Income limit for parental allowance to fall gradually
Parental allowance is to be abolished for high earners from next year - albeit with different key figures than previously planned.
The income limit is not to fall suddenly, but gradually, as the German Press Agency learned from the Budget Committee meeting. Until the end of March, the limit is to remain at 300,000 euros taxable annual income, then fall to 200,000 euros by the end of the year. From April 2025, an income limit of 175,000 euros is to apply.
Family Minister Lisa Paus (Greens) had decided to abolish parental allowance for couples with particularly high incomes. According to her proposal, it should only be paid to parents who have an annual taxable income of no more than 150,000 euros, either alone or together. Currently, the limit is 250,000 euros for single parents and 300,000 for couples.
"We are reversing cuts to parental allowance and creating stronger incentives for more partnership," explained SPD householder Felix Döring. Families would be given more time to adjust to the changes.
In addition, couples will still be able to take up to 14 months of parental leave together - but only for a maximum of one month at a time. At least one of the partner months must be taken alone. This must also be within the child's first year of life. The change will not apply to multiple births.
The proposed change in the income limit for parental allowance impacts households with high earnings, as families with a taxable annual income above 175,000 euros from April 2025 will no longer qualify for parental allowance. During parental leave, it's important to note that German families can still take up to 14 months of leave together, although they can only do so for a maximum of one month at a time, with at least one partner taking leave individually and within the child's first year.
Source: www.dpa.com
