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Struggling pensioners forced back to work

Germany, as Europe's top economy, may be currently seen as the land of plenty but its senior citizens are increasingly being forced to take a part-time job in their twilight years just to make ends meet.

Struggling pensioners forced back to work
Photo:DPA

With more inhabitants over the age of 65 than any of its European partners, Germany’s senior citizens are having to resort to jobs such as animal- or babysitting or as a caretaker to top up their pensions.

Notices such as “Still spritely pensioner, in good physical and intellectual shape, seeks work paying at least €400 ($536) a month. Good knowledge of computers,” are common on specialist sites posting job adverts.

Such sites tend to have a column dedicated to pensioners listing so-called “mini-jobs” targeting those within the country’s 20-million-strong retired population in need of boosting their incomes.

“Two or three times a week I deliver newspapers,” 69-year-old Norbert Mack, who lives in Sindlingen, a western suburb in the city of Frankfurt, told AFP.

“Mostly they are free papers with advertising which arrive around midday, so you then need two or three hours to deliver a pile of 200 to 300 papers,” he said.

“I do my round in the area with a shopping trolley. After that, I’m tired and I need to nap for one or two hours at home,” said Mack, who used to be employed in industrial machine construction.

The job earns him about €180 every month which supplements his €1,500 pension which he and his ill wife live on.

“Our only little pleasures are an old car, a small allotment where we spend the holidays and of course, my dog,” said Mack, whose hobby is training German shepherd dogs.

“I could survive but not live”

Initially created in 2003 by the Social Democratic government of then chancellor Gerhard Schroeder to fight unemployment, these low-paid “mini-jobs”, which are taxed at lower rates, proved a hit among the over-65

year-olds.

And about 11 percent of people who hold down “mini-jobs” are in this age category, according to the central office which oversees this type of work.

“Pensioners regularly ask us for work,” Walter Ofer, who works for an association helping pensioners said, adding that as well as senior citizens who work to top up their pensions, many women also worked as cleaners off the books.

At 72, Gerda Hafermalz, who used to work in customer service, promotes Swiss cheeses in supermarkets around the eastern region of Erfurt.

“Of course, it was imperative for me to find this work. Either I sat crying over my fate or I took my destiny in my hands,” said the divorcee who describes herself as “tough”.

“My pension gives me €880 a month and there’s €375 of it that goes on my rent. Without the money my job gives me I could survive but not live,” she said.

Germany has seen the number of pensioners taking jobs to top up their income increase by more than 58 percent between 2000 and 2010, according to the German labour ministry in response to a question by a member of the far-left Linke Party.

In 2000, their number was about 417,000, rising to 661,000 in 2010.

According to Eurostat, Germany has the most inhabitants over the age of 65 in Europe, with 20.6 percent of its population.

The retirement age is due to gradually go up from 65 to 67 years following a reform approved in 2007.

AFP/jcw

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WORKING IN GERMANY

7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

7 tips for how to survive as a freelancer in Germany

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network. 

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