Parental allowance: The current debate

The debate about parental allowance recently flared up again due to a planned change in the law. Read here to find out exactly what it was about and what it could mean for planners.

Parental allowance is first and foremost a social benefit from the state for parents of infants and young children. The monthly payment is intended to enable parents to raise and care for their child. The amount is between 300 and 1,800 euros per month and depends on the respective net earnings. For parents who want to concentrate on looking after their children, it is intended to provide financial security in the new life situation.

One parent can receive the basic parental allowance for a minimum of two and a maximum of twelve months. If both parents are raising the child, they can split 14 months between them. In combination with Parental Allowance Plus and the partnership bonus, even longer payments are possible.

A lot of paperwork is required to apply for the state benefit. The average net income of the parent providing care in the last twelve months before the birth is always decisive. This income must be lost after the birth in order to be partially replaced by parental allowance. This is because it is intended as compensation that also offers more financial independence in the period after the birth.

From 2023, an upper income limit could come into force for parental allowance. Until now, the amount of parental allowance paid has increased in line with the amount of income before the birth. A maximum monthly income of 2,770 euros is taken into account: From an average income of 1,240 euros and up to 2,770, there is the basic parental allowance of 65 percent and therefore a maximum of 1,800 euros. If income in the twelve months prior to the birth is less than 1,240 euros per month, a higher percentage is applied to replace up to 100 percent of the previous income. Anyone who had no income before the birth will receive the minimum contribution of 300 euros per month.

In 2021, parental allowance, which can only be applied for after the birth of the child, was to be made more flexible, more partnership-based and simpler. Since then, for example, it has been possible to work part-time or receive other income replacement benefits without reducing the amount of parental allowance. In the case of premature births, parents also receive parental allowance for longer, namely one to two months more depending on the number of weeks premature.

So far, so good. Since the beginning of July 2023, there have been discussions about adjusting the income limits from 2024. Until now, all parents who earn up to 300,000 euros per year together have received parental allowance. Before the changes in 2021, this limit for couples was as high as 500,000 euros per year. From January 1, 2024, the upper income limit for couples could now be lowered again to a maximum of 150,000 euros in taxable income per year, according to a draft by the Federal Ministry for Family Affairs. For single parents, the limit could also be lowered to 150,000 euros – it currently stands at 250,000 euros per year.

Apart from the fact that many higher-earning couples would be disadvantaged by this, the current conflict also revolves around spousal splitting. While the parental allowance is intended to promote equality, the tax relief provided by the splitting of the income of married couples supports a traditional division of labor between the main earner (usually the man) and the additional earner (usually the woman). If the woman works in a mini-job, she saves on income tax and is covered by her partner’s statutory health insurance.

Consideration is now being given to abolishing married couple splitting. There are also debates about the basic child insurance of 250 euros per month planned from 2025, which is to replace child benefit. Both measures are intended to finance parental allowance. Many voices are calling for a focus on providing more childcare places instead – there is currently a shortage of almost 400,000 places in Germany.

The average annual salary for urban planners in Germany is between 42,500 and 54,300 euros, depending on experience. As in many other professions, women tend to earn less. As single parents, planners are therefore likely to qualify for parental allowance in most cases – even if the planned reduction in the income threshold is implemented from 2024. However, the situation is different if there is another parent and the annual income as a couple is over 150,000 euros.

As in other professions, it is possible for planners to work part-time during parental leave. This is when the so-called Parental Allowance Plus comes into play, which is half as high as the basic parental allowance. This is intended to make it easier to combine work and family life. Basic Parental Allowance and Parental Allowance Plus can be combined if desired. The relevant parental allowance office can help with this.

Couples who share the work and care equally can also receive up to four additional months of parental allowance plus, the so-called partnership bonus. To qualify, both partners must work part-time for between 24 and 32 hours per week. As the planning job often depends on projects, it can make sense to continue working during parental leave.

Read more: We think that female landscape architects are underrepresented in planning. You can read more about women in this profession here.