Important Update for Retirees: Significant Refunds on the Way

Many retirees in Germany are set to receive an important notification regarding potential refunds that could amount to several hundred euros. This situation arises from a revision in the contribution structure for long-term care insurance that came into effect on January 1, 2023. Under this new regulation, parents are required to pay lower contributions compared to childless individuals or those whose children are older than 25 years. However, this change had not yet been reflected in the pension payments for many retirees, as the German Pension Insurance (DRV) needed to collect and verify data regarding the number of children and their ages.

As of April 16, 2025, the DRV has confirmed that all necessary data has now been gathered, allowing for the commencement of the refund process. Affected retirees will soon receive a formal notification outlining the details of their refunds.

Starting this month, retirees who are parents of at least two children under the age of 25 will see adjustments in their contributions. The DRV has indicated that these adjustments will be reflected in the pension statements, particularly in the section detailing pension calculations.

In addition to future adjustments, the DRV will also process refunds for overpayments made since the introduction of the new contribution regulations in 2023. These refunds are expected to be issued between now and June 30, 2025, with notifications sent to the eligible retirees.

It is important for retirees to be vigilant. If they do not receive a notification by fall 2025 and they have at least one child or two children under 25 years of age during the period from January 1, 2023, to the present, they should reach out to the DRV for clarification.

The current long-term care insurance contribution rate for childless individuals stands at 4.2% of gross income, which is fully paid by retirees. In contrast, parents with a child over 25 years old pay a reduced rate of 3.6%. For every child under 25, the contribution rate decreases by 0.25%. To assist those affected, the DRV has provided visual aids illustrating these changes.

Refunds will be calculated automatically and will include interest at a rate of 4%. As an example, if a retiree has overpaid 100 euros, they will receive 104 euros as a refund. The actual refund amounts will vary for each individual. The DRV has indicated that in some cases, refunds could reach several hundred euros.

Additionally, a new adjustment in the contribution rates is scheduled for July 2025, which will mark the first time that the updated rates, effective from January 1, 2025, will be deducted from pensions. Although retirees will receive a pension increase of 3.74% for 2025, the retroactive application of the new long-term care contribution rates will likely reduce the net increase that retirees experience. The actual pension adjustment will take effect in August of this year.