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Parental Allowance in Germany: Eligibility and Benefits

Parental allowance is a German state benefit paid to parents after the birth or adoption of a child, replacing lost income so they can focus on early childcare.

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Things worth knowing about "Parental allowance"

Parental allowance is a German state benefit paid to parents after the birth or adoption of a child, replacing lost income so they can focus on early childcare.

What is Parental Allowance?

Parental allowance (German: Elterngeld) is an income-replacement benefit provided by the German government to support parents after the birth or adoption of a child. It enables mothers and fathers to take time off work or reduce their working hours in order to care for and raise their child. The amount is calculated on the basis of the net income earned in the twelve months prior to the birth and is paid out by the responsible parental allowance office (Elterngeldstelle).

Types of Parental Allowance

Germany offers three variants of parental allowance that can be used individually or in combination:

Basic Parental Allowance (Basiselterngeld): Granted for a maximum of 14 months when both parents claim the benefit. Single parents may also receive up to 14 months. It amounts to 65 % to 100 % of the lost net income, with a minimum of 300 euros and a maximum of 1,800 euros per month.
ElterngeldPlus: Designed for parents who wish to work part-time during the benefit period. One month of basic parental allowance equals two months of ElterngeldPlus. The monthly payment is lower, but the benefit period is extended accordingly.
Partnership Bonus (Partnerschaftsbonus): Parents who simultaneously work between 24 and 32 hours per week in part-time employment receive additional ElterngeldPlus months as a bonus for sharing parenting responsibilities equally.

Eligibility Requirements

Parents can apply for parental allowance if they meet the following requirements:

Residence or habitual place of abode in Germany
Living in the same household as the child
Taking responsibility for the care and upbringing of the child
Working no more than 32 hours per week during the benefit period
Income below the threshold (from 2024: taxable annual income below 200,000 euros for couples and 150,000 euros for single parents)

Amount and Calculation

The amount of parental allowance depends on the average adjusted net income in the twelve months before the month of birth. The replacement rate is:

65 % of net income as the standard rate
Up to 100 % for very low incomes (sibling bonus and multiple birth bonus may apply)
Minimum amount: 300 euros per month (also for parents without their own income)
Maximum amount: 1,800 euros per month for basic parental allowance

Duration and Allocation

Basic parental allowance can be received for a maximum of 12 months. Two additional partner months are granted if the other parent claims at least two months of parental allowance, resulting in a combined total of up to 14 months. With ElterngeldPlus, the benefit period is extended proportionally. Parents can divide the months flexibly and may also receive parental allowance simultaneously during some periods.

Application Process

The application for parental allowance must be submitted in writing to the responsible parental allowance office at the place of residence. The following documents are generally required:

Completed application form
Child's birth certificate
Proof of income (pay slips)
Employer's confirmation of the start of parental leave
For self-employed persons: tax assessment notice

Parental allowance can be applied for retroactively for up to three months prior to the month of application. However, it is advisable to submit the application as early as possible.

Tax Treatment

Parental allowance is generally tax-free but is subject to the so-called progression clause (Progressionsvorbehalt). This means that while the allowance itself is not taxed, it raises the tax rate applied to other income earned during the year. This can result in a higher overall tax burden and should be taken into account when filing the annual tax return.

Important Notes and Recent Changes

Parental allowance regulations are subject to regular legislative changes. Since 2024, stricter income thresholds apply. Couples with a taxable annual income exceeding 200,000 euros, and single parents with an income exceeding 150,000 euros, are no longer entitled to parental allowance. It is therefore strongly recommended to consult the responsible authority or a counselling service to obtain up-to-date legal information before applying.

References

Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ): Elterngeld, ElterngeldPlus und Elternzeit. Available at: www.bmfsfj.de (as of 2024)
Federal Parental Allowance and Parental Leave Act (BEEG) in its currently valid version, last amended 2024
Federal Statistical Office (Destatis): Parental Allowance Statistics 2023. Wiesbaden 2024

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