Parents often have quite a lot of expenses for their children. Fortunately, there are various types of financial support available. There are child benefits (Kindergeld) and the children’s allowance (Kinderzuschlag). You must apply for both. The third option is the child tax credit (Kinderfreibetrag), which you can claim instead of child benefits. Which option is better for you depends on how much you earn. If you have a high income, the tax-free child tax credit is usually preferable. Don't worry, you don't have to figure this out yourself. The Taxation Authority (Finanzamt) will do it for you.

You are entitled to child benefits (Kindergeld) from the month your child is born until they are at least 18 years old. Child benefits are there to provide for your child's basic needs. Currently, you can receive €219 per month for your first and second child. For the third child it is €225 and for the fourth and each further child it is €250 (as of 1.1.2021). You can apply for child benefits at your local employment agency. The Family Benefits Office (Familienkasse) is responsible for this. You can also find forms for this at your local employment agency or on their website. If you work in the public sector or receive a pension, you must submit the application to your department. The application must contain your tax identification number (Steuer-ID) and that of your child. The Federal Central Tax Office (Bundeszentralamt für Steuern) will inform you of your child's tax identification number within three months of birth. You just need to have registered your child at the registration office (Einwohnermeldeamt). The office then automatically forwards the documents to the Federal Central Tax Office. The best thing to do is apply for child benefits as soon after the birth as possible. Then you'll get paid quickly. If you take care of this later, you will still get child benefits going forward, but only retroactively for a period covering a maximum of the last six months. As a couple, you should agree in advance which of the two of you will receive child benefits, as it will only be paid to one parent.

Unlike child benefits, the child tax credit (Kinderfreibetrag) is not paid out. Instead it is a fixed amount deducted from your annual income. You'll pay less tax as a result. Your Taxation Authority (Finanzamt) automatically includes the child tax credit in its calculations. The tax-free amount per child per year is currently close to €8400. Strictly speaking, the sum is made up of two parts: the actual the child tax credit of €5748 and the so-called BEA tax-free amount (BEA-Freibetrag) for care, education and training needs, which amounts to €2640. The tax-free amount is calculated jointly for married couples. In the case of unmarried couples, the tax-free amount is divided between each parent.

If you earn very little, you can apply for a children’s allowance (Kinderzuschlag) in addition to child benefits. The condition is that your income is sufficient for your own living expenses, but is not sufficient or is only barely sufficient for the whole family. As a single parent, you must earn at least €600 per month. For couples, the minimum monthly income is €900. The maximum income limit is around €1500, regardless of whether or not you are married. However, there are cases where you will still not receive a children’s allowance. For example, if you only receive benefits and have no other income. Getting a children’s allowance is also restricted if you receive benefits according to the Asylum Seekers Benefits Act (Asylbewerberleistungsgesetz) or BAföG as a student or trainee. The restriction also applies if, as an EU citizen, you are not currently working or if you have not been working for at least one year. Currently, the maximum amount for a children’s allowance is €205 per child per month. The money is paid to the person who also receives child benefits (Kindergeld). You can apply for a children’s allowance at the Family Benefits Office (Familienkasse) of your local employment agency. It is paid along with the child benefits.