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New income limits: reduction in parental allowance hits families hard!
Parental allowance regulations are changing: from April 2024 the income limit will decrease. Find out what this means for families.
New income limits: reduction in parental allowance hits families hard!
In Germany, parents will face significant changes to parental allowance from April 1, 2024. The new regulation provides for a reduction in the income limit, which will in future be 200,000 euros of taxable income for couples and single parents. This represents a significant reduction, as the previous limit until March 31, 2024 was 300,000 euros for couples and 250,000 euros for single parents. This adjustment is made within the framework of the Federal Finance Minister's savings requirements, as explained on the website of the Federal Ministry for Family, Senior Citizens, Women and Youth (BMFSFJ).
From April 1, 2025, the income limit will be further reduced to 175,000 euros. The relevant period for calculating taxable income is based on the calendar year before the birth of the child. For employees, the income from the 12 months before the birth or before the start of maternity leave is taken as a basis, while self-employed people must use the previous year's income from the last tax assessment Chip.de reported.
Further details about the new regulations
As for the other provisions, the minimum amount of parental allowance remains at 300 euros, while the maximum amount remains at 1,800 euros for parents with a net parental allowance of over 2,770 euros. From May 1, 2025, applying for parental allowance for self-employed people will be simplified. The new regulation also stipulates that the parallel receipt of basic parental allowance will be limited to a maximum of one month within the first twelve months of the child's life from April 1, 2024, with exceptions for parents of premature babies, multiple births and children with disabilities.
The receipt of basic parental allowance can be extended until the child is 14 months old, provided both parents apply for parental allowance. These regulations come into force for births from April 1, 2024, as explained on the BMFSFJ website: BMFSFJ.