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 your income. 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.
Child benefits (Kindergeld)
You are entitled to child benefits from the month in which your child was born until they are 18 years old at least . 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 you get €225 and €250 for each additional child after that (as of 30 August, 2022). 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 pension benefits, you submit the application to your department. The application must include both 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. The prerequisite for this is that you have registered the 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 beforehand which of you will receive the child benefit, as it will only be paid to one parent.
Child tax credit (Kinderfreibetrag)
Unlike child benefits, the child tax credit (Kinderfreibetrag) is not paid out. Instead, it is a fixed amount by which your annual taxable income is reduced. 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 and year is currently €8,388. Strictly speaking, the amount is made up of two parts, the actual child allowance of €5,460 and what is known as the ‘BEA allowance’ of €2,928 for care, education and training needs. 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.
Children’s allowance (Kinderzuschlag)
If your income is low, you can apply for a child allowance (Kinderzuschlag) in addition to the child benefit. 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, your income must be at least €600 per month. For couples, the minimum monthly income is €900. The maximum income limit is calculated based on income, rental expenses, and the age of the children. If there are any assets, these will also be taken into account. 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. The same applies if you receive benefits under the Asylum Seekers' Benefits Act (Asylbewerberleistungsgesetz) or BAföG. Currently, the maximum amount for a children’s allowance is €229 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.
