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What benefits are you entitled to if you have children in Germany?

Rachel Stern
Rachel Stern - [email protected] • 5 Nov, 2022 Updated Sat 5 Nov 2022 09:05 CEST
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A father and daughter balance on a wall on the Maschsee in Hanover in October. Photo: picture alliance/dpa | Swen Pförtner

Having children is a costly business, but luckily in Germany, there is help. As well as affordable childcare, there are other benefits you can claim if you have children in Germany. Here are the details.

Child benefits

Every parent in Germany qualifies for child benefit payments (Kindergeld) for their offspring, in some cases up until the age of 25. These monthly payments also go up depending on the number of kids a person has. The nearest regional Familienkasee deposits them into the bank account of one parent.

So just how much can parents expect to receive? Since 2021, parents receive €219 per month for each child up to two kids, €225 for a third child and €250 for the fourth child. 

From January 1st, 2023, this will be increased to €237 per child for the first three children. The amount given for four or more children will remain the same.

The payments usually stretch until the child’s 18th birthday, and sometimes even their 25th if there are extra Ausbildungskosten (educational costs) for studying at a university or vocational school.

You can retroactively claim these payments, but only stretching back six months.

Kinderfreibetrag

If parents receive Kindergeld, you also claim a Kinderfreibetrag (child allowance), which guarantees that the parents’ income remains tax free up to a certain amount. 

Unlike with Kindergeld, there’s no application involved - rather the Finanzamt inspects with the so-called Günstigerprüfung (cheaper check) as to whether an individual or married couple qualifies for a top-up to the Kindergeld they receive.

For 2021 and 2022, the tax deductible amount comes to €5,460, which is either assessed for married couples filing their taxes together or single people.

Daycare

Since 2013, every child in Germany has been entitled to a subsidised daycare spot for any child over the age of one. This is at least for those lucky enough to snag one, as Germany is facing a shortage of 384,000 spots by 2023.

A kita in Hanover. picture alliance/dpa/Fellowes GmbH | Fellowes GmbH

However, daycare options aren’t just in the Kita (short for Kindertagesstätte), an all-encompassing word which in Germany refers to both the Krippe (ages one to three) and the Kindergarten (ages three to six). Parents can also elect to place their child in a small group with a Tagesmutter (literally, "day mother") or Tagesvater, usually up until the age of three.

All of these rates are subsidized state by state, ranging from €23 per month including food in Berlin to several hundreds of euros in other states. Some states also charge different rates for half or full day care, or based on the age of the child.

READ ALSO: How much does child care cost across Germany?

Schooling benefits

Secondary and primary schools are also free of charge, with a number of subsidised private schools in every state. For many of these parents they pay proportional to their income.

Whatever the cost, when they pay out of pocket, they can claim back up to 30 percent of tuition expenses on their tax return, at a maximum of €5,000 per child per year.

EXPLAINED: What foreign parents should know about German schools

Single Parents

There are about two million Alleinerziehende (literally 'those raising children alone', or single parents) in Germany

The government recognises the particularly high financial burden they also bear with a special Entlastungsbetrag (tax credit). As of 2021, single parents can deduct €4,008 from their income plus €280 a month for each additional child.

A mother and child

A mother looks after her child while working from home. There are many sources of financial help available for single and low-income parents in Germany. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

In some cases, single parents can also deduct Unterhaltszahlungen (maintenance payments) of up to €8,820 per year. This could include, for example, the cost of a room for the child to stay in if they travel between two separate residences. 

But the maximum deduction can only be claimed if the parent is not also receiving Kindergeld or the Kinderfreibetrag.

Savings account

In Germany, around the first €10,000 of income is completely tax free. Most parents, however, assume that this can only benefit them directly, and not their offspring. 

Yet starting from birth, parents can actually set up a savings account in their child's name.

Up to €10,000 of interest - for example that a stock portfolio their child is enrolled in generates - is then completely tax free. In a best case scenario, this can amount to €180,000 by their child’s 18th birthday.

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Rachel Stern 2022/11/05 09:05

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