The lower income limit for receiving parental allowance should only apply to births from January 1, 2024. According to the Ministry of Family Affairs, those who are already receiving parental allowance will continue to be entitled to it.
The planned reduction in the income limit for receiving parental allowance should not apply retrospectively, but only for births from January 1, 2024. “Anyone who is already receiving parental allowance or parental allowance plus would still be entitled to it. A grandfathering applies,” said a spokesman for the Federal Ministry for Family Affairs the newspapers of the Funke media group.
Federal Minister for Family Affairs Lisa Paus proposed the changes to parental allowance in order to be able to achieve the savings in the 2024 federal budget demanded by Federal Minister of Finance Christian Lindner. The cabinet approved the draft budget last week. Deliberations will follow in the autumn in the Bundestag, which is expected to adopt the federal budget for the coming year in December. Until then, the changes to parental allowance for high-income households are just a proposal from the Ministry for Family Affairs.
income limit should drop to 150,000 euros
According to this proposal, future parents should only be entitled to parental allowance if their joint taxable annual income is a maximum of 150,000 euros. The upper limit is currently 300,000 euros. According to estimates by the Ministry for Family Affairs, as a result of the lowering of the income limit, around 60,000 families would no longer be entitled to state wage replacement benefits during parental leave. In 2020, the then grand coalition had already lowered the upper salary limit from 500,000 to the current 300,000 euros in taxable annual income. This regulation then applied to all births from September 1, 2021.
The parental allowance introduced in 2007 supports people who do not work or only work a little after the birth of the child and thus earn little or no money. Parents with higher incomes receive 65 percent, parents with lower incomes up to 100 percent of the net earnings they had before the birth. Parental allowance is at least 300 euros and a maximum of 1800 euros per month. It therefore no longer increases with higher incomes.
The parental allowance is paid for a maximum of 14 months if both parents participate in childcare. According to the Federal Statistical Office, a good 1.8 million people received parental allowance last year.