Getting a German pension refund after Brexit: A guide to the key changes

Some people who work in Germany for a short time before moving abroad are eligible to have their pension contributions refunded. As the rules are different for EU and non-EU citizens, Brexit has changed how this affects UK citizens and residents. Germany Pension Refund explains what has changed and how to check your eligibility. 

Brexit has had a significant impact on how citizens and residents of the UK can get their German pension refunds. Before Brexit, UK nationals had the same pension rights as other European Union citizens. However, since Brexit, the rules have changed, altering who can claim a refund and under what conditions.

If you are a UK citizen or a non-British UK resident, this guide will help you understand if you can get a refund from the German pension system. It will cover the latest changes, who can apply, and how to claim your pension money.

Understanding the German pension refund system

Germany has a compulsory pension system (Deutsche Rentenversicherung or DRV) where employed residents have to pay 9,3 percent of their gross salary to the German pension insurance. Those contributions are then used to finance ‌pension payments for people who are currently retired.

However, for those who leave Germany before reaching retirement age, there are specific conditions under which pension contributions may be refunded.

Who is eligible

Under German law, pension contributions can be refunded if:

• The person isn’t an EU citizen
• The individual has already left Germany and no longer works or lives in an EU country
• 24 months have passed since the person's last contribution

Not everything paid into the pension system can be refunded. Here's how pension refunds work:

• Only employee contributions are refunded - employer contributions are not included.
• Refunds are paid as a lump sum and may be subject to taxation in the country where you currently live.

Brexit's impact on pension refund eligibility

Now that UK citizens are no longer classed as EU nationals, the rules have changed for people who come from, or live in, the UK. However, there are some complications due to the fact that the Brexit withdrawal agreement upheld social security relations that were entered into before Brexit.

Essentially, this means that people who were considered EU citizens for the purposes of social security before the withdrawal date continue to be considered EU citizens when it comes to their pensions - meaning they are not eligible for a refund.

The key factors here are your nationality and exactly when and where you were making pension contributions before the end of the Brexit transition period on 01.01.2021, as follows:

Rules for UK citizens after Brexit

• UK citizens who were contributing to the German pension system before January 31, 2020, cannot claim a refund. 
• UK citizens who were contributing to the UK pension system (or any other EU pension system) before January 31, 2020, cannot claim a refund of their German pension contributions, even if they only started contributing to the German system after January 31, 2020. 
• UK citizens who only started contributing to a UK or EU pension after Brexit may now be eligible for a German pension refund. 

Rules for non-British UK residents

For non-British nationals who have left Germany and now live in the UK, the eligibility for a pension refund depends on their nationality and work history:

Non-contracting state nationals (nationals of countries without a pension agreement with Germany):

• If they did not work in the UK or EU (including Germany) before Brexit, they can claim a German pension refund.
• If they did work in the UK or EU (including Germany) before to Brexit, they cannot claim a refund and must wait until retirement age to receive pension payments, or they can claim a refund once they leave the EU/UK area.

Contracting state nationals (citizens of countries with a pension agreement with Germany, such as Australia or Canada):

• If they did not work the UK, EU (including Germany) or their home country before Brexit, they are eligible for a refund.
• If they worked in any of these countries prior to Brexit, they cannot claim a refund and must wait until retirement age for pension benefits or claim a refund after leaving the EU/UK area.

How to claim your German pension refund

The process to claim your German pension refund requires you to submit an application, with a host of supporting documents.

Required documents and application process

To claim your pension refund, you will need to present the following documents:

• Completed application form
• Copy of passport or other official identification
• Proof of deregistration from Germany
• Proof of residence outside Germany (such as a utility bill, tax statement or residence permit)
• German social security number (Rentenversicherungsnummer)
• Bank account details (for receiving the refund)

After you have all your documents ready, you can take the stress out of sending your application to DRV by using a third party to check and submit your application. They will check your documents carefully to make sure everything is correct and complete to avoid unnecessary delays. This way, you can be sure your application will be sent smoothly and without any errors!

The timeline for refund processing

The refund process follows this general timeline:

1. 24-month waiting period: Refunds can only be processed after two years have passed since the last pension payment in Germany.
2. Application submission: Ensure all documents are complete to avoid delays.
3. Review and approval: The DRV reviews applications, which can take several months.
4. Payout: Once approved, the refund is transferred within 10 working days.

How long it takes to process may change depending on how many applications DRV gets and how complex each case is.

Germany Pension Refund can help you submit your German pension refund application, reducing the amount of time it can take to receive your refund. To check your specific eligibility and potential refund amount, use their Germany pension refund calculator, or start your application here.