Benefits from German Pension Insurance - Transitional allowance

Determining the calculation basis and requirements for entitlement to transitional allowance

Transitional allowance is a payment in lieu of remuneration and is paid to cover living expenses during a rehabilitation programme.

Insured persons who receive from the statutory pension insurance:

• a benefit for participation in working life (occupational rehabilitation),
• a benefit for medical rehabilitation,
• a benefit for prevention or
• another benefit for participation

and do not receive continued remuneration from their employer may be entitled to a transitional allowance. This is the case if you were earning wages immediately before the start of the programme and have paid pension insurance contributions. The transitional allowance is then calculated on this basis.

If you are self-employed, you must have earned income from work immediately before the start of the programme. In addition, pension insurance contributions must have been paid in the calendar year prior to the start of the programme. The transitional allowance is calculated on the basis of these contributions.

If there is an entitlement to continued payment of remuneration, this must be utilised.

If unemployment benefit, sickness benefit or injury benefit was received immediately before the start of the programme, an entitlement may arise if pension insurance contributions have been paid from the remuneration/income on which the benefit is based. The transitional allowance is then calculated on the basis of the social benefits received.

Special conditions apply if you receive unemployment benefit II. Please seek advice from Deutsche Rentenversicherung.

Amount of the transitional allowance

The transitional allowance is calculated on the basis of:

• 68 per cent or
• 75 per cent if there is a child/stepchild who is entitled to child benefit or if the insured person is being cared for by a spouse or partner and is therefore unable to work,

is granted.

If unemployment benefit I is received, transitional allowance can be granted in the amount of this benefit.

Social insurance contributions from transitional allowance payments are paid in full by the pension insurance fund; only if there is no proof of parental status is the supplementary contribution for social care insurance deducted from the transitional allowance.

If proof of parental status is provided within three months of the transitional allowance notice being issued, the transitional allowance will be recalculated retroactively, otherwise the recalculation can only take place after the month in which proof of parental status is provided.

Gradual reintegration

If you have received medical rehabilitation benefits from the statutory pension insurance scheme, it is possible, under certain conditions, to gradually reintegrate into your previous job. Working hours are gradually increased until full capacity is regained.

If you were previously entitled to transitional allowance, you are generally also entitled to it during the gradual reintegration.

Duration of the transitional allowance payment

The transitional allowance is paid during participation in the programme. Under certain conditions, it is also paid between two measures (interim transitional allowance) or following a benefit for participation in working life (follow-up transitional allowance with lower percentages) for a maximum of three months.

In the case of benefits for participation in working life, the transitional allowance can continue to be paid for a maximum of 42 days in the event of an interruption due to illness if the benefit can probably be continued.

Special feature for participation in a benefit for participation in working life

In special cases, the calculation basis for the transitional allowance for benefits for participation in working life is determined on the basis of a fictitious salary if an orientation towards the actual income situation of the insured person before the start of the benefit would lead to an inappropriate amount of the transitional allowance. An information sheet on this can be found in the application documents.