Chapter IX: Family benefits

Applicable statutory basis

Family allowances

Other benefits

Special cases

Taxation and social contributions

Applicable statutory basis

Federal Child Benefit Act (Bundeskindergeldgesetz) of 14 April 1964, amended version of 23 January 1997, most recently amended by the law dated 16 December 1997.

Social Code (Sozialgesetzbuch), general part, 11 December 1975, most recently amended by the Law of 20 June 1991.

Law on the advance payment of maintenance (Unterhaltsvorschußgesetz) of 23 July 1979, amended version of 19 January 1994.

Federal Law on Child-raising Allowance (Bundeserziehungsgeldgesetz) of 6 December 1985, amended version of 31 January 1994.

Income tax law (Einkommensteuergesetz), amended version of 23 January 1997, most recently amended by the law dated 16 December 1997.

Family allowances

1. First child giving entitlement

1st child.

2. Conditions

Residence in Germany or - if there is unrestricted liability to German taxation - in an EEA-Member State.

3. Age limit

Normal: 18 years.

Prolongation to 21 possible for those available for work as unemployed.

Vocational training / further education/ applicants for a vocational training opportunity: 27 years.

Child income: no claims if income or earnings designed for the child's upbringing or for the purpose of his/her education is exceeding DEM 12,360 (EUR 6,320) per calendar year. Earnings destined for particular educational purposes are not included.

Handicapped persons: No limit.

4. Monthly amounts

1st child: DEM 250 (EUR 128).

2nd child: DEM 250 (EUR 128).

3rd child: DEM 300 (EUR 153).

4th and subsequent: DEM 350 (EUR 179).

5. Supplements which vary with income

No income related variation.

6. Supplements which vary with age

No variation with age.

Other benefits

1. Birth grants

See "Other allowances" and Table IV "Maternity".

2. Allowance for single parent

The Law on the advance payment of maintenance (Unterhaltsvorschußgesetz) guarantees a minimum maintenance for children under the age of 12 living in a single parent household and being resident in Germany or normally residing there, for a maximum of six years, if maintenance is not paid by the other parent.

Maintenance benefit is up to a maximum of DEM 324 (EUR 166) in the old Länder, DEM 280 (EUR 143) in the new Länder.

3. Special allowances for handicapped children

None.

4. Accommodation allow ances and removal grants

A housing allowance (Wohngeld) is paid to a lodger or owner in own dwelling if housing costs are too onerous.

5. Other allowances

Child-raising allowance (Erziehungsgeld):

DEM 600 (EUR 307) per month for the first 24 months following the child's birth.

An annual income ceiling is applicable. This is fixed at DEM 100,000 (EUR 51,129) during the first six months for a married couple and at DEM 75,000 (EUR 38,347) for other eligible parties. From the seventh month onwards the limit is fixed at DEM 29,400 (EUR 15,032) for married couples and at DEM 23,700 (EUR 12,118) for other eligible parties. These income ceilings are increased by DEM 4,200 (EUR 2,147) for each further child of the eligible person.

For births from 1.1.1992 onwards this allowance is treated separately from parental leave.

Furthermore from this date onwards a parent is entitled to 36 months of leave, from the date of the birth of the child.

Special cases

1. Unemployed persons

Normal family benefits.

2. Pensioners

Normal family allowances.

3. Orphans

Normal family allowances.

Taxation and social contributions

1. Taxation of cash benefits

Benefits are not liable to taxation (regardless of progression).

2. Limit of income for tax relief or tax reduction

Not applicable.

3. Social security contributions from benefits