Why you as a woman should insist on pension splitting for children togetheradmin
Pension splitting is a good way of balancing out one parent’s childcare times during retirement and increasing that person’s pension. But many couples have never heard of it. We spoke to the SVS and asked for all the important facts for you.
It is no secret that women are more likely to be poor in old age and receive lower pensions than men. On the one hand, this has to do with the fact that they often earn less well, but it is also due to the fact that women look after the children more often and pay less or nothing into the pension account during this time. Pension splitting is a good way to compensate for this imbalance, but it must be applied for separately. We spoke to the SVS and have all the information.
What exactly is pension splitting?
Parents can agree on voluntary pension splitting for years in which one parent mainly looked after the child. A portion of the credits from the other parent ‘s pension account will be transferred , increasing the pension of the parent who took care of most of the child.
A pension account is maintained for people born in 1955 or later. A credit is posted to the account for each year that pension insurance periods are earned. There are credits for contribution bases from gainful employment, but also for the period of military service, raising children or for periods of unemployment, among other things. The pension is then calculated from the total credit at the start of the pension.
What advantages does pension splitting offer couples?
If a parent reduces or even interrupts their gainful employment to look after their child, they suffer pension disadvantages. Because during this time the credits on his pension account will be lower or completely eliminated. Child-rearing periods are credited for the first four years, but these cannot always compensate for the loss. Splitting offers parents the opportunity to redistribute the credits between their accounts and thus distribute them more fairly and partially offset the disadvantages .
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What are the requirements for pension splitting?
The parent wishing to transfer credits must apply to their pension fund for splitting . The pension insurance institution from which he*she would receive the pension is responsible. Pension splitting must be applied for by the child’s 10th birthday . If a second or third child is born, the deadline runs until the 10th birthday of the youngest child.
Both parents must agree to the transfer and sign a joint agreement . You must determine which years you want to split and how much you want to carry over in those years.
The amount of the transfer is limited for both the transferring and the adopting parent. The transferring parent may transfer no more than 50% of their credits in a calendar year.
The splitting is final . If a year has been split and the decision has become final, it can no longer be revoked.
In which family constellation does pension splitting make sense?
Splitting is an option for all parents , regardless of marital status. The benefits that can be achieved with splitting are the same for married or spousal couples as they are for unmarried or spousal couples.
Can parents who live separately claim pension splitting?
Yes, parents who are separated can also agree on splitting.
Up to what age will the children then share the pension?
You can split from the calendar year in which the child is born to the calendar year in which the child turns seven . If a second or third child is born in the meantime, you can split up to the year in which the youngest child turns seven. However, a maximum of 14 years can be split in total. The credit is always split for the whole year; also for the time before birth and after the seventh birthday.
Incidentally, you can also split for stepchildren, adopted children and foster children . The splitting does not start with the year of birth, but with the marriage/partnership, the adoption or the assumption of care.
Can you only apply for this if one parent is completely at home or also if the parent is part-time?
You can also split if the parent who mainly looks after the child is self-employed not only part-time, but also full-time. It is not necessary for a parent to stay at home all the time.
Why do n’t many couples do pension splitting? What is holding her back?
For many young people, retirement is still a long way off, which is why they hardly think about it. This also applies to parents. In addition, the application period for pension splitting is limited and many people are not yet aware of the offer.
It is important from a young age to pay attention to future old-age security and to make provisions accordingly . For some, pension splitting seems even more complicated than it actually is – which quickly changes when you take a closer look and do a little work with the pension account.
What do you have to do to ensure that the pension is shared? How does the procedure work?
You report to the relevant pension insurance agency. Information and forms for splitting can be found on the websites of the PV providers: svs.at , pv.at , bvaeb.at . You can also contact any of these pension insurance providers without further ado; Applications are forwarded to the responsible institution.
The PV carrier then checks whether the data is complete and carries out the splitting. For the self-employed, the income tax assessment for the split year must be available as the basis for calculating the credit to the pension account.
Does the splitting run automatically once it has been set up or does it have to be set up again every year?
You do not have to submit a separate application for each year. It is enough to agree once how much you want to transfer for which years. You can do this for all splitting years at once, even for future years in advance. The pension insurance company takes care of the rest. If something changes, the parents can adjust or withdraw the application for the future years that have not yet been split at any time.