What would Germany’s plan to cut back Elterngeld mean for you?

The German government’s coalition agreement promised to increase parental allowance (Elterngeld) payments, but it is considering cuts instead. Here’s what we know so far: 

German gov’t mulls parental allowance cuts

Germany has two social security payments to support new parents, maternity benefit (Mutterschaftsgeld) and parental allowance (Elterngeld). 

While mothers can claim maternity benefits in the six weeks after giving birth, both parents are eligible to claim parental allowance for at least two and up to 14 months in total. Parents can decide how much allowance to claim and how to divide the 14-month allowance between them.

To be eligible, the household income must not exceed 175.000 euros per year. The allowance is a percentage of their income before the child was born, and adjusted based on how much they earn.

1,19 million women and 417.000 men claimed parental allowance in 2025, according to figures from the Federal Statistical Office. The German government has long said it wants to increase the number of fathers who claim parental allowance, but in 2025 this stayed the same as in 2024, at 25,9 percent of all claimants.

Germany’s CDU/CSU-SPD government is looking to plug holes in its budget and has decided that cutting funding for social security services, such as statutory health insurance and parental allowance, is the approach it will take.

Now, Minister for Education and Family Affairs, Karen Prien (CDU), has presented concrete proposals for how the government can immediately save money (more precisely, 540 million euros by 2027) by cutting funding for parental allowance.

What has Prien proposed?

First, Prien has proposed lowering the eligibility income threshold. Previously, parents could earn a combined taxable annual income of 300.000 euros before becoming ineligible; this was reduced to 200.000 euros in 2024 and to 175.000 euros in 2025.

Currently, parents claiming parental allowance typically receive between 65 and 67 percent of the income they received in the 12 months before their child was born. Prien's second proposal is to reduce this percentage.

Third, Prien wants to reduce the maximum 14-month claim period, but it is yet unclear by how much. Fourth, the government is considering introducing a rule that requires fathers to claim at least four to six months of parental allowance, or match the amount the mother has claimed, as a prerequisite for claiming the maximum allowance.

In the future, there may also be a restriction on how long both parents can claim the benefit simultaneously.

What are the potential outcomes of the cuts?

Germany’s birthrate is currently at its lowest level since the Second World War. In the short term, even without making cuts to parental allowances, this means the government will need less money to fund social security payments that support families.

The Sozialverband Deutschland (SoVD) has said that cuts will put financial pressure on those who do decide to have children. “Families are already under enormous pressure due to the high cost of living, while parental benefits have continued to lose value in real terms since their introduction,” SoVD representative Michalea Engelmeier said in a press release.

When parental allowance was introduced in 2007, the minimum monthly amount that a family could claim was 300 euros, and the maximum amount was 1.800 euros. Both of these figures have stayed the same, despite wages and the cost of living rising substantially.

Another short-term outcome is that because the maximum income threshold may be reduced, higher earners will receive less government support for raising children. The parental allowance will be more targeted at families who need it, but overall, these families will still receive less than before the planned cuts.

According to a recent Insa survey, 55 percent of people in Germany already believe that having children is no longer affordable. While the German government is trying to incentivise young people to have children to soften the blow of its looming demographic crisis, cutting parental allowance will likely make it even less affordable for many.