The new basic child benefit
Reform of family support in Germany
Child benefit has been an integral and fundamental part of German family policy for a very long time (since 1954) and is firmly anchored in the Income Tax Act. Since then, the situation of families in Germany has understandably changed. Some other benefits have also been added, which is why there are now a large number of individual benefits. These include, for example.
- Hartz-IV-Benefits for children
- Parts of the education and participation package
- Child benefit bonus (“Kinderzuschlag”) for families with small incomes
which, together with child benefit, are now to be combined with the new basic child benefit.
Here are the most important facts about the new basic child benefit:
- There are very many family support benefits in Germany
- Different federal parties have partly different concepts to bundle some benefits
- This mainly concerns child benefit, which is to be reformed in such a way that other child-related benefits are paid out at the same time as child benefit (to those entitled to them).
- The federal government elected in the fall of 2021 agreed on a joint concept in the coalition agreement, which is called “new basic child benefit” and is to consist of a guaranteed amount and a graduated additional amount dependent on parental income.
- At the end of March 2022, an interministerial working group met for the first time to present a viable concept by the end of 2023.
We therefore expect the new basic child benefit to be introduced on January 1, 2025 at the earliest (but we are happy to be surprised).
New basic child benefit in coalition agreement
The coalition formed in the fall of 2021 agreed on the following regarding the new basic child benefit in the coalition agreement:
We want to create better opportunities for children and young people with the new basic child benefit and focus on those who need the most support. We want to lift more children out of poverty, focusing in particular on digitization and reducing bureaucracy. We will continue to strengthen daycare centers, schools and other educational and mobility services.
In a new start to family support, we want to bundle previous financial support – such as child benefit, benefits from SGB II/XII for children, parts of the education and participation package, and the child benefit bonus (Kinderzuschlag) – into a simple, automatically calculated and paid support benefit. This benefit should reach children directly without bureaucratic hurdles and secure their socio-cultural subsistence level, which is to be redefined.
The new basic child benefit is to consist of two components: A guaranteed amount that is not dependent on income and is the same for all children and young people, and a graduated additional amount that is dependent on parental income. Entitled adults will receive the benefit directly.
With the guaranteed amount, we are laying the foundation in this legislative period for our perspective goal of meeting the constitutional requirements for exemption of the minimum subsistence level for children in the taxation of parental income in the future through the guaranteed amount alone.
When bundling benefits, we examine interactions with other benefits and ensure that gainful employment is worthwhile for parents. An interdepartmental working group is to be set up for this purpose under the leadership of the Federal Ministry for Women, Senior Citizens, Family and Youth.
We want to provide children with easy access to a new digital child opportunities portal, where benefits for education and participation can be found. Together with the federal states, we want to harmonize the definition of income in all laws by mid-2023. Until the new basic child benefit is actually introduced, we will provide children affected by poverty who are entitled to benefits under SGB II, SGB XII or child benefit bonus (Kinderzuschlag) with an immediate supplement.
We will relieve the burden on single parents, who are currently most affected by poverty, with a tax credit. (Coalition agreement 2021-2025, paragraphs 3322 – 3351; page 100)
It is a mammoth project. Not only is it promised that the benefits will be delivered “simply” and “automatically” to those entitled to them, but the very idea of unraveling, untangling and reorganizing the existing system of family benefits offices, social welfare offices, etc., gives rise to the suspicion of major bureaucratic hurdles. Not to mention data protection concerns.
Real successes that would reach parents in this legislative period would be quite ambitious in our opinion. But every change must begin, otherwise everything will remain the same.
New basic child benefit according to political parties' wishes
Sozialdemokratische Partei Deutschlands (SPD)
The SPD concept for the new basic child benefit was discussed and decided at the party congress on December 04, 2021.
The SPD decided on the following key points:
- Good, non-contributory daycare centers, free all-day programs for schoolchildren and free bus and rail travel for all children are to be created throughout the country.
- The SPD wants to develop a participation account in the form of a child card. Each child should have 30 euros a month for the sports club, music school or swimming pool – regardless of the parents’ wallets.
An end is to be put to the patchwork of individual benefits for children: a cash benefit that guarantees a livelihood is to combine all previous family benefits – graded according to the parents’ income situation. “The poorer the family, the higher the cash benefit will be,” Malu Dreyer said.
The basic monthly amount is to be 250 euros and the maximum amount is to be based on the age of the children: 400 euros for under-six-year-olds, 458 euros for ages six to 13, and 478 euros for children 14 and older. Of this amount, 30 euros will go to the children’s card – i.e., will not go to the parents, but directly to the children.
