Investment & Wealth
Disability Insurance
working despite a private disability pension
Working despite a private occupational disability pension: Your guide to additional earnings and legal framework
Are you receiving a private incapacity pension but would like to continue working? Many affected individuals wonder what rules apply for additional earnings and how they can avoid risking their pension. This article highlights the opportunities and pitfalls.
The topic in brief and concise terms
An additional income alongside private disability insurance is usually possible up to eighty percent of the previous gross income without jeopardizing the entitlement.
The specific regulations (e.g., referral clause, definition of life position) are always found in the individual insurance contract and must be observed.
Each commencement of work must be reported to the insurer; a breach of the reporting obligation can lead to the loss of the pension.
Quick Facts: The essentials of additional earnings with private disability insurance pension
Many insured individuals are uncertain whether they are allowed to work while receiving a private occupational disability pension. In principle, supplementary income is possible, but it is subject to certain conditions. The exact regulations can always be found in your individual insurance contract. Therefore, it is essential to look at the policy before starting a new job. Most contracts allow supplementary income as long as certain income limits are not exceeded. These are often set at eighty percent of the previous gross income. It is important to report any commencement of work to the insurer. The insurer then checks whether the conditions of the occupational disability are still met. Failure to comply with contractual obligations may result in the reduction or cessation of the pension. This section gives you a quick initial overview of the key points.
Practice Section: Understand specific examples and earning limits
The 80 percent rule and its significance
A frequently mentioned rule of thumb states that the new income should not exceed eighty percent of the last gross income before becoming unable to work. For example, if an insured person earned 3,000 euros gross, the limit for the new income would be around 2,400 euros. If the new income exceeds this threshold, the insurer may stop the pension payments. It is crucial how your disability insurance defines the term "disability" and the "previous standard of living." The standard of living includes not only income but also social recognition and the necessary skills of the activity.
Working in the old profession: The 50 percent hurdle
If you wish to continue working part-time in your previous profession, a different limit often applies. If you are able to perform more than fifty percent of your previous activity again, the entitlement to the disability pension generally lapses. An example: An architect who became unable to work due to burnout and worked forty hours a week should not work more than twenty hours a week in their architecture office. This regulation ensures that the pension is only paid in case of significant impairment of the ability to work. The exact design can vary depending on the contract, especially in the case of a private disability pension and part-time work.
Examples of additional earning opportunities
There are various ways to generate additional income despite receiving a disability pension. Here are some options that are often used:
Taking up freelance work to a limited extent, for example, as a consultant for a maximum of ten hours per week.
Starting a small online business that requires no more than fifteen hours of management per week.
Engaging in a mini-job up to the legal earning limit (currently 538 euros per month, as of 2024).
Part-time employment in a new field that is less demanding and whose income is below the 80 percent limit.
It is important to discuss each of these activities with the insurer in advance. Starting a new activity can have an impact on the health insurance premiums. The exact conditions and reporting obligations are crucial for maintaining your pension.
Expert Depth: Legal Foundations and Recent Judgments
The Reference Clause: The Crucial Point in the Event of Benefits
A central element in the insurance terms is the reference clause. A distinction is made between abstract and concrete references. Many modern contracts do without the abstract reference, which would allow the insurer to refer you to another profession that you could theoretically still practise, even if you cannot find a position. In the case of concrete references, the insurer checks whether a newly adopted occupation actually corresponds to your previous social standing. Your previous social standing is defined by the income and social recognition of your former profession. A judgment by the Higher Regional Court of Düsseldorf, for instance, stated that an income loss of up to ten per cent in the new profession can be deemed acceptable.
