# Calculate basic pension – that brings the minimum pension

## This is how you can calculate the basic pension

In order to calculate the basic pension surcharge, let’s first take a look at how the pension is calculated regularly (the following calculation examples are based on the contribution rates as of July 2022):

First of all we have to multiply the average pension points by the number of years of contributions. For example, assuming an average of 0.5 pension points per year and 35 years of contributions, the total factor is 17.5 pension points (0.5 pension points x 35 years). These 17.5 pension points are in turn multiplied by a specific pension value, which is constantly being adjusted and is different for the old and new federal states. As of July 2022, the pension value is EUR 36.02 in the old federal states and EUR 35.52 in the new federal states. If we assume a pensioner from the old federal states, we arrive at a gross pension of 630.35 euros (36.02 pension value x 17.5 pension points). About 11 percent of this is deducted from health and long-term care insurance – that is 69.34 euros – so that 561.01 euros remain.

Now it gets a bit more complicated when calculating the basic pension supplement. Again, we need the contribution years and the pension value. Instead of the average pension points actually earned, the difference between these pension points and 0.8 is now added. The value of 0.8 is simply a statutory cap that cannot be exceeded by the sum of actual pension points plus the supplement. So if we take the 0.5 pension point average from just now, that subtracts that from the 0.8 cap amount, giving us a value of 0.3. A factor of 12.5 percent or 0.875 is still missing to calculate the surcharge. This is also a purely legal requirement, the so-called “distance requirement”. This is to ensure that people who have paid less into the pension insurance scheme do not get as much from the surcharge as those who have paid more.

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