There’s an old law from 1913 that will interest you if you’re a freelance teacher in Germany. It’s from §2 of Book 6 of the German Social Code, it covers the Statutory Pension System in Germany, and it goes a little something like this:
Versicherungspflichtig sind selbständig tätige:
- 1. Lehrer und Erzieher, die im Zusammenhang mit ihrer selbständigen Tätigkeit regelmäßig keinen versicherungspflichtigen Arbeitnehmer beschäftigen,
Obligated to pay into the statutory pension insurance are self-employed
- Teachers and educators that do not regularly employ persons subject to mandatory insurance requirements in association with their self-employed work activities,
This law also obligates midwives, fishermen and a few other professions to do the same. No-one really knew much about it until it was suddenly revived in around 2000, and freelance teachers across Germany were getting payment requests left right and centre, some of them backdated for up to 4 years.
It’s a bizarre topic that crops up every now and then and causes waves of panic among the freelance teaching community in Germany, and for very good reason. Freelance teachers sometimes have to survive on a quarter of the wage that might be afforded to their employed colleagues, and they fork out 100% of their health insurance, which can be costly enough. To also part with an additional 19% of a freelance teaching income per month for the pension can be the decider between profit and loss at the end of the month.
To add insult to injury, most freelance professions are exempt from mandatory payment requirements – they’re optional in the statutory system, and they can choose a private plan if they prefer.
What kind of teachers have to pay into the statutory pension insurance?
All of them, if they are primarily self-employed and they make a profit of more than 450 Euros per month or 5,000 Euros per year from teaching. Yoga teachers, golf teachers, English teachers, Spanish teachers, German teachers, fencing teachers, dance teachers. If you’re a teacher, you’re self-employed and you make more than 5,000 Euros a year as a teacher, you are probably covered under this law.
How do they find me?
The German state pension system doesn’t seem to be actively sending out reminders to random teachers, and there is surprisingly little outrage on the internet about this topic since around 2011. If you don’t make contact with the DRV (Deutsche Rentenversicherung) then they probably don’t know you’re around, unless someone rats on you. If you make contact with them for any other reason, that might put you on their radar. Or they might audit a particular education institution that happens to be one of your clients.
If you’re a non-EU citizen with a freelance permit and you get a case worker who is particularly on the ball about this law, they *could* bring this up at your renewal appointment and ask you to provide proof of payment into the statutory pension fund before they renew your permit. I’ve only ever heard of this happening once in five years, and it wasn’t in Berlin. If it does happen and you haven’t been paying your pension payments, you’re in a sticky situation. Let’s hope that never happens!
What do I do if they find me?
Contact a lawyer that specialises in Sozialrecht. There are some cases of exemption due to hardship, or they might be able to negotiate the amount that you pay in.
Alternatively, you can hire someone and pay them more than 450 Euros a month so that you’re paying their social contributions. The law says you are only obligated to pay into the pension if you do not regularly employ someone who is subject to mandatory social contributions in association with your work activities.
Will I ever see the money I contribute?
If you stick around in Germany for five years, you’re entitled to a pension in Germany. If not and you leave the country earlier, you might be able to get it partially transferred into another country’s pension scheme. The details of how this works and how much you actually get back are a bit hazy and depend on a lot of factors, so contact a lawyer or the DRV directly to find out more about your specific situation.
As always, if you need help communicating in German, writing letters or making phone calls, get in touch!