Why is the BU so important?
Disability insurance (BI insurance) is important for almost everyone. It pays a pension if the insured person is no longer able to work for health reasons. However, disability insurance is expensive for some professions and not everyone can afford it.
Is a BU really necessary?
In principle, Fürstenwerth considers occupational disability insurance to be necessary for every employed person. Because if a person can no longer do their usual work due to an accident or illness, their secure income is lost.
How long is the disability pension paid?
The payment of the disability pension ends at the latest when the policyholder has reached the expiry date agreed in the insurance policy. In most cases, this is when you reach retirement age, i.e. 65.
Will disability insurance be paid out after it expires?
No, there is no payment for disability insurance. If you would like an insurance model with payment at the end of the term, we recommend that you take out endowment insurance or annuity insurance.
Is a disability pension taxable?
In principle, you only have to pay tax on the so-called income portion of a private disability pension, and that is often below the tax-free basic allowance.
How is a BU pension taxed?
A BU pension benefit from a Rürup BU is taxed according to the cohort principle (2020 corresponds to 80%, gradually increasing). The income share is determined depending on the year of entry, from 2040 100% of the BU pension benefit is taxable.
What deductions for BU pension?
Half of the full health insurance contribution and the full nursing care insurance contribution are deducted. The other half of the health insurance contribution is paid by the statutory pension insurance. No contributions are due on the BU pension and the pension from the trade association or injury pension.
Is a disability pension taxable?
A temporary disability pension (EU pension) from the statutory pension insurance is a so-called life annuity, which is subject to income tax at a rate of 50% if the pension begins before 2005. Taxation of the income share is out of the question.
Is the full disability pension taxed?
In the past, the disability pension was only taxed on its income portion. However, since the Retirement Income Act (AltEinkG), pensions are taxed subsequently if they exceed the statutory basic allowance (§ 32a EStG). The percentage of the pension that is taxable depends on when you retire.
How high is the tax on disability pension?
The tax rate that is set when you enter the disability pension remains in place. This means that a person who has to pay tax on 60% of their income at the beginning of the reduction in earning capacity will always remain taxed at 60% in the future.
Where do I enter the disability pension in the tax return?
Enter the beginning of the pension in line 43. Please enter the annual pension amount of a disability pension in line 45 and the beginning of this pension in line 46. Don’t forget to enter on line 47 when the pension is expected to end.
How does a full disability pension affect the old-age pension?
If an insured person first draws a disability pension and then switches to an old-age pension, it is possible that the old-age pension will be higher than before. According to the Deutsche Rentenversicherung, the crediting period of the disability pension can be recognized as a crediting period for the old-age pension.
How much is deducted from the disability pension?
In the case of reduced earning capacity, however, contributions for health and long-term care insurance are incurred, which are then deducted from this amount. As a rule, this is about 10% of the pension. An example calculation: Ms. Müller’s pension information gives a full disability pension of €946.20.
Will the full disability pension be increased?
Yes, the pension increase on July 1, 2019 includes all statutory pensions from the German pension insurance. In addition to the standard old-age pension, this also includes disability pensions as well as widow’s and widower’s pensions, orphan’s pensions and half-orphan’s pensions.
How long will the pension be paid due to a full reduction in earning capacity?
Pensions due to reduced earning capacity are only paid on a temporary basis. The time limit is generally for a maximum of 3 years after the start of the pension. The limitation can be repeated up to a total of 9 years (§ 102 Para. 2 SGB VI).
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