Parental allowance compensates for the loss of net income for the parent looking after the child. The rate at which the allowance is paid is calculated based on the amount of income before the birth of the child:
- Net income over €1,240 = replacement rate 65%,
- Net income between €1,000 and €1,200 = replacement rate 67%
(Net income between €1,200 and €1,240 gradual reduction to 65%)
- Net income lower than €1,000 = replacement rate increases gradually to 100%.
The parental allowance amounts to a minimum of €300 and a maximum of €1,800.
For multiple births, the parental allowance increases by €300 for each additional child. Families with an older child under 3 years of age (or 2 older children both under 6 years old) benefit from a sibling bonus.
The basic parental allowance can be claimed within the first 14 months of the child’s life.
A parent can receive parental allowance for a minimum of two and a maximum of twelve months. The parents have an additional two months if both parents use the parental allowance and they lose at least two months’ pay.
The parents can share the monthly allowance freely between themselves. They can receive parental allowance one after the other or at the same time.
Whilst claiming parental allowance, it is possible to work part time for up to 32 hours per week.
Parental benefit is generally counted as full income for the following social benefits:
- Unemployment benefit II (Bürgergeld)
- Social assistance (Sozialhilfe)
- Child supplement (Kinderzuschlag)
However, parents receive an amount that is not offset against social benefits if they earned income before the birth. The amount of parental allowance that is not taken into account corresponds to the income before the birth of the child and amounts to a maximum of € 300. Up to this amount, the parental allowance is not offset against the above-mentioned benefits.
Entitlement to parental allowance ceases if the entitled person had a taxable income of more than € 250,000 in the calendar year before the birth of the child (or the sum of the taxable income of both entitled persons exceeds € 300,000).
