MrJohn
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MrJohn
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Joined: March 1st, 2010, 9:32 pm

March 1st, 2010, 9:32 pm #11

Hi John,I hope you're still around to answer some questions.  


I've been in Germany for 5 years now and officially working here as a freelance teacher since 2007.   I have to get my visa extended next week.  I'm sure the foreign office will want to offer me a permanent visa, which requires a confirmation of having made pension contributions as I understand it.  To make matters more complicated, I have a job interview this Thursday and the company wants to give me the choice between a full-time employee contract or freelance contract.  


I'm one of those who heard about this pension law through the grapevine.  I just do what the foreign office, tax office, and my tax advisor tell me to do.  I refuse to do more than that.  None of them mentioned signing up at a pension office.  I'm philosophically opposed to the very idea cause I strongly believe the money won't be there for my generation anyway.


I just want to stay in Germany a couple years longer and avoid the possibility of getting myself into years of debt to the German government.  


So my questions are:
Should I say no to the permanent visa?  
Should I say no to the employee contract?
If I say yes to the contract, would the DVB then discover I haven't paid at all, or would I be buying myself more time?
I would love to have some security that comes with a contract, but I fear that the debt would defeat the whole purpose of being here longer.  
Also, if I were found out and had to start paying off this "debt", would that follow me outside of Germany?


I hope you're still there to respond, I have some critical decisions to make in the next couple days.  
Thanks,
MrJohn
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john
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john
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Joined: September 8th, 2001, 10:12 pm

March 4th, 2010, 9:49 pm #12

In the worst case, you may have to pay pension contributions for the period 2007 till now, but... please read on.
The permanent visa could pose a problem, but there again so could a temporary visa because the authorities may want to see that you are paying social insurance and pension contributions, however, the DRV and the people who dish out visa/work permits don't work hand in hand, so if you can show you have a permanent job lined up, your Kreisverwaltungsamt probably won't bother about whether you have already been paying in... and probably won't know that you should have been.
Accepting the salaried position shouldn't cause you any problems on the pension front, the DRV will be happy to see you are now paying in and I've never heard of them asking anyone why they hadn't been paying in prior to that.
The longer you pay into the DRV, the less likely they are to discover you should have paid contributions... and once you get past 2015, you won't have to pay any back payment contributions because the statute of limitations on pension back payments is five years.
If you leave Germany before you have paid more than 60 monthly pension contributions, i.e. have worked here less than five years (and aren't an EU citizen), you should be able to claim your pension contributions back... but, you're not a straightforward case, Mr John.
I hope those comments help, but I'd talk to your accountant or a social insurance lawyer if you still aren't sure about what to do.
They may cost a bit, but in this case, they could save you a lot of money and hassle.
Good luck!

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float
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float
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Joined: June 11th, 2010, 2:38 am

June 11th, 2010, 2:37 am #13

Hi Everyone,

I got extend my visa in a couple of months. I have been asked by the visa office to present, among others, pension payment papers. I have been teaching for last 14 months but at times have stayed under €400. I plan to sort out my tax papers for 2009 and then contact DRV.

The questions are

1. Do I fall under "existenz grunder" catagory or "berufs einstiger" , and therfore can I be exempt from paying the bitter 19.5% ?

2. If not, are there other ways to avoid swallowing that bitter pill atleast for one more year?

3 should I expect to receive some deductions as a starter earning relatively low, say 700?

4. Will I be asked for backpayments ? how high could they be, and will there be interest payments?



Any information will be highly appreciated.



Thanks!
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JeremyLPorteous
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JeremyLPorteous
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Joined: June 11th, 2010, 10:50 am

June 11th, 2010, 10:50 am #14

Hi John,
I came across your, website and subsequent forum while looking for information on ESL school in Germany a couple of months back. Firstly would like to thank you for the wealth of information that is provided on this forum.
Secondly, I am an Australian looking to apply for a TESOL teacher job in Germany and I am aware that most schools will initially only offer freelance contracts, which brings me to a couple of questions if I may.
After reading through the forums on the compulsory pensions (head is still spinning)  
1. Once I am able to secure a contract is it wise to approach the DRV and register
2. It is good policy regardless of paying in to the pension (if able) if under the limit required for payment
3. In doing due diligence, I have read that having private health insurance negates the requirement to pay into the DRV is this the case? (in reading the archived forum -Freelance English Teachers Hit By Pension Levy, this was allowed? sorry that is how I read it)
4. Do freelancer have to (apart from the obvious reason of making more money) have to find multiple contracts due to the 5/6 rule?
5. What is your opinion on getting private students and being paid under the table.
I am just completing my TESOL certification (equliv level 4) and working my way through a Bachelor of Education, I am heading to Germany (the Mannheim area) in the coming months for both work and personal reasons, and any assistance or further information in the ESL arena is greatly appreciated.
Regards
Jeremy
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float
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float
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Joined: June 11th, 2010, 2:38 am

June 11th, 2010, 11:39 am #15

Hi everyone,
Typo on my last post. I wanted to say I "got to extend my visa".
Thanks in advance.
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john
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john
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Joined: September 8th, 2001, 10:12 pm

June 11th, 2010, 3:06 pm #16

Float, you will be asked to pay back payments to the DRV from the time your income after expenses went above €400 a month. It's difficult to say how the DRV calculates that though.



You could opt to pay 50% of the maximum contributions, but it doesn't sound as if that would make much sense because that would probably work out to be a lot more expensive than paying 19.9% based on what you actually earned.



