Care allowance in retirement – ​​does it count as income?

The money that those in need of care receive is a social benefit and is therefore not considered eligible income. This means that it does not count as pensioners’ income or additional earnings, which is why it is not taxable. It is also not counted towards unemployment benefit for citizens’ benefit recipients.

The same applies: If the person in need of care passes the money on to relatives or close friends who care for them, as recognition or compensation for expenses, so to speak, then these people do not have to pay tax on it or declare it as additional income.

It is different if the money goes to a nursing assistant who does not have a close connection to the person in need of care. In such cases, it is assumed that the person has a financial interest in the care and thereby generates income. In this case it is taxable.

If caring relatives are younger, then under certain conditions the time spent caring for them is considered a contribution period for pension insurance. The nursing care fund then pays contributions into the pension fund for them (albeit small ones). To do this, at least care level 2 must be achieved and the time required must be at least ten hours per week, for home care. The helper may then work a maximum of 30 hours per week. Depending on the level of care covered, relatives can increase their own pension entitlements.

People who have at least care level 2 and are cared for at home receive nursing care benefit from nursing insurance. Anyone who lives in a nursing home has no claim. The decisive factors for whether someone reaches care level 2 are, for example, how the person can look after themselves, how mobile they are and how well they can plan their own daily routine.

The pension is paid by the pension insurance company and its amount is determined by various factors.