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Child benefits in Germany (Kinderfreibetrag) : What are you entitled to and when?

Child benefits in Germany (Kinderfreibetrag) : What are you entitled to and when?

Life in Germany. Benefits for children in Germany. Raising a child can be very expensive to the parents, but luckily in Germany you can count on state aid. In addition to affordable childcare, there are other benefits you can claim if you have children in Germany. Here’s what you need to know:

Child allowances

Parents are entitled to child benefits for their children, and in some cases up to the age of 25. Depending on the number of children a person has, these monthly payments increase. The nearest regional Familienkasee deposits them into a parent’s bank account. Since 2021, parents receive 219 euros per month for each child up to two children, 225 euros for the third child and 250 euros for the fourth child.

Beginning January 1, 2023, this amount will increase for the first three children to 237 euros per child. While the amount given for four or more children remaining the same. Payments usually extend until the child’s 18th birthday, and sometimes even 25 years if there are additional Ausbildungskosten (educational costs) for studying at a university or vocational school. You can request these payments retroactively, but only for six months.

Child benefits in Germany: Kinderfreibetrag

If the parents receive Kindergeld, you can also receive Kinderfreibetrag (child allowance), which guarantees that the parents’ income remains tax-free up to a certain amount. Unlike Kindergeld, there is no claim involved. The Finanzamt checks whether an individual or a married couple qualifies for this supplement to Kindergeld. The tax-deductible amount for 2021 and 2022 is €5,460, which is assessed either for married couples filing their taxes together or for single individuals.

Tuition benefits for children

There are free secondary and primary schools, with a number of subsidized private schools in each state. When paying out of pocket, they can claim back up to 30% of their schooling expenses in their tax return, with a maximum of €5,000 per child per year.

Nusery / Daycare

From 2013, every child in Germany is entitled to a subsidized childcare place for any child over the age of one. For those lucky enough to get one since Germany faces a shortage of 384,000 places in nurseries and kindergartens. However, childcare options are not limited to Kita (short for Kindertagesstätte), an all-encompassing word that in Germany refers to both Krippe (ages one to three) and Kindergarten (ages three and six years). Parents have the option of placing their children in small groups with a Tagesmutter (literally, “day mother”) or Tagesvater, till about the age of three.

Each state has a subsidized rate, ranging from 23 euros per month including food in Berlin to several hundred euros in other states. Depending on the age of the child, some states charge differently for half or a full day.

Support for single parents

Germany is estimated to have approximately two million Alleinerziehende (literally “single-parents” or single parents). The government acknowledges the particularly high financial burden it bears with a special Entlastungsbetrag (tax credit). From 2021, single parents can deduct 4,008 euros from their income plus 280 euros per month for each additional child.

Single parents can in some cases deduct Unterhaltszahlungen (maintenance payments) up to 8,820 euros per year. This may include, for example, the cost of a room for the child to stay in if traveling between two separate residences. If the parent does not also receive Kindergeld or Kinderfreibetrag, is when they can claim maximum deduction.

Savings account

Approximately the first €10,000 of income is completely tax-free in Germany. Parents can create a savings account in their child’s name from birth. Up to €10,000 with interest – for example generated by a share portfolio in which their child is enrolled – is then completely tax-free. By the time their child turns 18, this can reach 180,000 euros.

Read also: German citizenship, when is my child entitled to it?
Germany: Basic child benefit Kindergrundsicherung and when will it be paid?

Source: Local