Factsheet for measure
DE-2023-1/3044
–
Updated
– measures in Germany
Increased monthly allowance for families with children
Höheres Kindergeld und weitere Verbesserungen für Kinder
Background information
The high inflation caused by the war in Ukraine had lead to enormous price increases for heating, hot water and electricity. The German government issued a relief package on 3 September 2022 worth €65 billion. The package increases the amount of money designated for child benefits and provides a supplement for children, adolescents, and young adults impacted by poverty. The measures were passed with the Inflation Compensation Act of 20 September 2022.
Content of measure
Since 1 July 2022, children, adolescents and young adults who grow up in families with little or no income receive an immediate monthly supplement of €20.
Child benefit increased to €250 per month per child on 1 January 2023. Prior to this change, the first and second child each received €219, the third child received €225 and each additional child received €250. A family with two children now receives €744 more per year. A family with three children now receives €1,044 more per year. This is especially important for families with low household incomes as the cost of living continues to rise.
The increase in child benefit leads to additional expenditure of up to €16 million per year for child benefit under the Federal Child Benefit Act (BKGG).
The
Child bonus 2022 to cushion pressures on families from rising energy prices
and the
Child benefit top-up
are measures closely related to this one.
Updates
The following updates to this measure have been made after it came into effect.
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01 January 2025
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From 1 January 2025, child benefit will increase by €5 to €255 per month per child. In addition, the immediate child allowance for particularly needy children will increase from €20 to €25 per month.
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01 April 2024
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The income limit for parental allowance has been changed. For births from 1 April 2024, the limit of taxable annual income (income limit), above which the entitlement to parental allowance ceases, will be reduced from €300,000 to €200,000 for those jointly entitled to parental allowance. On 1 April 2025, it will be moderately lowered again for couples to €175,000. For single parents, an income limit of €150,000 will apply from 1 April 2024.
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01 January 2024
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From 1 January 2024, the child supplement will increase from up to €250 to up to €292 per month and child. Parents who earn enough for themselves but whose income is not enough or only just enough to cover the family's entire needs will receive the child supplement.
For 2024, the child allowance will increase by €360 to €6,384 per child. The allowances are taken into account in income tax and result in parents having to pay less tax.
The so-called maintenance advance is intended to support single parents who receive no or irregular maintenance from the other parent. From January 2024, the advance will be:
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for children aged 0 to 5 years up to €230 per month (€43 more than before)
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for children aged 6 to 11 years up to €301 per month (€49 more than before)
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for children aged 12 to 17 up to €395 per month (€57 more than before
The number of regular children's sick days has also increased - compared to the years before the coronavirus pandemic - from 10 to 15 working days per child and parent per year. For single parents, there are now 30 working days instead of 20. If there are several children, a total of up to 35 working days per parent can be taken in future, or 70 working days in the case of single parents. This will apply in 2024 and 2025. If the child is hospitalised, there will be an unlimited entitlement to child sickness benefit from 2024. The amount of children's sick pay is generally 90 percent of the lost net income. To be eligible, both the affected parent and the child must have statutory health insurance and the child must be under the age of twelve or dependent on assistance due to a disability.
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Use of measure
According to the Federal Statistical Office in June 2022, 9.9 million recipients received child benefit in December 2021, corresponding to expenditure of €47.6 million. In December 2021, around 16.7 million children received child benefits. In December 2022, around 17.2 million children received child benefits. Current figures can be found on the website of the [Federal Statistical Office] (https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Soziales/Elterngeld/Tabellen/anzahl-kinder-kindergeld.htm].
Target groups
Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Consulted
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Unknown
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Form
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Direct consultation outside a formal body
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Peak or cross-sectoral level
Involvement
The Association comment is part of a public hearing of the Finance Committee on 17 October 2022.
Views and reactions
Several experts described the measures in the Inflation Compensation Act as insufficient and called for significantly higher relief, especially for families. The main reason given was the inflation forecasts used as a basis in the draft law were outdated.
The Confederation of German Trade Unions (DGB) criticised that higher income earners would be relieved more by the child allowance than normal income earners. According to the DGB, the current system is based on the principle that the higher the income, the greater the resulting financial advantage from the child allowance. At the same time, the lower child allowance is not enough to ensure social participation for many children. According to the DGB, 20 per cent of all children in Germany live in poverty. Consequently, the goal must be to support children in a fair way. Therefore, the child allowance must be abolished in favour of an increased child benefit for all within the framework of a basic child allowance, the DGB demands.
Sources