“I am convinced that investing in children is the best investment we can make in Germany for the future,” Malu Dreyer emphasized. In a rich country like Germany, she said, it cannot be right that so many children are in child poverty. “We must put an end to this as soon as possible.”
Bündnis '90 - die Grünen
Bündnis 90 – die Gründen want to combine child benefit, child benefit bonus (Kinderzuschlag), social benefit and needs for education and participation in a new independent benefit.
With the new basic child benefit, each child would receive a fixed guaranteed amount, while children in families with low or no income would also receive a GuaranteePlus amount. The lower the family income, the higher the GuaranteePlus amount. After a one-time application at birth, the amount of the new basic child benefit is automatically calculated, adjusted and paid out. To determine the amount of the new basic child benefit, the party will regularly reassess what children need to live.
Die Grünen see the guarantee amount at 290€, the guarantee amount increases the new basic child benefit depending on the ability of the parents and the age of the child up to 547€ monthly.
A detailed question and answer catalog is provided by Bündnis 90 – die Grünen here.
Freie Demokratische Partei (FDP)
With its own concept, the FDP wants to bundle all family benefits, i.e. child benefit, child benefit bonus (Kinderzuschlag), housing benefit, social benefit, advance maintenance payments and benefits from the education and participation package. The new benefit is to be called “child opportunity benefit” (Kinderchancengeld) and was already decided at the end of November 2018.
A central contact point at the child benefit department is to pay out the child opportunity benefit. Children are to receive their own security entitlement – and better access to education. “The social benefit jungle is a bureaucracy monster and an absolute imposition for parents, especially for single parents who are urgently dependent on assistance,” explains Suding.
Quite concretely, the FDP proposes the following with the child opportunity benefit:
We Free Democrats want to finally combat child poverty through effective and sustainable reforms. Children will become the focus of family policy support with their own entitlement, and access to education and equal opportunities will provide them with the basis for a self-determined life in social responsibility. The previous child-related benefits are therefore to be bundled, networked and simplified in the child opportunity benefit in order to reach all eligible children. This will create a uniform entitlement at a central point. All process steps required for this will be digitally merged in the background. This “one-face-to-the-customer principle” means that people will find advice, applications and payments at a single point of contact at the child benefit department (Familienkasse). After implementation of the OZG (Online Access Act), applicants will already find a pre-filled application containing all existing documents. The child opportunity benefit combines the transfer benefits that were previously paid out to parents in material form in relation to the child (e.g. child benefit, child benefit bonus (Kinderzuschlag), advance maintenance payments, effects of children on housing benefit, benefits for children under Social Code Book II, education and participation package). As a result, a package of benefits is created that is tailored to the respective child, which is delivered to the legal guardians partly as a cash payment and partly as benefits that they can receive through contemporary digital access. In this way, the services reach children in all family forms. Children in a community of need with ALG II recipients are removed from the community of need so that the child opportunity benefit becomes an independent entitlement for the child. This legal reorientation makes it easier to focus clearly on the best interests of the child in court negotiations. Although the entitlement is usually managed by the custodians, it can be managed by the youth welfare office in the case of underserved children. At the same time, processing and payment must take place within a family-friendly time limit. If necessary, interest on late payments must provide appropriate incentives. A central part will be the effective expansion in education and opportunity promotion to ensure participation and access to education for all children.
The child opportunity benefit consists of the following three coordinated pillars that together make up the new benefit:
1. Basic amount – independent of income
Each child is entitled to a clearly defined basic amount. The amount is based on the sum of the current non-income-related benefits (until now child benefit), but is no longer differentiated according to the number of children. The exact amount is determined at regular intervals by a commission in accordance with constitutional requirements. Parents can receive the basic amount directly after the birth of the child without an additional application when registering the child at the registry office. For this purpose, the required data is forwarded from the registry office to the child benefit department (Familienkasse). To this end, the existing legal hurdles, such as the prescribed written form (Section 67 EStG), must be abolished and the regulation on electronic communication (Section 3a VwVfG) expanded and specified, and the digital infrastructure between the offices must be adapted. With the Online Access Act (OZG), which came into force in August 2017, the federal, state and local governments are also obliged to offer their administrative services digitally in a network of their administrative portals by 2022 at the latest. This will enable digital networking of all funding.
2. Flexi amount – income-dependent
The amount of the flexi amount depends on the parents’ income. Other possible criteria besides taxable income may include whether one parent is a single parent or the number of children in the cohabiting relationship. In particular, the benefits for children under SGB II (social benefits and child benefit bonus (Kinderzuschlag) in HartzIV needs communities) and the calculated share of housing benefit, accommodation and heating as well as child housing benefit will be included with the aim of achieving economic stability for families. We will take care to ensure that this does not result in more bureaucracy for families as a whole. A minor child’s own income (pocket money jobs) will receive a graduated allowance, similar to the Liberal Citizen’s Income, in order to have an activating effect.
