Living allowance and pension - are both possible for pensioners?

An older woman sits outside smiling and holding the hand of a younger woman who looks at her caringly.

Many pensioners ask themselves: Can I receive a living allowance despite my pension? Good news: yes, living allowance and pension are not mutually exclusive. Especially for older people with a small pension, living allowance can provide considerable financial relief. After all, the cost of living also increases in retirement - especially rent, heating and energy costs. In this article, we explain how living allowances work, how the pension is included in the calculation and what needs to be taken into account when filling in the form.

Article in a nutshell

Living allowance possible despite pension - you may also be entitled to it in retirement.
The target group is primarily pensioners with a low income but without basic income support.
Pensions count - statutory, company and private; allowances are also taken into account.
Allowances & special regulations can increase living allowances.
Assets must not exceed certain limits (e.g. €60,000 for single persons).
Processing usually takes 2 to 8 weeks.

Frequently Asked Questions

What is living allowance & how does it work?

Living allowance is a state benefit that helps low-income households with their housing costs. It is granted as a rent subsidy for tenants or as an encumbrance allowance for owners - for example for a condominium or owner-occupied home. The aim is to ensure that no one loses their home or falls into financial hardship because their rent is too high. Living allowance is paid out monthly and does not have to be repaid. It is linked to certain conditions - in particular income and the amount of rent or charges as well as the place of residence.

Who is entitled to living allowance?

Living allowance is aimed at people who have an income but cannot sufficiently cover their housing costs. Those entitled include

Single tenants or owners
Couples and families with children
Pensioners

It does not matter whether you rent an apartment or whether the household members live in their own home. However, anyone who already receives other means-tested social benefits such as citizens' allowance, social assistance or basic old-age pension is excluded from living allowance. Household size, gross income and rental costs - as well as the so-called rent level of the place of residence - are decisive for eligibility. This is regularly adjusted by the Federal Statistical Office.

How is living allowance calculated?

The amount of living allowance is individual and depends on three central factors:

Number of household members
Total income of the household
Rent or charge, insofar as it is deemed appropriate

The higher the rent and the lower the income, the more living allowance can be paid. The rent levels, which vary from region to region, determine which maximum rent amounts are considered “reasonable”. Allowances and lump sums are also taken into account for the calculation.

Important: The minimum income must be reached - anyone earning less is usually referred to the social welfare office, unless there are exceptions.

How does my pension affect my entitlement to living allowance?

Your pension is a significant part of your income and is fully taken into account when calculating your living allowance. This means that the old-age pension, company pension or private supplementary pension are included in the calculation. However, living allowances may also be possible for small pensions - the decisive factor is whether your total income is below the relevant income limit. Other people living in the household and their income can also influence the entitlement.

For pensioners with a particularly low income, the so-called basic pension supplement plays a role, which is granted in addition to the basic pension. Just like the basic pension allowance, this is not always taken into account in the living allowance and can therefore secure or increase the living allowance entitlement.

Can I receive living allowance in addition to my pension?

Yes - as long as you are not receiving basic income support in old age or similar benefits, you can also receive a living allowance when you retire. Many retired people use this allowance to help them cope with rising rent and ancillary costs. Living allowances are particularly useful if you receive a small pension but housing costs are comparatively high - for example in conurbations. Here, the living allowance subsidy can make a real contribution to preventing poverty in old age.

How is the pension taken into account in the calculation?

When calculating living allowance, not only the statutory old-age pension counts, but also:

Occupational pensions
Disability pensions
private pension insurance
Widows' and orphans' pensions
Pensions from abroad

Certain amounts are deducted from the gross pension, e.g. lump-sum allowances for income-related expenses or allowances for care dependency. Contributions to health and long-term care insurance also reduce the qualifying income. This results in the so-called “income to be taken into account”, which is decisive for the amount of the living allowance.

How can pensioners apply for living allowance?

The living allowance form must be submitted to the relevant city or municipality. Many local authorities now also offer digital options. It is also possible to apply for living allowance via leistungslotse.com.

Important: The entitlement only applies from the month in which the living allowance is submitted - there is no retroactive living allowance. So the sooner you act, the better.

Calculate living allowance

How many members does your household have in total (including yourself)?

Info on household size

This includes besides yourself:

• Spouses, partners, or parents (including step-, foster-, or in-laws)
• Children (including foster and adopted children). If you care for a child at least 1/3 of the time, they count as a household member for you.
• Partners with whom you have lived together for at least 1 year or with a common child, or you share income/assets jointly
• Persons with whom you care for/nurse relatives

For deceased household members, the deceased person is not excluded for 12 months after the month of death, unless the dwelling was subsequently vacated, the number of household members subsequently returned to the original level, or the person would have been excluded from housing benefit due to receiving other social benefits.

How many are excluded from housing benefit because they already receive other benefits?

