Vorsorge.de reported.

Accrual period improves pension for disabled people

The attribution period has helped to improve the pension for those with reduced earning capacity. In 2023, the monthly net pension for the 164,000 Germans who received such a pension for the first time was 1,001 euros. That is 51 euros more than in the previous year and almost 390 euros more than for those newly reduced earning capacity in 2013.

The attribution period has also improved the so-called earnings points, i.e. the pension entitlements acquired through one’s own work. In 2023, the pension insurance paid 1.73 million euros in disability pensions, which were based on an average of 12.6 earnings points. An average earner can earn one earnings point by paying pension amounts for one year.

Retiring early with reduced earning capacity is often necessary for health reasons such as back problems, cancer or mental illness. (Symbolic image) © BDS/Imago

Each pay point is assigned a euro amount, which is currently the “current pension value” of 39.32 euros. The credit period results in a monthly increase in disability pensions of almost 500 euros gross. However, this amount is reduced by the high pension deduction (for new pensioners in 2022, for example, more than 112 euros).

Pension plus to shrink in future according to pension insurance

However, the pension insurance company warns that the pension increase is set to shrink in the future. This is due, among other things, to the increased retirement age for those with reduced earning capacity, which has risen by three years to 54 in the last decade. Another factor is that many new pensioners with reduced earning capacity belong to occupational groups with low wages. The significantly extended accrual period has therefore contributed significantly to the increase. From 2018 to 2023, this has grown by almost two earnings points, which currently corresponds to just under 75 euros.

From July, the German pension insurance will pay supplements to around three million disability pensions. Old-age and survivors’ pensions that follow immediately on from the payment of a disability pension will also be higher. No application is required. According to the DRV, those entitled to the supplement will receive the supplement automatically.

It is no secret that many pensioners continue to work. However, there are new regulations for additional income in addition to pension in 2024.

DRV informs beneficiaries: There are pension supplements for those with reduced earning capacity

The DRV informs those entitled to it in July by means of a notice of their entitlement. In it, recipients can find information about the amount of the supplement and the period of payment. Payment is initially made independently of the pension in a separate transfer between the 10th and 20th of the month. The supplement and pension will only be paid out together in one sum from December 2025, according to the DRV.