Parental allowance and child-raising allowance: What is the difference?

Parental allowance replaces child-raising allowance

Parental allowance was introduced in 2007, replacing the child-raising allowance that had been in force until then. The idea behind the concept of parental allowance:

• Parents should be able to take enough time for the new addition to the family without incurring too great a financial loss.
• Parents – especially working women – should find their way back to work quickly and easily after the birth.
• Fathers should be more involved in the care and upbringing of the child with parental allowance.

Difference between parental allowance and child-raising allowance

A brief look back at the child-raising allowance: Before 2007, mothers or fathers could apply for child-raising allowance provided that the family income remained below a certain income limit and the working hours were reduced to a maximum of 30 hours per week. After the last change in the law in 2004, a lump sum of EUR 300 per child was paid out for a maximum of 24 months. Alternatively, parents could also apply for the so-called budget form of child-raising allowance and then received 450 euros per child for 12 months.

Compared to the child-raising allowance, the parental allowance brought with it a number of changes:

• Instead of a lump sum, applicants receive a percentage of what they earned net before the child was born . The parental allowance is calculated individually for each applicant, but it is always 300 euros and amounts to a maximum of 1,800 euros per month and child. In our article “ Elterngeld – amount of the payment? ’ you can find out how much parental allowance is paid in your case.
• In contrast to parenting allowance, parental allowance is paid for a maximum of 14 months and only if your partner uses at least two months of this time. With the help of these so-called partner months , fathers in particular should gain more time with the new family member. The earlier child-raising allowance was of course also available to fathers, who only rarely used the offer. With parental allowance, you and your partner must decide in advance when and for how long each of you would like to claim parental allowance.
• Since 2011, the parental allowance – including the minimum amount of 300 euros – has been offset against social benefits such as Hartz IV or social assistance . The child-raising allowance, on the other hand, had no effect on other benefits. If you receive social benefits, you may still be able to benefit from parental allowance. You can find more information on this topic in our article “ Parental allowance and unemployment benefit ”.

State education allowance in Bavaria and Saxony

Just like the parental allowance, the state education allowance is a financial support for families, which, however, is only paid in Bavaria and Saxony. In Baden-Württemberg and Thuringia, the child-raising allowance was recently abolished; transitional periods apply here for children who were born before a key date. You can find detailed  information on the country-specific parental allowance here .

We offer you a lot of helpful information on the current status of parental allowance in our special on the subject of parental allowance . Take a little time to deal with the topic, because only then will you know what you are entitled to and what you have to consider when it comes to parental allowance.