Child bonus in Germany. Hartz IV and Child benefit. The German government has signalled it’s intention to raise child benefit in response to the high inflation rate. Family Minister Lisa Paus said the intention is aimed to relieve poor families from raising energy bills.
Last week the Federal Labour Minister, Hubertus Heil, announced the hike in Hartz IV (basic subsistence) as part of a major shakeup of the system that will see the Hartz IV benefit replaced with a new “citizen’s allowance”.
Heil explained the previous mechanism for calculating subsistence benefit rates lagged too far behind price development, resulting in recipients struggling to make ends meet.
It was not revealed how much more would be offered, but it is estimated to be around 10 percent or 40 to 50 euros more per person per month.
READ MORE: Germany: Changes to the child bonus and child benefit in 2022
Currently the draft law for the new citizen’s allowance is being drawn up, and is expected to be released sometime in summer. The intention is to make the systems less bureaucratic and ensure individuals are protected from poverty.
In addition, Federal Family Minister Lisa Paus promised extra relief for families, and suggested the government raise child benefits in line with inflation to “support (poorer) families in a targeted manner.”
Long-term, the traffic light government is planning to bundle together various financial incentives available to parents in Germany – including child benefits, allowances and maintenance payments- aimed to create a new “basic child security”. Which is expected to be paid by 2025.
“In the short term, we will primarily be talking about adjusting child benefits,” Paus said, adding that she expected the government to discuss policies on taxation and higher standard child benefit rates in autumn.