Legal Definition and Part-Time Trap
The legal definition of occupational disability can be found in Section 172, Subsection 2 of the Insurance Contract Act (VVG). Accordingly, a person is considered occupationally disabled if they are likely unable to continue practising their last occupation due to illness, injury, or a decline in strength. For part-time employees, the so-called
Tax aspects: Correct taxation of disability insurance pension and additional income
The tax treatment of your private disability pension and any additional earnings is an important aspect. The pension from a private disability insurance (third pillar of retirement provision) is only taxed with the so-called yield portion. This portion depends on the age at the start of the pension and the expected duration of the pension; it is often relatively low. If your total taxable income is below the basic tax-free allowance (€11,604 for singles in 2024), no taxes are due. Contributions to a private disability insurance can be claimed as other retirement expenses, although the maximum amounts of €1,900 for employees or €2,800 for self-employed individuals are often exhausted by health and care insurance contributions. Additional earnings from a new job must be taxed together with the disability pension and could push you into a higher tax bracket. A mini-job up to €538 (as of 2024) is usually tax-free. For precise calculation and advice, you should consult a tax advisor or a specialized calculator. Our expert tip: Be sure to clarify the tax implications before taking up employment. This is especially true if you are considering pausing or adjusting your disability insurance.
Conclusion and Call to Action: Stay Active with Confidence
Working despite a private occupational disability pension is a realistic and desirable option for many insured individuals. It allows for financial additional earnings and participation in social life. The key is to know and comply with the rules precisely. The amount of permissible additional income, usually around eighty percent of the previous income, and the conditions of the referral clause are central here. Open communication with the insurer and thorough examination of one's contract are essential to avoid jeopardizing the pension claim. Tax aspects and impacts on health insurance must also be considered. With the right preparation and possibly expert support, you can securely utilize the opportunities for additional earnings. nextsure, as a digital insurance portal, supports you in analyzing your individual situation and finding suitable coverage solutions. We help you gain clarity about your options when working despite a private occupational disability pension. Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific optimization suggestions.
More useful links
Deutsche Rentenversicherung: Offers a brochure about additional earnings for pensioners with reduced earning capacity.
Deutsche Rentenversicherung: Explains additional earnings and income calculation in retirement.
Bundesregierung: Answers frequently asked questions (FAQ) about pensions for reduced earning capacity.
Techniker Krankenkasse (TK): Provides information on additional earnings limits for pensioners.
Deutsche Rentenversicherung: Offers a definition of occupational disability in the glossary.
Deutsche Rentenversicherung: Provides general information on pensions for reduced earning capacity.
Bundesministerium für Arbeit und Soziales (BMAS): Defines occupational disability in the pension lexicon.
Verwaltung.bund.de: Provides information on benefits related to occupational disability pensions from the federal administration.
Statista: Shows statistics on the causes of occupational disability in Germany.
Wikipedia: Offers a comprehensive article on occupational disability insurance.
FAQ
Kann ich trotz Berufsunfähigkeitsrente einen Minijob annehmen?
Yes, taking on a mini-job is generally possible as long as you do not exceed the additional earnings limits specified in your contract and you inform the insurer. Income from a mini-job (up to 538 euros, as of 2024) is often tax-free but can be considered when evaluating your overall additional earnings.
Wie wird meine private Berufsunfähigkeitsrente versteuert, wenn ich zusätzlich arbeite?
The private incapacity benefit (third tier) is taxed only on the small yield portion. Your additional employment income is taxed normally. Both types of income are combined and subjected to your personal income tax rate.
Was ist der Unterschied zwischen abstrakter und konkreter Verweisung?
With abstract referral, the insurer can direct you to another job that you could theoretically perform, even if you do not hold a position. The concrete referral pertains to an actually performed new activity and evaluates its comparability with your previous standard of living. Many more recent contracts exclude abstract referral.
Welche Rolle spielt Paragraph 172 VVG beim Arbeiten trotz BU-Rente?
Paragraph 172, paragraph 2 of the Versicherungsvertragsgesetz (Insurance Contract Act), legally defines the term occupational disability. It forms the basis for when a claim can arise from a private occupational disability insurance policy.
Was bedeutet 'bisherige Lebensstellung' im Kontext der BU-Rente?
The 'previous standard of living' refers to the level provided by your last profession regarding income, social appreciation, and the necessary skills and knowledge. A new occupation should not reach or surpass this standard of living in order to avoid jeopardising the incapacity benefit claim.
Muss ich Krankenversicherungsbeiträge auf meine private BU-Rente zahlen?
In general, pensions from a purely private occupational disability insurance (third tier) do not incur health insurance contributions. This may differ in the case of occupational disability pensions from an occupational pension scheme or a Rürup pension. Additional employment income is, of course, subject to contributions.
