Anyone who writes down what still needs to be done before the birth of their own baby is usually sitting in front of a long list. The room must be furnished, the initial equipment purchased and the right clinic found. Financial matters should not be forgotten either, because with child and parental benefits, new mothers and fathers receive support in order to remain more economically flexible. The most important questions about parental allowance, including answers, can be found here.
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Who Is Entitled To Parental Allowance?
In principle, anyone who lives in Germany may apply for parental allowance. There are also exceptional cases in which parents who work in Germany and live in another EU country may receive parental allowance. Apart from this, living together with the baby in one household is also a prerequisite, which parents, however, fulfill with ease.
Most parents in Germany meet the requirements for parental allowance. (Source: StockSnap (CC0 license)/ pixabay.com)
In addition, the Federal Parental Allowance and Parental Leave Act also requires that eligible parents raise or care for their child themselves and do not work more than thirty hours per week. Only parents in training, students and childminders and in the context of the voluntary social year are not subject to this regulation. If you are unsure about your own requirements, it is best to seek advice from a parental allowance office in good time.
What Documents Are Required For The Application?
In order to receive parental allowance, a fully completed application including additional documents must be submitted to the responsible parental allowance office. Documents that must not be missing here are:
– The child’s birth certificate (copy for parental allowance purposes).
– Copies of the parental identity cards or passports.
– The notification of maternity allowance.
– Proof of income from the assessment period.
– As well as proof of parental leave.
Additional documents may also be required. Expectant parents can find a comprehensive checklist on this topic at familien-wegweiser.de.
When Must Parental Allowance Be Applied For?
Parental allowance can only be applied for once the baby is born. Since payments can only be made retroactively for three months, timely action is important to avoid financial gaps. Parents should therefore submit their application no later than when the baby is four months old. It is highly recommended to fill out the application during pregnancy and to collect all necessary documents in a folder. After all, there is not always enough time to deal with administrative tasks after the birth.
How Is Parental Benefit Calculated?
For the calculation of the parental allowance, the so-called parental allowance net of the parent who submits the application is relevant. The assessment period is the last twelve months before the birth. The final amount of the parental allowance depends on the calculated net parental allowance. However, parents receive a minimum of 300 euros. The maximum amount is 1,800 euros net. Expressed as a percentage, the parental allowance makes up between 65 and 100 percent of the previous monthly income. You can calculate what this means for your own situation here.
Siblings are taken into account when calculating parental allowance. (Source: sathyatripodi (CC0 license)/ pixabay.com)
Additionally relevant for the calculation are also possible siblings. They can increase the amount of the parental allowance, since the financial needs of a family also increase with an increasing number of children.
Which Options Are Available?
For a long time, only the so-called basic parental allowance existed. Since 2015, however, parental allowance has been reformed and supplemented with additional options. Since then, couples have also been able to claim ElterngeldPlus and partnership bonuses. ElterngeldPlus was introduced to support working parents and ease their way back into the workforce.
Fathers benefit from the new ElterngeldPlus scheme. (Source: HeatherDawnKemp (CC0 license)/ pixabay.com)
What makes more sense can only be found out when one’s own plans are fixed. It is also possible to choose combinations and thus significantly extend the reference period. For fathers in particular, however, the introduction of ElterngeldPlus seems to have been a blessing. As the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth notes in a briefing, more and more fathers are getting involved during parental leave and claiming parental allowance benefits.
Over What Period Does The Parental Allowance Flow?
A distinction must be made here between basic parental allowance and parental allowance plus. In the case of basic parental allowance, the reference period is around twelve months, although couples can also claim 14 months if one of them also takes at least two months’ parental leave. With ElterngeldPlus, the monthly payments are halved, while the reference period is doubled. In theory, parental allowance is paid for 28 months. Those who also take advantage of the partnership bonus can extend the period to a total of 36 months. Here it is important to check the exact requirements and develop a plan that best meets your own needs. Expert advice can also help to find the best solution.
Does Parental Benefit Have To Be Taxed?
In principle, parental allowance is tax-free. Parents therefore do not have to pay tax on it directly. However, one important point that should not be forgotten here is the so-called progression proviso. Thus, the parental allowance increases a couple’s taxable income and can ultimately lead to an increase in the tax rate. It is therefore quite possible that couples will have to pay more taxes despite the tax-free nature of the parental allowance. For this reason, experts recommend building up reserves while receiving parental allowance, which can be used to service a possible additional tax payment.