(2022) What are permanent financial burdens?

Permanent financial burdens are pension payments that a taxpayer makes to another person on a long-term basis and due to a legal obligation. These are regular payments, the duration of which, in the case of pension payments, is linked to the lifetime of one or more persons. Permanent financial burdens must be provided for at least ten years.

Unlike pension commitments, permanent financial burdens can be adjusted at any time. They are therefore variable in amount and depend on the financial circumstances of the payer and the recipient. This may be the case, for example, if the financial situation of the contracting parties changes.

Permanent financial burdens can be in cash or in kind. An example of in-kind payments is the so-called "born" permanent financial burdens. This includes, for example, the obligation to provide meals for a person.

Abbreviated permanent financial burdens can also be agreed if they end either with the death of the person or at the latest after a certain period.