3. Opportunity package – for education and participation
The opportunity package is an effective instrument for equal opportunities and offers unbureaucratic access to education and participation for children. In addition to the existing benefits of the education and participation package, there is an expansion with a significant increase in benefits in the area of education and opportunities. The opportunity package strengthens self-determination, personal responsibility and equal opportunities – regardless of social situation or origin. As a result, children no longer pose a risk of poverty. The introduction of modern digital access will make it easier to use. With its help, access to the various services will become far less complicated for children. They will be able to choose their support freely and we will enable everything necessary in the background. In focusing the child opportunity benefit on this central point, we are thus following the experience of professionals on the ground. Digital access for children ensures that education and participation benefits reach children directly. Parents and their children can provide important activation in the market through their demand. For example, membership in a sports club or learning a musical instrument at a music school should be possible without bureaucracy. But healthy food, school supplies, social participation in leisure facilities and tutoring are also integrated.
The deputy chairman of the CDU/CSU parliamentary group in the German Bundestag, Nadine Schön, explains the following to the project new basic child benefit in the coalition agreement:
„We have been waiting with eager anticipation to see what form the new basic child benefit scheme would take, which the parties to the “Ampel”coalition had already announced as a new universal remedy against child poverty before presenting their coalition agreement.
The coalition agreement sounds promising here at first, but is ultimately sobering. Apparently, the “Ampel” has no idea how it intends to implement its promise of a new basic child benefit.
The calculation of the graduated additional amount, which depends on parental income and is to be paid in addition to a uniform guaranteed amount for all children and young people, remains completely unclear. For the time being, the “Ampel” wants to form a working group to examine interactions with other benefits in the bundling of benefits and to ensure ‘that gainful employment is worthwhile for parents.’ Until the introduction of the new basic child benefit, the “Ampel” wants to protect children affected by poverty with an immediate supplement and relieve single parents with a tax credit.
The much-vaunted new basic child benefit is a bill with many unknowns and a priced-in interim solution.“
The CDU itself does not have any kind of “new basic child benefit” in its program, but agreed on the following points for the Bundestag election program in this regard:
- There should be more generational equity in finances and taxes. The CDU/CSU points out that child benefit and child benefit exempt amounts have “already been significantly increased” as of January 1, 2021 – specifically by 15 euros and 144 euros per child.
- “In the future,” he said, “there should be a full basic tax exempt amount for children, which would be the first step toward tax splitting for children.
- The tax relief contribution for single parents is to increase to 5,000 Euro.
- Household-related services are to be given better tax treatment to ease the burden on families.
“The Alternative for Germany” thinks taxes and contributions for families are generally too high. “Income tax for families must be reduced significantly,” Alice Weidel, who is part of the top duo for the Bundestag election, said in an interview with ZDF as part of the Bundestag campaign. Middle-income earners are the most heavily burdened in Europe, she said, and that’s something they want to change.
In the AfD’s Bundestag election program, the following was agreed upon in this regard:
- The AfD wants to relieve the tax burden on families by introducing a family splitting scheme, raising the child benefit exemption amount and making expenses for children fully tax-deductible.
- Child benefit should remain as it is.
- For each child, the AfD wants to reimburse 20,000 euros of parents’ contributions to pension insurance from tax revenues, without reducing pension entitlements.
- In addition, the childcare benefit is to be activated: Parents or grandparents are to receive it as a wage replacement benefit for three years. The amount is to be based on the previous average net wage for the three years before the birth of the first child, capped at the general average wage.
- Young families should receive a marriage start-up credit.
In the previous legislative period, the Alternative for Germany tabled various motions on this topic in the Bundestag. In these motions, the AfD demanded, for example, an interest-free “baby welcome loan” of 10,000 euros for parent couples (Bundestag printed paper 19/24672), the reduction of VAT on baby diapers to seven percent (Bundestag printed paper 19/24656), as well as a public relations offensive against the social stigmatization of multiple-child families and measures to realize the desire of many parents for a second and third child (Bundestag printed paper 19/24673).
It also called for greater monitoring of pregnancy conflict counseling and its providers (BT-Drucks. 19/24657) and for greater emphasis on the importance of births and the protection of unborn life in public schools and on public broadcasting (BT-Drucks. 19/24652). The Bundestag referred three of these motions (BT-Drucks. 19/24672, 19/24673 and 19/24657) to the lead family committee for further discussion. One motion (BT-Drucks. 19/24656) would be discussed by the Finance Committee, the fifth motion (BT-Drucks. 19/24652) by the Committee on Culture and Media.
