All About Widows' Pensions: When Your Own Pension and Survivor Benefits Collide
- Written by: Nadine Oberhuber
- Reading Time: Approximately 3 minutes
Calculating a Widow's Pension in Combinations with Your Own Pension: Learning the Mathematics Behind Both - Spousal Pension Calculation: Examining its Impact on an Individual's Retirement Benefits
Let's face it—losing a spouse is a tough time, and figuring out your financials during grief shouldn't be a hassle. But what happens when you've got both your own pension and survivor benefits? Let's delve into the nitty-gritty of how it all works.
Widow's Pension: Breakdown and Calculations
First off, there's a tax-free allowance of 1,038.05 euros in 2025 for a single person. This allowance is based on the current pension value per pension point (39.32 euros) multiplied by the factor 26.4. For widows with younger kids, the tax-free allowance gets boosted with child supplements (approx. 1,500 euros for two children).
Now, the next step is to determine the net income or pension that exceeds this tax-free allowance. For example, a monthly pension of 1,500 euros, minus the 1,038 euros allowance, leaves you with 462 euros. The German Pension Insurance then deducts 15 percent flat, giving us 69.30 euros. Hence, the widow's pension gets reduced by this amount since your net pension is higher than the tax-free allowance grants.
For those still working without a pension yet, the net income from their work is taken into account. Here, 40 percent is deducted flat, so for an income of 2,500 euros (minus 1,038 euros allowance), we get 1,462 euros. Of this, 584 euros are deducted, effectively reducing the widow's pension amount.
Defining Net Income
Calculating the net income involves considering all types of income, excluding the so-called "need-oriented benefits." These include disability pensions, unemployment benefits, and basic security. Additionally, benefits from state-funded pension schemes like Riester and Rürup pensions are not considered.
Income sources like monthly pension or income, rental and leasing income, capital income (e.g., savings interest or stock dividends), and self-employed individuals' expected annual income are then gathered. Gross amounts are determined first, and flat deductions are made based on the source:
- Employees: 40 percent flat
- Pensions: 15 percent flat
- Rental Income: 25 percent
The resulting values are then summed up to form the net income. The calculation process for the widow’s pension remains as described above.
Taxation: Pension and Widow's Pension
For taxation purposes, it doesn't matter whether you receive only a pension or a widow's pension as well. Both incomes are added together, and a basic allowance applies. For 2025, this basic allowance for pensioners is €12,084. This allowance is subtracted from your total income, effectively starting pension taxation from around €1,000 per month.
This means that new pensioners can receive a gross pension of around €16,240 per year (or €1,323 per month) without paying any taxes initially, as the taxable portion of the pension was already at 83% in 2024 (meaning €13,481 out of €16,240 is taxable). Additionally, pensioners can initially deduct special expenses and provision expenses, as well as claim extraordinary burdens, which are done via the annual tax return. This reduces their income, leaving only the €12,084 of taxable income.
However, the taxable portion of the pension varies year by year, starting at 50% in 2005 and gradually increasing to 100% by 2040.
- Pension
- Spouse
- Retirement
- In the context of personal-finance, it's important to understand the types of income that contribute to the calculation of a widow's net income, including pensions, survivor benefits, and other sources such as rental income and capital income.
- Nadine Oberhuber's article explains that the tax-free allowance for a single person in 2025 is 1,038.05 euros, based on the current pension value per pension point.
- Vocational training programs can be beneficial for widows who are still working and have not yet received their pension, as they can potentially reduce the widow's pension amount that is subject to deduction.
- Community policy should consider the meaning of survivor benefits and the impact they have on a widow's overall financial situation, especially in relation to her personal-finance and retirement planning.
