Elterngeld / Parental Allowance in Germany
Germany has a long tradition of creating and maintaining strong social programs. Even given its exceptional social commitment throughout its history, Germany currently has an extremely low birth rate (1.3 births per women). This fact keeps the "family debates" alive and well in the Bundestag (Lower House of German Parliament), which leaves politicians constantly scrambling to find ways to promote larger families and a closer balanced birth/mortality ratio. Germany's ideal birthrate would be 2.1 births per German woman, which would maintain a healthy population level, albeit, without any further immigration, (which seems to be very unlikely).
Elterngeld is funded by the federal tax system and replaced, on January 01, 2007, the pre-existing Erzeihungsgeld or Parenting Allowance. This is not a permanent subsidy while it is limited to the first 12 or 14 months following the child's birth. The amount of the Elterngeld is based on the after taxes income of the parent dedicated to caring for the newborn and is to be viewed as a limited income subsidy. The Germans have adopted a clause based on the Scandinavian system - which allows for both parents to exercise their right to time off with their new born and to receive Elterngeld, too - by sharing the allocated "Elterngeld time" (12-14 months total).
Who Can Get Elterngeld?
- Employed, self-employed and bureaucrats
- Unemployed parents
- Students and apprentices
- Parents of adoptive children
Eligibility for Elterngeld
You should be eligible for Elterngeld if you fulfill the following criteria:
- Have a residence in Germany or an Aufenthaltserlaubnis (residence permit) that allows you to work in Germany
- You and your child reside together
- You care and rear your child personally
- You do not work more than 30 hours per week during the time Elterngeld is issued
How Much Is It?
So many expecting families at the end of 2006 were hoping for a birth in 2007 so as to take advantage of the new Elterngeld changes. Professionals with high salaries and a keen interest in taking time off for child rearing were particularly hoping for a 2007 Glückskind, and this is why:
- The Elterngeld amount is 67% of the applying parent's after tax earnings, averaged over 12 months before the child's birth
- Maximum amount monthly is 1,800 EURO
- Minimum amount issued to eligible applicants is 300 EURO (even for unemployed parents)
- For each multiple birth, 300 EURO per child issued.
As generous as all this sounds, there are still a few factors of which need to be aware. Any income earned during the Elternzeit will most likely be calculated against your Elterngeld and will therefore lower your Elterngeld payment. The same applies for Mutterschaftsgeld, or any social support received by the Federal or Bundesland authorities. Contact the proper authorities for more details.
For families that already have children an additional 10% of the Elterngeld is paid or a minimum amount of 75 EURO monthly as a "sibling bonus". The requirements for multi-child families are:
- For 2 children, they have to be under 4 years of age
- For 3 children, they have to be under 7 years of age.
How Long is Elterngeld Paid?
Single parents that qualify will receive a total of 14 months of Elterngeld. For parents jointly rearing their newborn, they can receive 12 months of Elterngeld for the designated partner caring for the child and can receive an additional 2 months of Elterngeld for the other partner, but only when they reduce their hours of work to less than 30 per week. Partners that want to split the Elterngeld as they wish may do so, but only 12 months will be paid. It is also possible to reduce the Elterngeld by 50% and have it paid over twice the amount of time outlined above.