In the dispute between the Greens and the FDP over the financing of the planned basic child security, Family Minister Lisa Paus has proposed a reduction in child allowances. “It is absurd that wealthy families are relieved much more of the child allowance than poorer families who only receive child benefit,” said the Green politician of the “Neue Osnabrücker Zeitung”.
The minister spoke out in favor of lowering the allowances and using the resulting additional tax revenue to finance part of the basic child security. “It would be a breakthrough to finally eliminate this injustice in the system,” she said.
The background is a complex regulation in the German tax system: Parents currently receive 250 euros per child per month from the state. At the same time, there are the so-called child allowances. When calculating the tax, these are deducted from the income, so that the tax burden is reduced.
How is charged?
The tax office automatically determines whether child benefit or allowances are more worthwhile for the parents. If it is the allowance, it will be offset against the child benefit that has already been paid out. Top earners benefit from this: Your tax savings are greater than the sum of the child benefit paid out.
The traffic light coalition has agreed to bundle services from child benefit and child allowance to financial support for school trips in a basic child security system and to reach more beneficiaries with the services in the future. Whether that should also mean a multi-billion dollar financial increase is disputed, especially between the Greens and the FDP. Paus had registered a need of twelve billion euros.
