Chancellor Angela Merkel’s conservative Christian Democrats and the pro-business Free Democrats reportedly agree on boosting direct benefits and tax exemptions, but are negotiating whether FDP campaign plans to raise monthly Kindergeld payments of €164 to €200 per child are appropriate given budgetary concerns.
But a single increase of Germany’s tax exemption for dependent children is not enough, CDU family policy spokesperson Johannes Singhammer told the paper. “It’s also essential to increase child benefits,” he said. “We need an integrated increase in family policies.”
According to inside sources, both the CDU and the FDP have already agreed to increase yearly tax exemptions from €6,024 to €8,004 – which will cost the government some €3 billion. If per-child benefits increase to €200 each month, the combined increases will cost some €7 billion, the paper reported.
Special interest groups also warned the paper that raising tax write-offs alone would divide high and low income parents. Only single parents who earn more than €38,800 per year, or couples who together earn €74,700 would benefit from higher tax exemptions, the paper reported.
News magazine Der Spiegel reported on Thursday that the incoming coalition is grappling with how to plug major budgetary shortfalls making both the proposed child benefit increases and the FDP’s promised tax cuts difficult to finance.