Household agreement - Child benefit is to increase by an additional four Euros in 2026.
The Child Benefit is set to increase by an additional four Euro to 259 Euro per month for each child as of January 1, 2026. This information comes from a document accompanying the federal budget proposal, obtained by the German Press Agency (dpa), which the "Welt" newspaper reported on earlier. The document states, "The Child Benefit will be raised by an additional four Euro, from 255 Euro to 259 Euro per month for each child," according to the report.
Significant increase in Child Benefit since 2022
The Child Benefit was significantly increased as of January 1, 2023. Previously, families received only 219 Euro for the first and second child. Therefore, there will be an increase of 40 Euro for the first two children starting in 2026.
The Child Benefit increase will be implemented in the second tax code amendment, according to dpa reports, which is expected to be passed in the cabinet in July. In this bill, the gradual increase of the child tax allowance from 6612 Euro in this year to 6672 Euro in the next and then to 6828 Euro in 2026 is also stipulated. When the separate tax allowance for the care and education needs of children is added, the tax allowance will increase to a total of 9600 Euro in 2025 and 9756 Euro in 2026.
The increase in the Child Tax Allowance, like the increase in the Child Benefit, is part of the budget agreement of the federal government, which the cabinet formally adopted on this Wednesday. The goal is to raise the Child Benefit and the Child Tax Allowance in parallel after 2026.
Child Tax Allowance and Child Benefit relevant for tax burden
The Child Tax Allowance is relevant because it can represent a tax relief for the expenses incurred by families due to children. It is deducted from the taxable income of the parents. When it increases, the income on which taxes are levied - and thus the tax burden of the parents - decreases. However, it is important to note that Child Benefit and Child Tax Allowance are linked, and only one of them can be claimed tax-exempt. The tax office automatically determines which one is more advantageous for the parents.
The additional four Euro increase in Child Benefit is a result of the recently proposed federal budget, as reported by the German Press Agency. This means that beginning January 1, 2026, German families will receive 259 Euro per month for each child, up from the previous 255 Euro. This change in Child Benefit is part of the budget agreement adopted by the federal government. Furthermore, the increase in Child Benefit is not isolated, as it also includes a gradual increase in the Child Tax Allowance, from 6612 Euro in the current year to 6828 Euro in 2026. This combined adjustment in Child Benefit and Child Tax Allowance is aimed at lessening the tax burden for families with children in Berlin and across Germany.