Info on excluded persons

This includes:

• Citizen's benefit (Bürgergeld) or benefits for trainees according to SGB II
• Basic security in old age or in case of reduced earning capacity
• Subsistence assistance (SGB XII)
• Transitional or injury allowance
• Benefits under the Asylum Seekers Benefits Act
• Child and youth welfare services (SGB VIII)

What requirements must pensioners fulfill?

The following conditions must be met for pensioners to receive a living allowance:

You live in rented or owner-occupied accommodation.
No social benefits with accommodation costs (e.g. basic income support in old age) are received.
The monthly income/pension is below the housing benefit limit.

The housing benefit authority will carry out a detailed check on the basis of the documents submitted.

How much is the living allowance for pensioners?

The amount of living allowance can vary greatly depending on income, rent and region. In 2024, the national average was around 370 euros per month. In cities with high rents, such as Munich, Cologne or Hamburg, significantly higher amounts are possible. The subsidy can cover up to 50 percent of housing costs. An online living allowance calculator provides an initial estimate and can help you check your potential entitlement.

What do pensioners need to consider when applying?

The following points should be observed to ensure smooth processing:

It is best to apply for living allowance before the end of the month
1. Submit all necessary documents in full.
2. Report any changes in income, rent or household members promptly.

Important: Living allowance is usually granted for 12 months - after that it must be reapplied for.

What income is taken into account for living allowance?

Income includes the following income:

Pensions (old-age pension, reduced earning capacity pension, company pension, widow's or orphan's pension)
Wages and salaries
Income from letting and leasing
Interest or dividends (e.g. capital gains)
Maintenance payments
Pensions from abroad
Care allowance (under certain conditions)

Child benefit or certain one-off payments, such as heating cost subsidies or coronavirus assistance, are not taken into account.

How is the monthly income calculated?

To determine the qualifying income, the gross annual income is calculated and divided by twelve. Certain allowances and lump sums - for example for income-related expenses or due to care or disability - are deducted from this. The result is the monthly qualifying income, which is used to calculate living allowance. Pensions are often the main source of income for pensioners.

Are there allowances for pensioners?

Yes, pensioners benefit from various allowances that can reduce the chargeable (annual) income:

Allowances for persons in need of care with severe disabilities
Allowances for maintenance obligations
For pensioners who have reached the basic pension period of 33 contribution years, there is an additional allowance of between 1,200 euros and 3,378 euros

The allowances significantly increase the chance of receiving a living allowance for pensioners.

How do assets affect the entitlement to living allowance?

Living allowance is basically an income-dependent benefit - not directly dependent on assets. Nevertheless, assets must not exceed a certain limit. For single people, this is around 60,000 euros, for each additional person in the household an additional 30,000 euros - i.e. a total of 90,000 euros for a two-person household, for example. If you exceed this limit, your entitlement may lapse. However, assets of a reasonable amount - for example for retirement provision - are generally not an obstacle.

What are the changes for living allowances in 2025?

Living allowances will also be reformed in 2025 to provide relief for even more households. The plans include:

Higher income limits so that more people are eligible
Adjustment of rent ceilings to the rise in housing costs
Expansion of the climate component, which is intended to cushion high heating costs

These changes are intended to ensure that the living allowance responds better to current living realities.

How will the rent level affect the living allowance?

The rent level determines which rental costs are considered reasonable in a city or municipality. The higher the rent level, the higher the rent can be - and the higher the amount of living allowance can be. In large cities with a tight housing market, this means that the chance of receiving more living allowance increases.

Where can I apply for living allowance for pensioners?

The living allowance application can be submitted to the local living allowance office - in person, by post or online. Many federal states offer central portals where you can submit the application from the comfort of your own home. Important: Any changes or further approvals must also be reported there.

How long does it take to process the application?

The processing time varies depending on the city or municipality. As a rule, it takes 2 to 8 weeks for everything to be checked and approved. If documents are missing, the processing time may be longer. You will receive the decision by post - including the amount of the living allowance and the approval period.

What documents are required for the application?

The following documents should be available:

Pension certificate (current)
Rental agreement or proof of monthly housing costs
Proof of additional income (e.g. interest, rental income)
Bank statements for the last few months
Identity card or passport
Proof of degree of care, severe disability or maintenance payments, if applicable

A complete submission facilitates processing and shortens the waiting time.

What happens if the pension increases?

If your pension is increased - e.g. by the statutory pension adjustment in July - your living allowance entitlement may change. You are obliged to notify the living allowance office of any change in income. In some cases, the living allowance may be reduced or even discontinued. On the other hand, it is also worth reporting if your pension decreases, housing costs increase or the number of household members increases - because the entitlement can then increase.

Conclusion: living allowance can be an important support for pensioners

It is also worth taking a look at possible entitlements when you retire - living allowances in particular offer noticeable financial relief for many pensioners. The decisive factor is whether the income is below the respective limit and no other social benefits are received. Those who meet the requirements can receive subsidies of several hundred euros a month with the living allowance. Particularly in view of rising rents and energy costs, it makes sense to check your entitlement regularly - for example with a living allowance calculator or directly at the housing benefit office. This leaves more money for the essentials in old age.