Parental allowance: New calculation shows – this is how high the payments should really be

Parental allowance was introduced in 2007 and was designed as a wage replacement benefit. According to the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ), it is intended to secure the economic existence of families and help fathers and mothers to better combine family and work. The financial support is intended to enable parents to take time for their child. Since its introduction, however, parental allowance has not been adjusted, despite inflation and higher living costs. You can find out how much support should actually be today in the article.

Parental allowance: How much do you get?

If parents interrupt or reduce their work in order to be there for their child after the birth, the missing parental allowance should replace the income completely or at least partially. In total, parents are entitled to 14 months of parental allowance if both parents take part in childcare and the income is lost as a result, as the BMFSFJ explains. Parents can divide the months freely between themselves. One parent can claim a minimum of two and a maximum of twelve months for themselves. Single parents can claim the full 14 months of parental allowance.

How much parental allowance you receive depends on how high the income of the parent caring for the child was before the birth of the child and whether it stops after the birth. Those with a higher income receive 65 percent, while those with a lower income can receive up to 100 percent of their previous income. The financial support is between 300 euros and 1800 euros per month.

Parental allowance: How high should it actually be today?

As already mentioned, parental allowance has not been adjusted since it was introduced 17 years ago. The analysis and consulting company Prognos looked at two different approaches to find out how high it should actually be today.

1. Adjust parental allowance to inflation

Due to inflation, the value of parental allowance has declined in recent years and had to be adjusted to reflect general price developments. Based on price developments according to the Federal Statistical Office's consumer price index, the minimum amount in 2023 should have been 413 euros and the maximum amount 2,480 euros.

2. Parental allowance increased in line with the contribution assessment limits

The basis for the maximum amount of parental allowance at the time was the contribution assessment limit for general pension insurance. However, this has since risen significantly. If parental allowance were to be reinstated, the maximum amount would be 2,870 euros, according to Prognos.

Whichever approach is chosen, it is clear that parental allowance would have to be increased significantly in order to regain the value it had when it was introduced.

Parental allowance: More and more mothers and fathers receive the maximum amount

In an analysis of parental allowance statistics, Prognos found that more and more mothers and fathers are receiving the maximum amount of parental allowance. In 2009, around 14 percent of fathers and three percent of mothers had such a high income that they could receive the maximum amount. In 2021, this figure had risen to 24 percent of fathers and seven percent of mothers.

The reason: Nominal wages have risen since parental allowance was introduced, but the maximum amount of 1,800 euros has not. In 2007, the maximum amount was above the median income of families, but since 2017 it has been below it.

By the way: In order to receive parental allowance at all, you have to apply for it. The payment dates for the whole of 2024 have already been set.