In partial retirement, you can reduce your working hours by 40 to 60 percent. You will receive remuneration from your employer for the reduced working hours and additional wage compensation in the amount of 50 percent of the difference between the previous salary and the remuneration corresponding to the reduced working hours. Your employer will receive a large part of this wage compensation back as funding from the Public Employment Service (AMS). Your employer will continue to pay the social security contributions for health, pension and unemployment insurance at the previous level (up to the applicable maximum contribution basis).
As an older employee, you can reduce your working hours before retirement with partial retirement. The term of your partial retirement is a maximum of five years and creates a smooth transition to retirement. You will not lose any pension or unemployment entitlements or health insurance claims. Your employer must agree to the partial retirement.
In the first section of the calculation period, you will continue to work full-time, but you will be released from work in the second section of partial retirement (leisure phase).
In the case of block models, a replacement worker must be hired again at the latest at the beginning of your free time phase. A substitute worker is a person who was previously unemployed and is now hired above the marginal income threshold or an apprentice.
ATTENTION: The block model will be phased out gradually by 01.01.2029.
The subsidised cost reimbursement will be reduced from 50% to:
- 42.5% if partial retirement block time agreement begins as of 01.01.2024
- 35 % at the start of partial retirement from 01.01.2025
- 27.5% if partial retirement starts from 01.01.2026
- 20 % for the start of partial retirement from 01.01.2027
- 10 % if partial retirement starts from 01.01.2028
For partial retirement starting from 01.01.2029 , the subsidised reimbursement of costs will be waived in its entirety.
ATTENTION: There is also the possibility to work once more and once less as needed. It is crucial that the reduction in working hours once agreed upon is adhered to over the entire calculation period.
Partial retirement can be started at the earliest 5 years before the standard retirement age .
- In the last 25 years, you must have been employed for at least 15 years subject to unemployment insurance .
- Your level of employment in the last year before the start of partial retirement may not be more than 40 percent below the statutory or collective agreement working hours. For a 40-hour week, this is 24 hours, for 38.5 hours this is 23.1 hours per week.
- The prerequisite is the agreement to reduce working hours to 40 to 60 percent of normal working hours. In addition, for funding from the AMS, it must be agreed that your employer will reimburse you a wage compensation of half of the loss of earnings.
In principle, yes. However, a dismissal that is pronounced because of an intended or actually used reduction in normal working hours can be challenged in court as a dismissal based on motive . In addition, the challenge to the dismissal would also have to be examined with regard to anti-social action.
No. Severance pay is calculated on the basis of the working hours before the reduction in normal working hours.
Partial retirement must be agreed in writing with the employer or approved by the employer. This means that partial retirement can also be refused. Only your employer has a legal claim against the AMS for the promotion of the partial retirement allowance, provided that he or she meets certain conditions.
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