Some say: "You have to be able to afford children..."

Child benefit (Kindergeld) in the social market economy

A welfare system based largely on the intergenerational contract, in which the "old" ensure that the "young" can develop successfully in childhood and education, so that they later return the favor to the "old" and provide for their livelihood, must help to ensure that parents can really afford the children.

One of the tools is child benefit (Kindergeld) under the Federal Child Benefit Act (BKGG - Bundeskindergeldgesetz)

As child benefit, €250 per month is paid for each child.

Since, according to theory, every child, regardless of which family, later contributes to social benefits, all parents or guardians receive this support - regardless of their social position.

So much for the theory

Strictly speaking, this fixed amount only benefits people who are above the income under SGB II, but at the same time pay only a small amount of tax (e.g. of approx. € 34,000 for single persons / € 64,000 for married persons).

The higher earners get the child benefit paid out according to the table, but when assessing income tax, a favorable check takes place: If the tax advantage is higher than the child benefit, there is an additional payment.

The situation is different for low-income earners: they have to apply for additional benefits from SGB II in addition to their income and have nothing to gain from child benefit: Every increase in child benefit is offset by a reduction in social assistance – every increase in child benefit is a zero-sum game.

It is precisely for these low-income earners that a trap may be "waiting", which we will describe in the next article.