B. Premium-aided pension scheme
What is a premium-aided pension scheme and what is the amount?
As a rule, premium-aided provident schemes have replaced premium-aided pension schemes. If you signed your contract in 2003, at the latest, you may, however, continue to claim the tax credit for the following amounts:
- Supplementary pension insurance coverage with an insurance company
- Employee contributions to a pension fund or an employees' group insurance (Section 93 of the Insurance Supervision Act (Versicherungsaufsichtsgesetz) 2016)
- Savings with a pension investment fund
- Voluntary additional insurance under the statutory social-security scheme
Contributions to supplementary pension schemes and the purchase of shares in investment funds are not regarded as special expenses.
New contracts with pension funds may also be signed after 2003 and continue to be premium-aided.
As with building-society bonuses, the bonus for premiums to provident pensions depends on the circulation-weighted average return for federal bonds (period averages). In 2025, the premium will amount as in 2024 to 4.25% of the contributions. The maximum contribution basis is € 1,000.
How to claim the bonus?
You must apply for payment of the bonus with a declaration of payments, to be obtained from the respective contract partner (the deposit-managing credit institution in the case of pension investment funds). If you have several contracts, please remember that you may claim the bonus refund only for a maximum assessment base of € 1,000.
The bonus is paid for the year in which the premium was paid. Advance payments of premiums as of the 15th December are already recognised for the subsequent year. However, delayed payments will not be accepted.
How are incomes from premium-aided provident schemes taxed?
No tax is due on incomes that are based on premium payments for which a bonus was received.
Example
Every year, a taxpayer pays € 1,500 into a pension investment fund. The bonus was paid for € 1,000. The entire credit balance is transferred to a supplementary pension insurance scheme as a one-off premium. The annuity payments resulting from provident premiums in an amount of € 1,000 are tax-exempt. The annuity payments accounting for the remaining € 500 are taxable.