Re. interest rates, the DRV won't ask you for interest on the back payments.



You ought to talk to a social insurance lawyer because if your income has been hovering around €400 a month, you might be able to argue that you are a Härtefall (or would suffer financial hardship if you had to pay back payment).

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john
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john
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Joined: September 8th, 2001, 10:12 pm

June 11th, 2010, 3:41 pm #17

Hi Jeremy
See comments in blue.
After reading through the forums on the compulsory pensions (head is
still spinning)  
1. Once I am able to secure a contract is it wise
to approach the DRV and register
Yes, it's best to get this sorted out because paying back up to five years contributions isn't easy and the longer you don't pay in the more worried you are likely to be about being caught.
2. It is good policy regardless
of paying in to the pension (if able) if under the limit required for
payment
If you are below the required limit (currently €400), you don't need to pay in - and I wouldn't.
3. In doing due diligence, I have read that having
private health insurance negates the requirement to pay into the DRV is
this the case? (in reading the archived forum -Freelance English
Teachers Hit By Pension Levy, this was allowed? sorry that is how I read
it)
No, that is not the case. Payments to the DRV are compulsory and are not connected in any way to private health insurance schemes.
4. Do freelancer have to (apart from the obvious reason of
making more money) have to find multiple contracts due to the 5/6 rule?
No, the 5/6th rule does not apply to freelance teachers (it applies to most freelancers, but freelance teachers are covered by a much older social insurance dating back to the beginning of the 20th century. Saying that though, some schools and employers don't always know that.
5.
What is your opinion on getting private students and being paid under
the table.
I'm sure lots of EFL teachers do it, but don't forget that if you fall out with one of those private students and they blow the whistle on you, you could get a hefty fine... and you might find that your work permit isn't renewed.
I am just completing my TESOL certification (equliv
level 4) and working my way through a Bachelor of Education, I am
heading to Germany (the Mannheim area) in the coming months for both
work and personal reasons, and any assistance or further information in
the ESL arena is greatly appreciated.

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JeremyLPorteous
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JeremyLPorteous
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Joined: June 11th, 2010, 10:50 am

June 12th, 2010, 4:13 am #18

Hi John,
Thank you for your prompt reply to my questions.
Although I have been doing a lot of research into what is required and finding a lot of conflicting information across the various searches, it is always good to get real-time information from the people on the ground i.e. the 5/6 rule.
Just a couple of more questions... for now...   likely the wrong forum for this, I do apologise if it is.
1. With the changes to the immigration rule for non EU/EEA citizens, how would this affect my chances of getting a freelance contract and subsequently a work visa? Personally I don’t have 1 million just sitting around, nor will I be in a position to employ 10 people, etc.

I will have financial support coming from Australia and an reasonable amount in savings once I arrive in Germany, do you think this will add some grease to the wheels of the red tape brigades as I will have proof I am able to support myself for a reasonable amount of time?
2. With registering, I am initially going for a holiday (with intent) do I have to register as I will be staying with my Freundin? or only once I secure a contract if not prior to leaving Australia?



3. What is the reputation of Berlitz or Inlingua, in Germany? As I am a newbie to the world of ESL I am looking to apply for work at one of the franchise schools in the Mannheim/Ludwigshafen/Heidelberg region (yes I can see some of you shake your head about Berlitz) as I see it as a way to get time up and then move on to bigger and better things.


 The only other options, if unable to secure a work/resident visa, I have would be look for ESL work in a non EU/EEA country; too ask for my German girlfriends hand in marraige and neither one of us is in a rush at this moment in time; or to incur the wrath of her mother and sister and convince her to move back to Australia.

Thanks in advance to anyone that can provide me any information regarding this.
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JeremyLPorteous
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JeremyLPorteous
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Joined: June 11th, 2010, 10:50 am

June 12th, 2010, 12:31 pm #19

Hi John,
Me yet again..
I was just surf the Berlitz site and came across this information which after reading the information on here from yourself and others working in Germany just adds to confusion.
"As a freelance instructor you are responsible for your own income taxes at the end of the year as well as your own social benefits and medical coverage. The German government also requires that freelance employees pay into the national pension plan if they stay in Germany for more than two years."
"If you are an American, Canadian or other non-EU citizen, you need to have a permit to reside, and ultimately work in Germany. You can enter Germany with a three-month tourist visa and receive a restricted residency permit. At that time you can apply for a position and, if accepted, begin the process of obtaining permission to work as a freelance instructor. In most cases the visa applications are approved. The fee for obtaining a visa with permission to work as a free-lance instructor is about $40. Although you may begin working once you have received your residence permit, you will need to go to the tax office (Finanzamt) in your city to get a tax number. By German law, a tax number is required in order to compensate free-lance employees."
I haven't yet contact Berlitz to confirm how recent the information on the site is, but the link is http://careers.berlitz.com/Europe/de/be ... cCode=3#p1
Any comments on this?
Cheers
Jeremy
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float
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float
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Joined: June 11th, 2010, 2:38 am

June 14th, 2010, 12:15 pm #20

Hi John,

Thankyou for the reply. Couple of more questions;

1.How expensive would availing social insurance lawyer's service be? In my case, would that be more expensive than giving into DRV's back payment demands of 19:5%?

2. Someone recently told me it might be possible to get "befreiung von 10%" during the first three years of freelancing; If so, does that mean I can get away with paying half of 19.5%?



Thanks a lot again John.

Float
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