Germany is not suffering from an aging society, but from too few children, said AfD family politician Martin Reichardt. The decline in the birth rate cannot be compensated by immigration, but only by an active family policy.
The political party – “Die Linke” pursues its own concept of new basic child benefit. Thus, the Bundestag election program stated the following:
- Children from Hartz IV families are to receive a one-off IT bonus of 500 euros. It is then to be transferred to the new basic child benefit.
- Each child is to receive 328 euros until the age of 18 or until they graduate from high school, regardless of their parents’ income.
- This can grow to 630 euros, depending on parental income.
- This basic child benefit is to be exclusively for the child and is not to be counted against the parents’ income for tax purposes.
- Childcare should also generally be free of charge.
Already in March 2020, “Die Linke” in the German Bundestag presented this proposal for a new basic child benefit:
The concept is based on the living environment of children and young people and their individual needs! The new basic child benefit system is based on four pillars:
1. Pillar: Every child is worth the same to us! We are increasing the child benefit for all children to 328 euros per month. All families benefit from the new child benefit!
2. Pillar: Establish justice, overcome child poverty! Children from poor families receive a bonus in addition to the child benefit. This bonus is aimed at children whose parents are dependent on basic welfare benefits such as Hartz IV or social assistance, or who can only support themselves with a low income from gainful employment. The supplement depends on age, because elementary school children need more than kindergarten children and adolescents need more than elementary school children.
3. Pillar: Take actual accommodation costs into account! The supplements of the basic child benefit already include housing and heating costs up to 149 euros per month. Child-related housing and heating costs in excess of this amount are taken into account in full.
4. Pillar: Recognize one-time and special needs! At irregular intervals in everyday life, and depending on the family’s living situation, there may be additional needs that cannot be covered by current income. These include, for example, school trips, moving expenses or celebrations that mark new stages in the lives of children or young people, such as the first day of school or youth dedication, confirmation or communion.
All children and young people should receive this new basic child benefit until they reach the age of 18. Young adults will receive this benefit until they graduate from high school, including the Abitur. Child benefits will continue to be granted for periods of training and study, as is already the case today; in addition, special benefits such as BAföG or vocational training support including minimum training allowance will apply.
Information on the implementation of the new basic child benefit concept
Another ministry involved - 2025 as goal determined
22. November 2022
In her budget speech to the German Bundestag, the Federal Minister for Family Affairs, Senior Citizens, Women and Youth, Ms. Lisa Paus, named the calendar year 2025 as the target year for the start of the basic child benefit scheme – as we had already predicted.
In the meantime, the Federal Ministry of Inner affairs has also been called to join the interministerial working group, which is why 7 ministries are now working on the draft.
Working group formed
29 March 2022
The “Ampel” coalition of SPD, Grüne and FDP began with the concrete calculations for the new basic child benefit. On March 29, 2022, representatives from six ministries met for the first time to discuss the details of the new family allowance:
The finance, justice, labor, education and construction ministries, as well as the lead family ministry, are involved. This “interministerial working group” will discuss and meet again and again about the amount and design of the planned benefits.
“For the new basic child benefit, a part of the 150 family policy benefits that are currently still located in different ministries will be bundled. This is a complex project,” explained former Family Minister Spiegel on Tuesday before the start of the working group. “The new basic child benefit should reach children directly, without bureaucratic hurdles if possible, and fundamentally improve their opportunities.”
The plan is for the working group to develop a concept for a new basic child benefit by the end of 2023. The states, associations, societies and foundations are also to be consulted.
As a transitional arrangement until the new basic child benefit is introduced, the cabinet had already approved the so-called immediate supplement for children and young people from poorer families in mid-March 2022.
From July 2022, children and young people in families dependent on social benefits will receive an extra 20 euros a month. In total, an estimated 2.9 million people will benefit from the supplement – in contrast to previous plans, around 200,000 children of asylum seekers will also receive it. The immediate supplement for children will cost around 750 million euros a year.
Agreement on new basic child benefit in coalition agreement
With the agreement on the coalition of the newly elected parliamentary groups in the Bundestag, the governing groups agreed on a concept for basic security. A working group consisting of various interdepartmental experts was to be formed and a concept developed.
You can find out more about the statements in the coalition agreement in our article on the topic “New basic child benefit in coalition agreement”.
What is new basic child benefit?
When will the new basic child benefit be introduced?
How much is the new basic child benefit?
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