Corona parental allowance: Short-time work leads to losses

According to the current legal situation, the corona crisis unfortunately has a negative impact on the financial provision of families. Expectant parents who now have to work short-time due to the crisis or are in the immediate vicinity are at great risk of losing parental benefits. Here we explain why short-time working has a negative impact on parental allowance and show possible areas of action to protect the right to parental allowance.

What is short-time allowance?

In short-time work, the salary of the employees affected is reduced due to the loss of work. In order to at least partially compensate for the loss of income, the Federal Employment Agency grants the so-called "short-time allowance". It amounts to 60% (or if there are children 67%) of the net wages lost due to short-time work.

What does short-time work mean for the calculation of parental allowance?

  • Expectant parents who are employed and who want to earn as much as possible before the birth of their child are particularly hard hit in order to receive the highest possible parental allowance after birth. Because the The amount of the parental allowance is calculated on the basis of the average net income in the so-called assessment period. This applies to the last twelve months before birth or, in the case of expectant mothers, the last twelve months before the start of the maternity leave period. The parental allowance then comprises between 65% and 100% of the net income, although it is at least € 300 and a maximum of € 1,800.
  • Short-time working helps employers to secure the continued existence of their company and thus jobs in the Corona crisis. But this is exactly where the problem lies for expectant parents. Because for the calculation of the parental allowance only "earned income" is taken into account in the assessment period. Short-time work benefits are, however, "wage replacement benefits" – and these do not count towards the calculation of parental benefit.
  • In a nutshell: Months of short-time work lead to a lower "earned income" and thus automatically reduce the entitlement to parental allowance. The short-time work allowance granted by the state cannot compensate for this disadvantage, since this is not a "earned income" but a "compensation for wages". Depending on the extent of the short-time work, this can quickly result in several hundreds to thousands of euros in parental allowance losses!

A much simplified one for better understanding Calculation example:

Employee Sabrina is pregnant and earns a constant net amount of € 2,000 during the assessment period. Her maternity protection period before birth begins in August 2020. Due to the Corona crisis, she has to work short-time for May and June 2020, because her employer has to close completely during this period (this is "short-time work zero"). In the short-time working months, she receives 60% of € 2,000, i.e. € 1,200 short-time allowance.

Simplified calculation of parental benefit entitlement:

Month (assessment period)

without short-time work

with short-time work

August 2019

€ 2,000

€ 2,000

September 2019

€ 2,000

€ 2,000

October 2019

€ 2,000

€ 2,000

November 2019

€ 2,000

€ 2,000

December 2019

€ 2,000

€ 2,000

January 2020

€ 2,000

€ 2,000

February 2020

€ 2,000

€ 2,000

March 2020

€ 2,000

€ 2,000

April 2020

€ 2,000

€ 2,000

May 2020

€ 2,000

0 € (short-time work allowance is not taken into account!)

June 2020

€ 2,000

0 € (short-time work allowance is not taken into account!)

July 2020

€ 2,000

€ 2,000

monthly average

€ 2,000

€ 1,667

of which 65% parental allowance

€ 1,300

€ 1,083

In the case of Sabrina, this means € 217 less parental allowance (base parent field) per month due to short-time work. This is for the regular subscription period of 12 months (= most common case for mothers) € 2,604 less parental allowance!

The example illustrates the drastic financial impact that short-time work can have on parental benefits.

Corona crisis & parental allowance: This is how politics reacts

The problem has already been recognized at the political level; after all, according to the Federal Employment Agency, 500,000 employees are ready for short-time work (as of April 1, 2020). A binding solution from the state is still pending. The Federal Minister for Family Affairs, Ms. Giffey, only announced in a press conference at the end of March that she had recommended that the federal states compensate for the disadvantages described. The compensation is to be made by excluding the pandemic period from the assessment period. However, there is still no binding regulation. In addition, it is not certain that the excluded pandemic period corresponds to the individual short-time working period of the parents concerned. Workers who are about to become parents should therefore continue to be advised to consider alternative options together with their employer.

Expert tips for expectant parents

If short-time work is imminent, a discussion with the employer should be sought and the disadvantageous situation with parental allowance explained. Many employers (especially in smaller companies) are not even aware of the effects short-time work benefits can have for expectant parents. Experience shows that common solutions can often be found. The following options may include: B. offer to reduce short-time work to a minimum or even avoid it altogether:

  • Reduce overtime
  • Take vacation
  • Short-time work only for one as short as possible Agree period
  • check whether the pregnant woman may have a ban on employment

Corona crisis & parental allowance: conclusion

According to the (still) current legal situation Short-time work negatively affects the amount of parental allowance. Expectant parents should therefore inform their employer of this problem and seek an interview. Solutions can often be found to reduce or even avoid short-time work. It is to be hoped that politicians will react to the described unpleasant effects of short-time work and that the calculation of parental allowance will legally exclude short-time months due to the corona pandemic.

Authors: Jochen Breitenbach (tax consultant & lawyer), Michael Ferstl (tax consultant) and Christian Wenzel-Hofmann (business economist) from "Elterngeld made easy!"