Lowering the child allowance?: Paus proposal encounters resistance in the coalition

The dispute in the traffic light over child security continues to escalate. After Family Minister Lisa Paus (Greens) suggested lowering child allowances and financing basic child security with the additional tax revenue, the FDP went on the barricades. The move was “unrealistic and a slap in the face to millions of families,” said FDP parliamentary group leader Christoph Meyer in the Tagesspiegel.

The background is a complex regulation in the German tax system: Parents currently receive 250 euros per child per month from the state. At the same time, there are the so-called child allowances. When calculating the tax, these are deducted from the income, so that the tax burden is reduced. The tax office automatically determines whether child benefit or allowances are more worthwhile for the parents. If it is the allowance, it will be offset against the child benefit that has already been paid out. Top earners benefit from this: Your tax savings are greater than the sum of the child benefit paid out.

Paus had said in the “Neue Osnabrücker Zeitung” (NOZ): “It is absurd that wealthy families are relieved much more of the child allowance than poorer families who only receive child benefit.” With the reduction in the allowance, this injustice in the system finally eliminated.

“With her current proposal, Ms. Paus drops her mask and shows that her main concern is redistribution.”

FDP parliamentary group leader Christoph Meyer

The FDP holds against it. The child allowance was increased with the Inflation Compensation Act for the years 2023/2024, and child benefit as a direct benefit was even disproportionately high in this context. The traffic light has already increased all services that are supposed to make up basic child security – by a total of seven billion euros a year. “With her current proposal, Ms. Paus lets her mask drop and shows that her main concern is redistribution,” says Meyer.

Rather, what is needed now is the submission of the agreed cornerstones on how basic child security should be designed. Minister Paus has not yet delivered here. “Demanding billions without a basis for calculation is dubious,” said Meyer. These cornerstones should also include the issues of digitization and administrative simplification of access to services, which should represent the actual core of the reform.

The traffic light coalition has agreed to bundle services from child benefit and child allowance to financial support for school trips in a basic child security system and to reach more beneficiaries with the services in the future. Whether that should also mean a multi-billion dollar financial increase is disputed, especially between the Greens and the FDP. Paus had registered a need of twelve billion euros. The minister considers the project to provide basic child security for a “paradigm shift”. It is her most important project in this legislative period. (with dpa)

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