Starting January 2025, families across Germany will see their monthly child benefit, known as Kindergeld, increase by five euros, bringing the total to 255 euros per child. This increase is part of the government’s broader strategy to support families amid rising living costs and inflation. The German Federal Ministry of Finance estimates this adjustment will cost the state around 790 million euros annually.
Alongside the increase in Kindergeld, significant changes are also being made to the child tax allowance. From January 2025, the tax-free child allowance will rise by 60 euros, totaling 6,672 euros. This rise is only the first of two adjustments, as the allowance will increase again by 156 euros to 6,828 euros by January 2026. These changes reflect the government's commitment to provide substantial financial relief to families.
A large portion of the support will also flow to lower-income families through the provision of the immediate child supplement, or Sofortzuschlag, which will increase from 20 euros to 25 euros per month for families receiving social benefits or asylum support.
According to a report by Deutsche Presse-Agentur (dpa), for a family with two children earning 60,000 euros annually, these changes will result in about 306 euros less tax burden for the year 2025. Families with three children will see even more significant increases, as the total monthly assistance could reach 765 euros.
When do families receive the enhanced child benefit? Payment timelines vary based on the last digit of the family's Kindergeld number. Families whose numbers end with 0 or 1 can expect payments as early as January 8, 2025. For those with higher end digits, the payment dates stretch until late January. The staggered payments are reportedly due to technical reasons and will be paid on the same day as the Kinderzuschlag.
The rise in Kindergeld and child tax allowance is part of the Steuerfortentwicklungsgesetz, which aims to counter inflation’s impact on households and provide financial security for children. For families with multiple children, these amounts can significantly contribute to easing household budgets.
While these changes are lauded by many, they come amid plans for the introduction of child benefits based on the newly proposed child basic security system, which was recently put on hold. The Family Ministry noted the initiative will not be implemented during the current legislative period, focusing instead on enhancing existing support measures like Kindergeld.
Parents must still apply for the Kindergeld through the family benefits office (Familienkasse), where they can submit applications online and even request retroactive payments for up to six months prior to their application. The tax office will automatically perform checks to determine whether the child allowance would provide greater benefit than receiving direct child allowance payments.
Despite the optimism surrounding these adjustments, some researchers, like those from the Institute of the German Economy, warn these increases may not fully neutralize the financial strain on families, particularly those already struggling with inflation.
The measures, including the rise of Kindergeld, aim to bolster the financial stability of families and minimize child poverty. The government will continue to monitor the effects of these changes and adjust strategies as needed to support families effectively.