New income limits apply to births after April 1, 2024. The rules for simultaneously receiving parental allowance are also being revised.
Income limit
The income threshold above which parents are no longer entitled to parental allowance is set at €200,000 taxable income for couples and single parents for births from April 1, 2024, and at €175,000 taxable income for births from April 1, 2025. For births from September 1, 2021, up to and including March 31, 2024, the income threshold is €300,000 for couples and €250,000 for single parents.
Basic parental allowance
Furthermore, the option for parents to receive basic parental allowance concurrently will be restructured for births from April 1, 2024 onwards. Simultaneous receipt of basic parental allowance will generally only be possible for a maximum of one month and only within the first twelve months of the child's life.
Premature birth
Parents of premature babies born at least six weeks before the expected delivery date, parents of twins, triplets or other multiple births, as well as parents of newborn children with disabilities and siblings with disabilities for whom they receive the sibling bonus, can continue to receive basic parental allowance unchanged as needed, especially for more than one month at a time.
New income limit for couples and single parents
The income threshold for couples and single parents is €200,000 taxable income for births from April 1, 2024, and €175,000 taxable income for births from April 1, 2025. If this threshold is exceeded, parents cannot receive parental allowance. Taxable income is distinct from gross income, which is generally significantly higher.
Why is it necessary to cut back on parental allowance?
The strict austerity measures imposed by the Federal Minister of Finance also apply to the Federal Ministry for Family Affairs. It must achieve the prescribed savings in its budget, both in the statutory parental allowance program and in discretionary spending, the so-called program budget. Parental allowance is the largest single item in the Federal Ministry for Family Affairs' budget. Therefore, its room for maneuver is very limited. The structural cuts imposed on the Federal Ministry for Family Affairs regarding parental allowance are particularly painful. The rising expenditures for parental allowance had to be curbed through a change in the law.
In order to comply with the requirements of the Federal Minister of Finance and the Federal Chancellor, the number of eligible persons will be reduced by initially setting the income limit for parental allowance at €200,000 taxable income for births from 1 April 2024 onwards and at €175,000 taxable income for births from 1 April 2025 onwards.
New regulations for parallel reference
Basic parental allowance
The option for parents to receive basic parental allowance concurrently will be restructured for births from April 1, 2024. Simultaneous receipt of basic parental allowance will generally only be possible for a maximum of one month and only within the child's first twelve months. This new regulation applies exclusively to the simultaneous receipt of basic parental allowance. As soon as one parent receives parental allowance plus, the other parent can receive basic parental allowance or parental allowance plus concurrently for longer than one month.
Maternity benefits
Months in which the mother is entitled to maternity benefits are still considered her basic parental allowance months. Basic parental allowance can generally continue to be received until the child's 14th month of life if both parents apply for parental allowance and one parent has a lower income than before. From the 13th month onward, however, one parent can only receive basic parental allowance if the other parent receives either no parental allowance or parental allowance plus during the same period.
"Premature babies" and children with disabilities
Parents of premature babies born at least six weeks before the expected delivery date, parents of twins, triplets or other multiple births, as well as parents of newborn children with disabilities and siblings with disabilities for whom they receive the sibling bonus, can continue to receive basic parental allowance unchanged as needed, especially for more than one month at a time.
This allows both parents to continue caring for their child together, particularly during the month of the child's birth. Around 50 percent of fathers who currently receive parental allowance claim it after the birth of their child. The option of jointly claiming Parental Allowance Plus supports both parents in being able to work and share childcare responsibilities. Partners are encouraged to alternate taking parental allowance months with the other parent. This new regulation aims to promote a long-term, partnership-based division of caregiving and employment between both parents.
Source: Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ), Background Information , March 28, 2024