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This is really how your state pension works

June 06, 2024
Amount of the AOW

Everyone who lives in the Netherlands is entitled to the basic pension. Yet there is often uncertainty surrounding the General Old Age Pension Act: how high is the benefit, do you pay tax on it and what is the official state pension age? To clear up all doubts once and for all, we will answer a few statements. What is correct, not correct or perhaps somewhat correct? We will explain this to you in detail.

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The amount of the AOW depends on your situation

How much AOW you receive depends, among other things, on your living situation. For example, the Social Insurance Bank (SVB) – the organization that pays out the amount – checks whether you live together or alone. If your situation changes, this may have consequences for the amount of your AOW.

You do not always receive the full AOW amount

Sometimes you don't get the full amount. For example, if you have lived or worked outside the Netherlands for part of your life, you will receive a lower AOW amount. In such a case you can sometimes receive a supplement on top of your AOW: this supplementary income provision for the elderly (AIO) supplements your income up to the social minimum.

Millions of people receive an AOW benefit

That's right: according to Statistics Netherlands, more than 2023 million people received an AOW benefit in March 3,5.

You can earn unlimited extra in addition to your AOW

That's right: extra income in addition to your AOW has no consequences for the amount of your benefit. Read more about this in our blog earn extra during your retirement.

You do not have to pay tax on your AOW

That is not the case. The SVB pays out your AOW every month, and withholds wage tax and national insurance contributions from this. This is lower than for wages from work. Exactly how much tax you have to pay depends on your total gross income.

The state pension age is 65 years

This was indeed the case until 2013, but since then the state pension age has been linked to life expectancy and can be increased every year. This means it depends on your date of birth. In 2024, the state pension age will be 67. You can find it on the government website what your state pension age is.

If you receive AOW, you will also receive your pension

There may be a difference between the state pension age and the so-called target retirement age in your pension scheme. Whether you will receive a pension depends on whether you have accrued this – you can check this at mijnpensioenoverzicht.nl.

You will not receive state pension for the years that you have lived abroad

If you live abroad, work there and are subject to foreign tax law, you will not accrue state pension. For every year that you are not insured, you accrue 2 percent less AOW. Sometimes you can take out additional insurance if you are going to live abroad. If you live abroad, work in the Netherlands and fall under Dutch tax law, you will accrue state pension rights. Look up for this the website of the Social Insurance Bank of the website of the national government.

If you receive AOW, you can no longer continue to work for your current employer

Whether you can continue working after your state pension age depends on the agreements in your collective labor agreement or employment contract. Sometimes it is possible to keep working. In some situations, your employer determines whether you may continue to work if your employment contract ends by operation of law at state pension age. Usually, after your AOW date, you no longer accrue pension if you continue to work.

Learn more!

Find out more about the ins and outs of your state pension. Our experts have selected a number of interesting links for you.

 

Do you have a question about your specific situation? You will find many answers the AOW page of the SVB.

Want to know more?

Do you have questions about the AOW or this article? Or do you want to know more precisely what your pension situation looks like, and could you use the help of our pension experts? Feel free to contact us. Our Service Center is available every working day from 8.30 am to 17.00 pm via sc@unie.nl en 0345 851 963.

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