Finance Minister Lindner would like to increase the child allowance without adjusting the child benefit, which was last increased in 2023. This is met with criticism from the coalition partners. The government now wants to check whether a further increase in child benefit is also appropriate.
The federal government continues to argue about a possible increase in child benefit. Government spokesman Steffen Hebestreit said in Berlin that it is currently being examined whether the current wage development requires an adjustment to the child tax allowance. “If that is necessary, we must discuss whether, in addition to the allowance, an adjustment to child benefit is necessary and possible,” he said. He also referred to the budget for the current year, which is to be decided in the Bundestag next week.
On Friday it became known that Finance Minister Christian Lindner (FDP) wants to increase the tax allowance for children retroactively to January 1st, but without increasing child benefit at the same time. Child benefit was last increased from 219 to 250 euros in January 2023.
Parents automatically receive either child benefit or income tax allowances for children. The tax office checks what is more advantageous for you. The allowance is often only worthwhile for higher incomes. It was already raised from 6,024 euros to 6,384 on January 1st and, according to Lindner’s plans, will now rise retroactively to 6,612 euros.
Criticism from the SPD
SPD party leader Lars Klingbeil had criticized Lindner’s current plans as unfair because they would only provide relief for families with very high incomes. “Especially the working middle class, those who get up every day, work hard to earn their income and also look after their children, neighbors and the club, should be relieved,” said Klingbeil.
SPD parliamentary group vice-president Sönke Rix told the newspaper “Welt”: “Child benefit must also be increased so that families with small budgets benefit.” Everything else is unfair. Green Party deputy Andreas Audretsch made a similar statement. “Child benefit must increase in parallel to the child allowance, that is a question of justice. Just allowing the child allowance to increase would mean that there would be 23 euros more per month for children of top earners, and there would be nothing for middle class children,” said he also belongs to the “world”.
FDP parliamentary group leader Christian Dürr, however, supported Lindner’s plans. In the Deutschlandfunk He said that the procedure of initially increasing child benefit for 2023 and only later increasing the child allowance was exactly how the coalition agreed. “It was better that we had increased the child benefit at an early stage, effective as early as 2023. Now the basic allowance and the child allowance will increase again in 2024,” said Dürr.
He had previously told “Welt”: “Last year, the largest child benefit increase in the history of the Federal Republic took effect. Now this increase must also be reflected in tax law.”
The FDP presidium had previously said: The current approach to tax allowances and child benefit goes back to Federal Chancellor Olaf Scholz (SPD). Klingbeil should coordinate better with Scholz. “It was decided in 2022, at the suggestion of Olaf Scholz, to increase child benefit disproportionately to 250 euros once,” the dpa news agency learned from the FDP presidium. “The child tax allowance, however, should be added in the usual procedure. Nothing else is planned.”
If the SPD has a unified position, the coalition can advise. “But it is not acceptable for the Finance Ministry to be criticized by the SPD if it implements agreements with Olaf Scholz.”
Criticism from associations
Criticism of Lindner’s plans also came from social associations. The Joint Association called Lindner’s plan “deeply unfair.” “With his plans for the child allowance, the finance minister is cementing the unequal treatment of top earners and families with middle and low incomes,” explained the general manager of the social association, Ulrich Schneider.
“Increasing the allowance for children of very well-earning parents, but not the child benefit, disadvantages all families with small and medium incomes,” said Diakonie board member Maria Loheide. However, these suffered particularly from the price increases. The constitutionally guaranteed subsistence level applies to all children, “not just to the children of rich parents.”
The Child Protection Association said that with the plans, children who only receive child benefit would receive up to 118 euros less in state subsidies per month. By the time the children come of age, this adds up to a difference of over 25,000 euros.
Mützenich calls for “new child benefit”
SPD parliamentary group leader Rolf Mützenich has called for a completely new approach in view of the discussions with the FDP about a possible increase in the child tax allowance. “So that further debates about the unequal benefits for children no longer arise in the future, we should replace the child allowance with a new child benefit,” he told the Rheinische Post.
It was “incomprehensible” to him why Lindner proposed an increase in the child tax allowance a few days after the decision on the 2024 budget. “Everyone, the finance minister said at the demonstration last Monday, must make a contribution to consolidation,” said Mützenich. “Why this shouldn’t apply to top earners is beyond my imagination.” Mützenich initially made no concrete suggestions for a “new child benefit”.
Green Party leader Lang calls for moderation
The current discussions about child benefit counteract constant warnings from within our own ranks that the traffic light coalition should no longer argue so much in public. In this sense, Green Party leader Lang has just commented, who sees the disputes as a major reason for the loss of trust in the government. “Arguing less publicly should not remain a New Year’s resolution; it must finally become a reality,” she said in Berlin. The traffic light needs to negotiate more behind closed doors, make compromises together and not attack each other so strongly in their political style.