What the Elterngeld reform U-turn means for parents in Germany

Germany’s CDU/CSU-SPD government has U-turned on plans to cut parental allowance (Elterngeld) and will increase the benefit instead. Here’s what we know so far:

Prien U-turns on parental allowance cuts

In May, Minister for Education and Family Affairs Karin Prien (CDU) proposed a series of funding cuts to Germany’s parental allowance payment, designed to save the government 540 million euros by 2027.

Now, according to a ministry document seen by public broadcaster ARD, the government will U-turn on these plans. "We have agreed to further develop the structure of the parental allowance and to adapt it better to the realities of life for young families today," Prien told the dpa on October 28.

"In this way, we are ensuring that starting a family remains an attractive prospect for young people in Germany in the future." Prien’s plan has drawn widespread criticism since it was announced. One petition, started by parental allowance expert Diana Leib, gathered 200.000 signatures against the cuts.

What changes are planned for Elterngeld?

Back in May, Prien proposed four major changes to how parental allowance is distributed. These were lowering the eligibility income threshold; reducing the percentage of their paycheck parents receive as allowance; cutting the maximum claim period from 14 to 12 months; and tightening rules so fathers were obliged to claim part of the allowance.

According to the revised draft law seen by ARD, significant details of the reform have now changed. First, in the first four months of claiming Elterngeld, parents will receive 80 percent of their net income as the payment, rather than 65 percent. However, after the four months, this will drop to 50 percent. 

Second, the government will no longer reduce the maximum claim period from 14 to 12 months. However, how each parent can claim parental allowance will change. This will be done using the “4-6-4 model”. Going forward, each parent must claim at least four months, and the remaining six months should be split equally between the two parents. Both parents can claim simultaneously without restriction.

Third, parents can claim the so-called “sibling bonus” (Geschwisterbonus) for a longer period. The sibling bonus entitles parents with more than one child in their household to 10 percent more parental allowance.

Fourth, the government will stick to one plan announced in the original reform. The minimum parental allowance will rise from 300 euros to 330 euros per month, and the maximum from 1.800 euros to 1.900 euros.

CDU under pressure to change course

"We are deliberately sending a message to young families: we are here to support you," Prien told the dpa on Wednesday, but added that the reform would still save the government money, albeit less than originally planned.

Since the cuts were announced in May, Chancellor Friedrich Merz (CDU) has seen record-low approval ratings, while his party has faced multiple historic defeats in state elections, from both the far-right and far-left.

The U-turn also comes as Germany heads into a weekend of youth protests. Over 150.000 young people are expected to protest across 32 German cities on October 31, in solidarity with French students, against cuts to social services and rising living costs, among other things.