No fathers’ time off in sight
What will change with parental allowance on April 1st
March 29, 2024, 1:14 p.m
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Thousands of couples in Germany will not receive parental allowance in the future. Why is that? And what’s the deal with the so-called fathers’ time off that the federal government has promised families in the country? The most important questions and answers at a glance:
What exactly will change with parental allowance from April 1st?
Due to the difficult budget situation, the federal government is forced to make savings in every corner – including parental allowance, the largest financial item in the Family Ministry’s budget. For births from April 1st of this year, the income limit for receiving parental allowance will change. From then on, couples are only entitled to parental allowance up to a taxable annual income of 200,000 euros.
From April 1, 2025 it will be even stricter: then the threshold will drop to 175,000 euros. This means that parents who exceed this amount no longer have any entitlement. So far, the entitlement has been much more generous: only couples with an upper income limit of 300,000 euros do not receive parental allowance. The taxable income results from the gross income less business expenses, other expenses and tax allowances. So it is always lower than the gross income.
How many families are affected by the changed income limits?
According to “rough estimates” from the Family Ministry, the maximum limit of 200,000 euros affects around 7,000 couples in Germany. This corresponds to 0.5 percent of all parents who currently receive parental allowance, says Lisa Paus’s ministry. The further reduction to 175,000 euros is estimated to affect around 20,000 couples. The ministry initially did not provide an estimate of this kind for single parents. In the future, the same upper limits will apply to them as to couples.
Are there also reductions in the amount of parental allowance?
No. As before, the amount of parental allowance depends on how much income the respective parent had before the birth of the child. Parents with higher incomes receive 65 percent, parents with lower incomes receive up to 100 percent of their previous income. Everyone receives the minimum amount of 300 euros – even if they had no income before. The maximum monthly parental allowance amount is 1,800 euros.
Can couples continue to receive parental allowance at the same time?
Yes, but with a clear restriction. According to the new regulation, which also comes into force on April 1st, both parents can only receive parental allowance for one month at the same time in the first twelve months of the child’s life. Up to now, up to seven parallel subscription months were possible. However, there are also exceptions to the limit, for example for parents of children born particularly prematurely, of multiple births and/or children with disabilities.
The Ministry of Family Affairs sees the new regulation as a contribution to a partnership-based distribution of care work. When asked, it makes sense from “equality policy aspects” for partners to take turns receiving parental allowance. The federal government also wants to promote the employment of both parents in the long term.
Will fathers be able to take temporary paid time off after the birth without parental benefit in the future?
To the dismay of many new families, this has so far only been possible if the fathers take vacation. Unlike mothers, they do not receive any wage replacement benefits such as maternity benefit after the birth of a child. The federal government actually wanted to have a regulation in place long ago that would ensure more free time together after the birth. The regulation that became known as “fathers’ time out” and is now also called “family start time” is still a long time coming.
It is also written in black and white in the coalition agreement: “We will introduce two weeks of paid leave for partners after the birth of a child.” According to the Family Ministry, the corresponding draft law is still being voted on within the federal government – this has been the case for months.
Do employers accommodate fathers?
Some companies make generous regulations regardless of legislation. For example, the company Henkel, which has announced that it will allow its employees eight weeks of fully paid parental leave from 2024. The software company SAP also wanted to give its fathers a six-week paid break – but has now finally backtracked, citing problems in implementation.
The employers’ association BDA believes that statutory fathers’ time off is unnecessary. The previous instrument of parental allowance has proven itself, it is said upon request. The association fears a “one-sided financial burden for companies”. Coalition circles say that the costs of the planned fathers’ leave should be “covered by all employers” via the existing maternity pay allocation process. It is still unclear whether this will happen.
How are the federal government’s family policy measures being received?
There is criticism from various corners – not just from wealthy parents who feel that the loss of entitlement to parental allowance is unfair. “Any form of reduction in parental allowance” points in the wrong direction, says Anja Weusthoff, deputy chairwoman of the German Women’s Council, for example. It is reasonable to assume that “the government wants to make parental allowance less attractive for fathers by restricting parallel receipt.” Weusthoff sees the fact that the announced fathers’ time off has not yet been implemented as a “bitter disappointment”.
Union politician Silvia Breher sees it a little differently. The family policy spokeswoman for her parliamentary group in the Bundestag fears, like the BDA, that fathers’ time off will place a “massive burden” on small and medium-sized companies. Breher is also not happy about the changes to parental allowance: the funding cuts are a “quick shot in family policy” and “not well thought out”. The traffic light government is acting “irresponsibly” and is contributing to “families losing trust in politics as a whole,” says Breher.