Elterngeld is a parental benefit in Germany that is financial aid for parents of small children. The allowance was introduced so that parents could focus exclusively on raising their children and did not have to work at the same time. Elterngeld is regulated by the Childcare Benefit Act.
Who can apply for parental allowance in Germany?
In order to be eligible for the German parental allowance the following conditions have to be fulfilled:
- The place of residence or permanent stay is Germany
In some cases exceptions to this rule are possible. In some cases it is possible to make exceptions to this rule as people who do not live in Germany can also apply for the allowance. This applies to people who:
– Work abroad as part of their employment in Germany,
– Volunteer in third world countries or missions,
– Have German citizenship and work in an international organisation (such as the European Union) or in diplomacy.
- The child must live with the applicant
It is also possible to receive child benefit for a child of another person if one of the following conditions is met:
– an adoption is planned,
– The child is the child of your life partner,
– Acknowledgement of paternity is in progress,
– the child’s parents cannot take care of the child due to illness, serious disability or death. In such cases, the benefit is granted to family members who are related up to the third degree (great-grandparents, grandparents, uncles and aunts and siblings).
- The child must be brought up independently
Generally, a child must be raised independently unless there is a compelling reason why the child is not temporarily in the custody of the parents.
- You cannot work full time
You cannot work full-time if:
– the work performed takes up no more than 30 hours per week,
– the work is part of a vocational training course [Berufsausbildung],
– you work as a childminder in your own home and have no more than five children in your care.
- The income limit cannot be exceeded
If the earnings of a single mother or father amount to more than €250,000 in the calendar year preceding the birth of the child, they are not entitled to parental allowance. The same applies to couples whose combined earnings exceed €500,000.
How much is the parental allowance in Germany?
The amount of the parental allowance is calculated on the basis of the parent’s net income for the last 12 months before the birth of the child. However, periods of maternity allowance (Mutterschaftsgeld) and months in which the mother earned less due to pregnancy-related illness, for example, are not taken into account. Then the previous months are taken into account. Additional benefits such as unemployment benefit or scholarships are not included in the calculation.
In the case of self-employed persons, the earnings from the previous tax year that are included in the tax return are taken into account. Thus, if a child is born in April, then earnings from January to December of the previous year should be taken into account in calculating the amount of the parental benefit. The parental allowance is a minimum of €300 and a maximum of €1,800 per month.
The higher your earnings, the lower the percentage of your previous pay you will receive as Elterngeld, but not less than 65% of your net pay. If the net income was between 1,000 and 1,200 euros, the parent will receive 67% of the salary as child benefit. For every additional 2 euros of salary, the allowance is reduced by 0.1% (example: 1220 euros = 66% of the parental allowance).
With a previous income of less than 1,000 euros the percentage of salary paid as Elterngeld increases. For every 20 euros below 1,000 euros the Elterngeld is increased by 1 percent. People who have not worked in the last 12 months are entitled to a minimum parental allowance of €300. In the case of multiples, a supplement of 300 euros is paid for the second child and each additional child.
It should be noted that the maternity allowance and the parental allowance are not paid in parallel. The latter is paid only after the maternity allowance ends.
How is the parental allowance taxed in Germany?
The parental benefit is generally tax-free and no social security contributions are paid on it, however, it directly affects tax rates. At the end of the year, all income from a given tax period is added to the parental allowance and the tax rate is determined based on this calculation. In very many cases, it increases that rate, so there are times when you have to settle tax arrears later. Extending the receipt of the parental benefit can mitigate this effect to some extent.
Where can I apply for parental allowance in Germany?
The application for the parental allowance has to be filed with the locally competent office (Elterngeldstelle) which differs depending on the federal state (type “Elterngeld + your town” into Google to find the competent office). The application does not have to be submitted immediately after the birth of the child. The allowance is paid up to three months back. In the application it is necessary to indicate for which period of time you want to receive the allowance. The chosen period of time may be changed later without having to give reasons.
How long can one receive parental allowance in Germany?
According to the law the right to receive parental allowance is valid from the day of birth of a child until the child is 14 months old. In the case of children of others, the right is valid for a period of 14 months from the moment of taking custody of the child and up to the child’s eighth birthday. A parent may claim the benefit for a period of two to a maximum of twelve months. Both parents are entitled to twelve months of benefits together. This period may be split between partners. If they both receive the benefit at the same time, the payment period is reduced by half (they both receive the parental benefit for six months at the same time). Please note that if the mother of the child received maternity allowance for the first two months, then the parental allowance is only paid for 10 months.
Can the parental allowance be extended?
In some cases it is possible to extend the parental allowance
- One parent may extend the parental allowance if the care provided by the other parent would have a negative impact on the child’s well-being or the care is impossible due to serious illness or handicap,
- If your previous salary has been reduced,
- If the child is being brought up alone and the person with custody rights also has the right to choose the place of residence [alleiniges Aufenthaltsbestimmungsrecht] and an independent right of custody [alleiniges Sorgerecht],
- The duration of the benefit can be doubled if the amount is halved.
What documents do I need to claim child benefit in Germany?
