Parental allowance: What is set to change from 2027

The Fede­ral Minis­try for Fami­ly Affairs has pre­sen­ted plans to reform the paren­tal allo­wan­ce sche­me. The new regu­la­ti­ons are set to app­ly to all par­ents who­se child­ren are born from Novem­ber 2027 onwards. The draft bill is curr­ent­ly still under­go­ing inter-minis­te­ri­al con­sul­ta­ti­on and has the­r­e­fo­re not yet been passed.

Shorter benefit periods, but greater involvement of fathers

Argu­ab­ly the most signi­fi­cant ele­ment of the draft: the maxi­mum peri­od for which basic paren­tal allo­wan­ce can be clai­med is to be redu­ced from the cur­rent 14 months to 12 months. In future, for paren­tal allo­wan­ce to be gran­ted at all, each parent must take at least three months’ paren­tal lea­ve. Par­ents are free to divi­de the remai­ning six months bet­ween them­sel­ves or take them tog­e­ther. As befo­re, sin­gle par­ents will be entit­led to up to 12 months’ paren­tal allo­wan­ce and are exempt from the mini­mum par­ti­ci­pa­ti­on rule.

Higher minimum and maximum amounts

At the same time, the amounts are set to rise slight­ly. The mini­mum month­ly amount is to be increased from 300 euros to 330 euros. This will pri­ma­ri­ly affect par­ents on very low inco­mes or with no inco­me pri­or to the birth. Accor­ding to the draft, the maxi­mum amount will rise to 1,900 euros per month; it curr­ent­ly stands at 1,800 euros. The inco­me thres­hold for exclu­si­on from paren­tal allo­wan­ce remains at a taxa­ble annu­al inco­me of 175,000 euros for couples.

Current arrangements

Anyo­ne app­ly­ing for paren­tal allo­wan­ce today will gene­ral­ly recei­ve 65 per cent of the net inco­me they would have ear­ned during the twel­ve months pri­or to the birth. The sta­te pays a mini­mum of 300 euros and a maxi­mum of 1,800 euros per month. In addi­ti­on to the stan­dard basic paren­tal allo­wan­ce, the­re are two fur­ther options:

• Paren­tal Allo­wan­ce Plus: The pay­ment is spread over up to 28 months, which means the month­ly amount is lower. This is a sen­si­ble opti­on for par­ents who return to part-time work ear­ly on.
• Part­ner­ship bonus: Par­ents are entit­led to up to four addi­tio­nal months of Eltern­geld­Plus if both work bet­ween 24 and 32 hours a week and share child­ca­re responsibilities.

Sin­ce the chan­ges intro­du­ced in 2024, both par­ents may only cla­im basic paren­tal allo­wan­ce at the same time for a maxi­mum of one month up to the child’s twelfth month of life. Pre­ma­tu­re babies and mul­ti­ple births are exempt from this rule.

Special provisions for premature births

Par­ents of pre­ma­tu­re babies are entit­led to one or more addi­tio­nal months’ paren­tal allo­wan­ce, depen­ding on the degree of pre­ma­tu­ri­ty. The con­di­ti­on is that the child must have been born at least six weeks befo­re the due date. The amount is cal­cu­la­ted based on the num­ber of weeks by which the child was born prematurely.

What does this mean for employers?

Employ­ers are not enti­re­ly excluded from the paren­tal allo­wan­ce pro­cess. They have sta­tu­to­ry obli­ga­ti­ons to coope­ra­te, for exam­p­le when issuing pro­of of inco­me. An employ­er who delays pay­ing wages may be held lia­ble if this results in a lower paren­tal allo­wan­ce being cal­cu­la­ted. This has alre­a­dy been con­firm­ed by case law.

As the reform is still at the draft stage, it is advi­sa­ble to seek advice in good time when making spe­ci­fic plans regar­ding paren­tal lea­ve and paren­tal allo­wan­ce, so that the right decis­i­ons can be made on the basis of the legis­la­ti­on curr­ent­ly in force.