Which allowances can pensioners use?

What allowances can pensioners use?

Pensioners who submit a tax return can claim various allowances and lump sums to reduce their taxable income.

1. Pension allowance

• The pension allowance is set in the second full year of receiving the pension.
• In the year the pension begins and the second year, the pension is taxed at the taxable rate. The remaining amount forms the pension allowance, which remains tax-free for life.
• From the third year onwards, the pension is taxable after deducting the pension allowance and the standard allowance for income-related expenses of 102 Euro.

2. Allowance for civil servants and company pensioners

• The allowance applies to pensions and company pensions.
• For pensioners in 2024, the allowance is 13.6% of the payments, up to a maximum of 1.020 Euro, plus a supplement of 306 Euro.
• Including the standard allowance for income-related expenses, up to 1.428 Euro remain tax-free.

3. Old-age relief amount

• Applies to pensioners with additional income.
• Those who turned 64 in 2023 receive 13.6% from 2024, up to a maximum of 646 Euro.
• Those who turn 64 in 2024 receive 13.2% from 2025, up to a maximum of 627 Euro.

4. Standard allowance for income-related expenses

• Pensioners receive a standard allowance for income-related expenses of 102 Euro per year.
• Higher income-related expenses (e.g. tax consultancy costs) can be claimed alternatively.

5. Special expenses

• Contributions to health and long-term care insurance can be declared as special expenses in the "Anlage Vorsorgeaufwand".
• Donations are also deductible as special expenses. If there are none, a lump sum of 36 Euro is deducted.

6. Extraordinary burdens

• Extraordinary burdens such as nursing home costs, household help, craftsmen's services, and medical expenses (e.g. for glasses, dentures) can be deducted.

7. Mini job

• Pensioners over 65 who have a mini job receive this income tax-free.

Tip: If a pensioner's income with all allowances and lump sums is below the basic allowance of 11.784 Euro (2024), no taxes are due.