In order to apply for parental allowance you should prepare:
- A birth certificate (German: Geburtsbescheinigung),
- You will automatically receive this certificate when you collect your birth certificate at the civil registry office (Standesamt),
- Certificate of income from the last 12 months before the birth of the child,
- A certificate from the health insurance company (Krankenkasse) stating the amount of maternity allowance and the duration of the allowance,
- Copy of your parents’ identity card,
- Employer’s certificate of parental leave.
What is Elterngeld Plus?
In November 2014, the Bundestag passed the Elterngeld Plus law. For children born from June 2015, it will be possible to apply for the new Elterngeld Plus in addition to the Elterngeld. The new regulation, which came into force on January 1, 2015, is supposed to be more flexible and includes a bonus for partners.
The Elterngeld Plus is primarily intended to make it more attractive for young parents to return to work early. In case of part-time employment not exceeding 30 hours per week, Elterngeld Plus can be received twice as long as the traditional parental allowance. At the same time, its amount is half lower than Elterngeld without employment. Both parents and single parents can benefit from this form of benefit and instead of 14 months of Elterngeld they can receive Elterngeld Plus for 28 months.
As a bonus for partners, Elterngeld Plus can be extended for an additional 4 months at the request of the parents if both have a part-time job during that period. The same applies to single parents.
The traditional parental allowance will continue to exist. However, the parents have the possibility to combine the benefits, for example: The mother of the child does not work for half a year and receives the traditional parental benefit during that time and then starts working part-time and for the next 12 months receives Elterngeld Plus with a reduced amount of benefit. The father on the other hand may then take 2 months of Elterngeld or 4 months of Elterngeld Plus. Of course it is also possible to do it the other way round and the father can take a longer break. In the end both of them can take another 4 months of Elterngeld Plus at the same time.
How to calculate Elterngeld?
If you want to calculate the amount of Elterngeld, you can use the German parental allowance calculator from familienportal.de:
Where to find applications for Elterngeld?
Due to the fact that the applications for Elterngeld differ from federal state to federal state, in the link below you will find a list of the federal states with the websites where you can find the appropriate forms.
What to do if the waiting time for the decision on the Elterngeld is longer?
If you have applied for the Elterngeld and the waiting time for a reply from the Familienkasse gets longer, it is advisable in the first instance to contact the office directly. If this does not help, it is worth knowing what else can be done in this situation:
- What is a complaint to a superior about the actions of an official in Germany (German: Dienstaufsichtsbeschwerde)?
- What is an action in Germany for inactivity of a public authority (Untätigkeitsklage)?
Elterngeld vs. maternity allowance
When determining the calculation period before the birth of the child, Elterngeldstelle, the respective office responsible for the payment of Elterngeld, automatically excludes those months in which the mother received maternity allowance and/or an allowance from the employer. However this “exclusion” can be eliminated! A simple letter to the Elterngeldstelle will suffice. This makes sense if in the month in which the maternity protection started you still received a salary that is to be taken into account in the calculation of the parental allowance. However, the maternity allowance and the allowance from the employer do not constitute income from gainful employment and are not considered taxable income from gainful employment within the meaning of the BEEG.
Example: Ms. X gives birth to her first child on May 8, 2015. The maternity protection started on 30 March 2015. Elterngeldstelle does not take into account the 12 months before the birth of the child (May 2014 to April 2015), but the 12 months before the month in which the maternity protection started (i.e. March 2014 to February 2015). Due to a change of employer, Ms. X collected unemployment benefits from January to April 2014. In the automatically rescheduled pay period (by temporarily “turning off” the maternity protection), only 10 months with pay come out, because the unemployment benefit from March and April 2014 is not taken into account in the calculation of the parental benefit. In March 2015, Ms. X received almost all of her salary because maternity protection did not begin until May 30, 2015. Ms. X gives up the “exclusion” of maternity protection in writing. For the calculation of the parental allowance in her case, the period from May 2014 to April 2015 will be taken into account. Due to the waiver of the “exclusion” of maternity protection, March 2015 will also be taken into account for the calculation of the Elterngeld. As a result, Mrs. X is entitled to a higher parental allowance.
Elterngeld – practical advice
Take care of all the formalities before the birth
The application for parental allowance is quite extensive and requires many attachments, therefore it might take some time to fill it in and to complete all necessary documents. The first weeks after childbirth are usually very intense and demanding, so it is not worth leaving these formalities for then. All the materials can be filled out and prepared even before the birth, and at the end add only the child’s birth certificate, its date of birth and a certificate from the health insurance that the maternity benefit will continue to be paid after the birth. All this will certainly make the whole process easier and faster.
How to avoid long waiting periods?
Processing an application for parental benefit may involve a relatively long waiting time. In order to shorten it, it is best to call the appropriate office where the application should be submitted about 2 weeks after its submission. You should then make sure that all submitted documents are complete. Incomplete ones may have to wait several weeks for their turn. It is best to call regularly and ask about the status of your application. A little pressure on the clerks – but all the time in a nice and friendly tone – can help speed up the process.
Changing tax class
Depending on your family’s financial situation, you may want to consider changing your tax class. Some combinations may allow you to receive a slightly larger parental benefit. However, this only applies to married couples. However, this change should be made at least 7 months before your maternity leave begins, which is right at the beginning of your pregnancy.