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Germany's 300-euro child bonus: What you need to know

Germany's 300-euro child bonus: What you need to know

Germany's 300-euro child bonus: What you need to know

The German government is planning a massive 130-billion euro stimulus package to reboot the economy. One of its cornerstone policies is a one-off bonus of 300 euros per child. But who will actually receive the bonus? And do you have to apply for it? Here’s an overview. 

Explained: The one-off coronavirus child bonus in Germany

The idea is simple: families in Germany should all receive a one-off payment of 300 euros per child. It has been styled as a kind of “thank you gift” to the millions of parents who, after the closures of kindergartens and schools across the country, had to take over childcare and teaching responsibilities - disrupting their working lives and causing a fair amount of stress. 

The CSU / CDU union and the SPD are hoping that families will spend the bonus as quickly as possible and, in so doing, help to boost the economy. But how exactly does the cash benefit work? 

How much is the child bonus? 

The children’s bonus is a one-off payment of 300 euros per child. It will be transferred along with your regular child benefit, in three instalments of 100 euros each. 

Who gets the children’s bonus? 

The child bonus will be paid for each child for whom parents receive child benefit. This means that legal guardians who live with the child in a household are also entitled to it - this could be parents, step-parents, foster parents or grandparents.

Do high-income families also receive the bonus?

In theory, yes. In practice, however, families will only benefit from the bonus up to a certain income limit. This is because every year when you submit your income tax return, the tax office checks whether your family would be better off with child benefit (Kindgeld) payments, or if you made use of the so-called child allowance (Kinderfreibetrag) - which currently allows you to deduct up to 7.812 euros from taxation

From a certain income upwards, the tax savings you get from the tax-free allowance are greater than the total sum of child benefit payments. The new child bonus shifts this income limit (after which the tax allowance becomes more beneficial than the benefit) - from 67.816 euros of taxable income per year for married parents with one child, to 85.936 euros. 

The more children you have, the further the threshold increases. For parents with two children, for instance, it’s 93.758 euros of taxable income. Parents who have a combined income above this threshold will not have any additional benefit from the child bonus - but, thanks to tax savings, they are still better off than those who do receive the bonus. 

What about families receiving benefits?

Families receiving social welfare benefits like unemployment benefit are still eligible for the child bonus. 

Do I have to apply for the children’s bonus?

That’s not 100 percent certain yet. So far, there is no draft law, only a political decision. But it stands to reason that an additional application would not be necessary, if the bonus is simply paid out together with the child benefit - which must be applied for after the birth of a child

When will I receive the bonus?

This is also not certain. It is likely to be sometime around the beginning of July 2020. 

Is there additional support for single parents?

Single parents have been even more drastically affected by the coronavirus crisis, since they have even bigger problems with organising childcare - and so the government has promised them extra support. For the years 2020 and 2021, the amount you can additionally deduct from tax (tax relief) will be increased from 1.908 to 4.000 euros. 

Other child benefits

Visit our Child benefits in Germany page to learn more about the other child benefits you might be eligible for. 

Abi

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Abi Carter

Abi studied History & German at the University of Manchester. She has since worked as a writer, editor and content marketeer, but still has a soft spot for museums, castles...

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