What are compensatory payments?
Compensation payments as part of the pension rights adjustment may be deductible as special expenses.
The amount of the actual payments made must be stated here. If you are claiming such special expenses for the first time, please attach a copy of the contract/pension agreement.
Since 2015, not only "payments as part of the pension rights adjustment" are deductible as special expenses, but also "payments to avoid the pension rights adjustment" (§ 10 para. 1a no. 3 and 4 and § 22 no. 1a EStG):
- The person obliged to make the adjustment can deduct their payments as special expenses. This requires an application from the person obliged to make the adjustment and the consent of the beneficiary. This allows both parties to specify exactly to what extent a tax deduction and the corresponding taxation should take place. The part of the compensation payments that is not claimed for tax purposes in the year of payment cannot be deducted in a later year.
- The adjustment option exists independently of whether it concerns a civil service, public law, private, subsidised or company pension scheme. The payments can only be deducted as special expenses. Previously, such compensation payments by civil servants to avoid a reduction in their pension entitlements could be deducted as income-related expenses.
Please use "Form U" for the application and consent. It must be signed by you and the recipient of the compensation payments. A prerequisite for the deduction as special expenses is that you enclose Form U.
