Reporting foreign pensions to the Krankenkasse: How expats and retirees can avoid the costly German contribution trap

It does not matter whether the retirement income was earned in Germany or abroad. Even if taxes or social contributions have already been deducted in the country of origin, the pension remains subject to contributions in Germany as long as the beneficiary is covered by the German statutory health insurance system.

The legal framework is clear: when calculating insurance contributions, foreign statutory pensions are treated exactly the same as German pensions. This applies equally to German nationals returning with foreign pension rights and international specialists who draw a state pension from their home country while subject to the German insurance system.

The conversion of foreign currencies into Euros follows strict social security regulations (specifically under Section 17a of the German Social Code, Book IV, or based on applicable EU regulations). The sole prerequisite for contribution liability is that the foreign benefit must be comparable to a German statutory pension. This criterion applies to the vast majority of state social security pensions.

In many countries, the statutory retirement age is lower than in Germany. If insured individuals already receive a foreign pension, whether parallel to an active salary in Germany or during retirement, a mandatory contribution liability exists from day one.

Since there is generally no automatic data exchange between foreign pension authorities and German health insurance providers, the receipt of a foreign statutory pension must be reported to the provider without delay.

Employees are also required to inform their German employer that they receive additional contribution-liable income alongside their salary. However, they are not obligated to disclose the exact nature or amount of this income to their employer. Retirees who are no longer employed must manage this declaration directly and independently with their provider. The health insurance providers are not notified automatically.

While the German Pension Insurance (Deutsche Rentenversicherung) covers half of the health insurance contributions for a domestic pension, the rules for foreign pensions differ fundamentally.

Although German law only applies half of the general contribution rate and half of the supplementary contribution rate to foreign statutory pensions, the foreign pension authority does not pay an employer share. Therefore, the insured individual must bear this entire financial burden alone. In addition, the contribution to long-term care insurance (Pflegeversicherung) must be paid in full by the recipient.