Is the Riester bonus worth it during parental leave?
Parents who care for their child during the first three years receive child-raising periods credited to their pension account - three pension points. For children born before 1992, the credit is now two pension points from 1 July 2014, instead of one (§ 56 and § 249 SGB VI). During the period for which they are credited with child-raising periods, individuals are legally subject to compulsory statutory pension insurance (§ 3 No. 1 SGB VI).
- Due to the compulsory pension insurance, the non-working parent is entitled to the Riester subsidy and is even "directly" eligible for the allowance, provided they have their own Riester contract.
- The subsidy consists of a basic allowance of 175 Euro and a child allowance of 300 Euro per child, and, in the case of higher income, possibly an additional special expenses deduction of up to 2.100 Euro.
- To receive the full allowance, a personal contribution of 4% of the previous year's income minus the allowance entitlement, maximum 2.100 Euro minus the allowance entitlement, must be paid into the Riester contract, but at least the minimum amount of 60 Euro. For one child, the mother must pay a maximum of 1.625 Euro (2.100 Euro - 175 Euro - 300 Euro).
The child-raising period begins after the month of birth and ends after 36 calendar months. However, for the Riester subsidy, it is sufficient if the conditions are met in just one month of the year. For example, if the child is born in November, the child-raising period begins on 1 December. But the Riester subsidy is available for the whole year.
What happens to the child-raising period that cannot be used due to the birth of another child? There is a very favourable solution: If another child is born within the 36-month child-raising period, the child-raising period for this child is extended by the number of calendar months of simultaneous upbringing. The unused months of the first child's upbringing period are "added" to the second child. The same applies to multiple births: Here, the child-raising period is taken into account twice or three times.
About the minimum contribution:
If the young mother was employed in the year before the birth of the child, the previous year's income is used as the basis, even if no income subject to contributions is earned in the first year of upbringing. To receive the full allowance, 4% of the previous year's earnings must be paid into the Riester contract, maximum 2.100 Euro, each minus the allowance entitlement. In the second and third year of child-raising, the minimum amount of 60 Euro as a personal contribution will then be sufficient, provided no employment was taken up in the previous year. If the young mother had no or only a low income in the year before the birth of the child, the minimum amount of 60 Euro is also sufficient. If the mother takes up employment during the child-raising period or after the third year, she only has to pay the minimum amount in the first year of employment, as the "zero income" of the previous year is used as the basis.
It still needs to be clarified whether parental allowance counts as personal income and is therefore the basis for the minimum contribution. No, according to the Federal Ministry of Finance, parental allowance is not considered relevant income and is therefore not taken into account in the calculation of the minimum personal contribution (BMF letter of 14.11.2007, IV C 8-S 2492/07/0004).
