How much are allowances and special expenses for Riester?
Anyone who pays an annual minimum contribution of 4 per cent of the previous year's income into their Riester contract receives the full bonuses. Every Riester saver receives the so-called basic bonus, which is 175 Euro. A flat-rate child bonus is paid for each child eligible for child benefit. This amounts to 185 Euro for children born before 2008 and 300 Euro for children born on or after 1 January 2008. Unless otherwise agreed, the child bonus is paid into the mother's account. However, the couple can apply for the child bonus to be allocated to the father. Such a transfer application remains valid until it is revoked. By the way, the application is possible for each individual child, so that, for example, one child can be allocated to the father and another to the mother.
Example: A married couple with two children (born in 2002 and 2009) receives a total of 835 Euro in Riester bonuses per year.
If you do not pay the respective minimum contribution into the Riester contract, you will only receive the bonuses on a pro rata basis. However, you can immediately deduct the bonuses from your calculated minimum personal contribution (four per cent of the previous year's income). The remainder is your actual minimum savings amount that you must pay to receive the full bonuses.
Since 2008, a maximum of 2.100 Euro can be deducted as special expenses. This makes the tax benefits particularly worthwhile for high-earning savers. You must claim the special expenses deduction in your income tax return for the year in which you paid the contributions into the Riester contract. Not only your own contributions are eligible, but also the Riester bonuses. The decisive factor here is always your bonus entitlement, not the actual bonus paid. Even if you do not apply for a bonus, the bonus entitlement can be deducted as special expenses and is included in the income tax favourable assessment. It is therefore not advisable to forgo the pension bonus and instead take the tax advantage for your own use.
How much are allowances and special expenses for Riester?
What is the amount of the Riester child allowance?
For each child eligible for child benefit, a fixed child allowance is paid if the father or mother takes out a Riester contract. This allowance is 185 Euro for children born before 2008 and 300 Euro for children born on or after 1 January 2008. Unless otherwise agreed, the child allowance is paid into the mother's account.
Spouses can apply for the child allowance to be allocated to the father. Such a transfer application remains valid until it is revoked. By the way, the application can be made for each individual child, so that, for example, one child can be allocated to the father and another to the mother.
For divorced or unmarried parents, the child allowance is granted to the person receiving the child benefit. If both parents receive child benefit for the same child in succession, the child allowance is granted to the parent who received child benefit for the first entitlement period in the calendar year.
What is the amount of the Riester child allowance?
Who receives the child allowance?
The government supports Riester contracts with bonuses and tax advantages. The basis of the Riester funding is the basic bonus for the saver themselves and the child bonus if the saver has children. The child bonus is not automatically received by the parent who also receives the child benefit, but generally by the mother if married. If both parents apply, the child bonus can also be transferred to the father.
To do this, you must enter the number of children in your tax return - in the AV annex - for whom the child bonus is to be transferred from the mother to the father. You must also specify in the bonus application with your Riester provider if you want to transfer the child bonus to the father. If the parents are permanently separated or not married, the child bonus goes to the parent who is fully taxable and actually receives the child benefit.
This can also be a stepfather or stepmother. If the entitlement to child benefit changed during the year, the decisive factor is who received the child benefit at the beginning of the year.
To receive the full funding, you must save four per cent of the previous year's income subject to social insurance contributions. The relevant amount is the previous year's income. If you save less, you will receive a partial bonus. If you are temporarily not liquid, you can suspend your Riester contract, but you will also have to forgo the government funding. Non-eligible spouses can receive the basic bonus if they have their own Riester contract and pay in at least the minimum amount of 60 Euro.
The following calculation shows how the funding works for a family with two children:
The gross family income is 40.000 Euro in the year 2023. For the full funding, at least 1.600 Euro must be paid into the Riester contract in the year 2024.
The government helps with the basic bonus of a total of 350 Euro for both spouses (2 times 175 Euro).
In addition, there is the child bonus of 185 Euro per child (born before 2008). For two children, this amounts to 720 Euro in government bonuses that the family is entitled to annually. These are deducted from the 1.600 Euro minimum savings, so the family only has to contribute 880 Euro in the year 2024. If the personal contribution is lower, the funding will be reduced accordingly.
Who receives the child allowance?
