What now applies to parental allowance

The hurdles for parental allowance are getting higher. Higher earners no longer receive parental allowance and the parallel receipt of parental allowance is also restricted because the federal government has to save money. An overview.

Heated debates about equality, online petitions and a dispute between the Greens and the FDP on an open stage – all of this triggered the planned cut in parental allowance last year.

The background: The federal government has to save money. Finance Minister Christian Lindner (FDP) had asked all ministers to make cuts in their budgets – with the exception of the Ministry of Defense. Family Minister Lisa Paus (Greens) has decided to cut parental allowance. Because that is the largest item in your budget.

New rules now apply: the circle of parental allowance recipients should become smaller – but in a weaker form than originally planned. However, higher earners no longer receive parental allowance. With the changes, the Family Ministry expects to save 250 million euros annually from 2026.

What changes with parental allowance?

The income limit for parental allowance is falling: Parents whose children are born from April 1, 2024 are only allowed to collectively earn a maximum of 200,000 euros per year in order to receive parental allowance. Previously, the limit was a taxable annual income of 300,000 euros. The same applies to single parents – their income limit was previously 250,000 euros.

The Federal Ministry for Family Affairs expects that around 7,000 couples will be affected by the lowering of the income limit in 2024, which corresponds to around 0.5 percent.

From April 1, 2025, the income limit will drop again for couples and single parents alike: to 175,000 euros. If the limit is exceeded, you are no longer entitled to parental allowance. According to internal estimates, the ministry assumes that “only a small number of single parents will be affected by the lowering of the income limit” with this step.

What changes if you receive parental allowance at the same time?

From April 1, 2024, parents will no longer be able to stay at home together for that long and receive parental allowance at the same time: Although the previous 14 months of standard parental allowance will remain, from April it will only be possible to spend one month at home with the partner at the same time to stay and receive parental allowance – and only in the child’s first year of life. There should be exceptions for multiple or premature births and children with disabilities.

How are the changes received by those affected?

The Federal Ministry for Family Affairs has commissioned a representative online survey on the changes. Accordingly, almost two thirds of the 1,057 respondents consider lowering the income limit to be correct or rather correct. It is said that even among potentially affected groups such as families or people under 40, more people think the reduction is right than wrong.

A different picture emerges when it comes to the change in the simultaneous receipt of parental allowance: 45 percent of those surveyed think the change is right. However, almost a third say they are unable to assess it, thus highlighting a relatively high level of uncertainty.

What is parental allowance?

Parental allowance is a state financial benefit: It is intended to enable parents to take time for their children after birth. The amount of parental allowance depends on the income before the birth and the loss of income afterwards.

Parents with higher incomes receive up to 65 percent of their previous income, while parents with lower incomes can receive up to 100 percent. The amount of parental allowance therefore varies. However, the following applies: You can receive a minimum of 300 euros per month and a maximum of 1,800 euros per month.

How many people receive parental allowance?

As current figures from the Federal Statistical Office show, 1.8 million people in Germany applied for parental allowance last year. That is less than the year before – a decline of 4.3 percent. Of the 1.8 million recipients, 1.3 million were women.

How do you receive parental allowance?

Parental allowance must be applied for. This is also the case in some federal states online via Parental allowance digital possible. Mothers and fathers can use the digital parental allowance calculator to calculate their entitlement.