📉 Tax relief in old age
In brief
The statutory pension is taxed on a deferred basis: the taxable share of a pension depends on the year the pension starts and rises step by step for pensions that start later. If you have other income alongside your pension (e.g. from rental or capital assets), you can additionally use the age relief amount. If you care for relatives or have a high care level yourself, you can also claim a care lump sum (Pflege-Pauschbetrag).
Step by step
- Check whether the pension is taxableThe taxable share depends on the year the pension starts and stays the same in percentage terms for the entire duration of the pension, while the taxable euro amount continues to rise through annual pension adjustments.
- Use the age relief amountCheck whether the age relief amount applies from your 65th birthday to additional income outside the pension (e.g. rental income).
- Claim the care lump sumCarers who are relatives, or affected persons with a high care level, can claim a care lump sum instead of individually proving extraordinary burdens.
- File your tax return on timeCheck whether you are obliged to file an income tax return, and if needed use a Lohnsteuerhilfeverein (income tax assistance association) or a tax adviser.
Deadlines
- Even though the taxable share for your own pension cohort is fixed, the taxable portion in euros continues to rise through the annual pension adjustment on 1 July.
- If no return is filed despite a tax obligation, the Finanzamt (tax office) may estimate and impose late-filing surcharges.
- The age relief amount does not apply to the pension itself, but only to other income such as rent, capital income or wages.
In depth · legal basis, figures and practice – for advisers and professionals
Taxable share of the pension (§ 22 EStG)
Since the Retirement Income Act (Alterseinkünftegesetz), the statutory pension has been taxed step by step on a deferred basis. The taxable share depends on the calendar year the pension starts and was slowed from 2023 by the Growth Opportunities Act (Wachstumschancengesetz): instead of 1 percentage point as before, it has since risen by only 0.5 percentage points per cohort, so that full taxation is reached only in 2058 instead of 2040. For pensions starting in 2026, the taxable share is likely to be around 84%; in case of doubt, the exact official value for the respective pension cohort should be checked in the pension payment notification or with the Finanzamt.
Age relief amount (§ 24a EStG)
Persons who turned 64 before the start of the calendar year receive an age relief amount on certain other income (not on the pension itself), as a percentage with a maximum amount, which likewise depends on the year of birth and – parallel to pension taxation – declines more slowly through the Growth Opportunities Act than originally planned. The exact euro amounts per birth cohort for 2026 were not conclusively checked in this research and should be requested from the Finanzamt or a Lohnsteuerhilfeverein.
Care lump sum (§ 33b Abs. 6 EStG)
Since the 2021 reform, the care lump sum can be used independently of the Merkzeichen "H" (helplessness) disability mark where there is a corresponding care level, and is graded at €600 (care level 2), €1,100 (care level 3) and €1,800 (care level 4 or 5, or where the Merkzeichen H applies).
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