Not everyone benefits: the Corona child bonus is coming

In September the time has come: the Corona child bonus is on the account. The family funds gradually pay out the state premium to parents in Germany. The government speaks of 300 euros per child. But not all receive the full amount.

From this Monday on, the parents of around 18 million children in Germany will receive an extra 300 euros. The Union and SPD decided on this child bonus in June with their economic stimulus package. It is one of the means the government is using to mitigate the consequences of the corona crisis. Why not everyone benefits from the full amount – and why business-oriented researchers find the bonus a good one:

How does the money get to the parents?
From September 7th, the family benefits office will start paying out. In September, 200 euros are to be paid out initially, and then another 100 euros in October. The child bonus does not have to be applied for; It is paid out automatically. Prerequisite: A child must have received child benefit for at least one month in 2020. The child bonus is not paid out together with the child benefit, but as a separate payment. When the actual payment is made depends on the final digit of the child benefit number. If that is a zero, you belong to the first, the rest follows gradually.

What if a child isn't born until December, for example?
Then there is also the child bonus. Payments are also made if there is no longer any entitlement to child benefit in September, for example because the child completed their education in July. If you are not entitled to child benefit in September but for other months of 2020, the bonus may be paid out later.

What do the parents want to do with the child bonus?
61 percent of the recipients want to spend part or all of the bonus – this is shown by a survey commissioned by the Institut der Deutschen Wirtschaft (IW). 24 percent of respondents say that they will spend the child bonus in full. 37 percent want to do this partially. 39 percent want to save the child bonus completely. In the top income group, 45 percent have no plans to spend the money, in the middle only 34 percent. In the lowest, 39 percent want to save it first.

Can high-income parents also keep the bonus in full?
No. It is offset against the child allowance in the tax as well as the child benefit. The higher the income, the less there is, depending on the income level and family constellation. Eight out of ten eligible families should benefit fully – for example, a couple with three children with an annual income of up to around 67,800 euros. If you have a higher income, there is less left over, from 106,000 euros nothing more. In the case of married parents with one child, from an annual income of € 86,000, nothing remains of the bonus. The bonus is not offset against Hartz IV or maintenance advance payments, the payments continue as normal.

Is there always 300 euros more left over for single parents?
No. It is true that the single parent who receives the child benefit also receives the bonus. But if the other parent pays child support, they can deduct half of the bonus from it. The Association of Single Mothers and Fathers criticizes this. Many single parents should have brought home office and homeschooling under one roof and were concerned about their existence, says chairwoman Daniela Jaspers. "The child bonus is needed where the child has their center of life."

Is there any other criticism of the child bonus?
Yes. "The child bonus is not very targeted and also benefits families who are not financially dependent on it," complains the family expert at the German Institute for Economic Research, Katharina Spieß. For others it is not enough. The billions for the bonus are only used once.

What is praised about the child bonus from an economic point of view?
According to the business-related institute IW, around 2.3 billion of the 4.3 billion euros that the child bonus costs the state should end up with companies. Because on average for all recipients, around 128 euros per child quickly flow into consumption, the experts have calculated on the basis of their survey. The IW states that the bonus could thus support the economic upturn. According to the union-affiliated Hans Böckler Foundation, the value added tax, which was also lowered with the economic stimulus package, has only a manageable effect on consumption and the economy. A higher child bonus or more short-time working allowance would have had greater effects.

Is the child bonus actually a new idea?
No. Review of the financial and economic crisis more than ten years ago: On Sunday, January 4, 2009, the SPD made a surprising push for a € 40 billion stimulus package. Frank-Walter Steinmeier, then Vice Chancellor and SPD candidate for chancellor, presented the plans to Chancellor Angela Merkel (CDU) one day before a top coalition meeting in the Chancellery. Included in the plans: a child bonus of 200 euros. With the initially skeptical Union, the SPD then agreed on 100 euros per child. These were paid nationwide between April and June 2009.

. (tagsToTranslate) Economy (t) Corona crisis (t) Coronavirus (t) Child benefit