(2023) What is a statutory annuity?

Annuities are fixed payments linked to a person's lifetime. Annuities and other benefits from statutory pension insurance, the agricultural pension fund, and professional pension schemes are only partially taxable, depending on the year the pension started.

If you received a pension from statutory pension insurance, you can request a „statement for submission to the tax office“ regarding your pension income as a completion aid. This will then be sent to you automatically in subsequent years. If the pension started in 2023, the taxable portion is 82.5%.

No entries regarding the taxable portion are required in the tax return. The tax-free part of the pension is determined in the year following the start of the pension and generally applies for the entire duration of the pension payments. As part of the pension taxation in subsequent years, this is deducted from the annual (gross) pension amount.

Pension increases resulting from regular pension adjustments are fully taxable. The same applies to benefits from private basic pension contracts (so-called Rürup pensions).

Annuities include in particular

• old-age pensions,
• reduced earning capacity pensions,
• disability pensions,
• occupational disability pensions,
• survivor's pensions such as widow's / widower's pensions,
• orphan's pensions, or
• parental pensions.

One-off payments, such as death benefits or settlements of small pensions, must also be declared. If you have been recognised as a victim of National Socialist persecution under Section 1 of the Federal Compensation Act (BEG) and pension periods due to persecution were taken into account in the calculation of your pension from statutory pension insurance, please inform the tax office informally.

Such periods may have been considered under the Act on the Payment of Pensions from Employment in a Ghetto (ZRBG), the Act on the Settlement of National Socialist Injustice in Social Insurance (WGSVG), or the Foreign Pensions Act (FRG). This also applies to widow's / widower's pensions if the deceased was recognised as a victim under Section 1 BEG and the pension payment includes corresponding pension periods. The tax office will check whether this pension is tax-free.