The new law will probably come into effect in 2024
The federal government saves hundreds of millions in parental benefits for higher earners
08/11/2023, 12:35 p.m
Finance Minister Lindner calls for savings, and Family Minister Paus also delivers. When it comes to parental allowance, higher earners should fall through the cracks in the future. According to one draft, the federal government will save hundreds of millions of euros in the coming years. When the law comes.
The federal government could save up to 500 million euros a year with the planned cuts in parental allowance. This emerges from a draft of the so-called Budget Financing Act, which is available to the German Press Agency. Accordingly, the lowering of the income limit in the coming year would already lead to savings of 150 million euros. In 2025 it would be 400 million euros, and then 500 million euros in the following years.
Due to the tense budgetary situation, the federal government has agreed to cut back on parental allowance. The state pays this wage replacement benefit if parents stay at home after the birth of their children. In future, however, top earners should no longer receive anything, only parents who together have no more than 150,000 euros in taxable income per year. Previously, this limit was 300,000 euros. The change should apply to all children born after January 1, 2024.
There has been heavy criticism of the cut plans. According to Federal Family Minister Lisa Paus, around 60,000 families would no longer be entitled to parental allowance. The reduction would be implemented with the resolution of the Budget Financing Act. However, it still has to be waved through in the cabinet and discussed and voted on in the Bundestag.