The German government aims to provide more support for families on low incomes – especially single parents. Economic difficulties are often a source of stress in everyday family life, and impact adversely on the prospects of parents and their children. The Strong Families Act thus provides for the reform of the child benefit supplement and for improvements to the education and participation package. The German Bundestag has now passed the Act, meaning that some of the new provisions can come into effect in summer, with the others coming into force at the start of 2020.
Changes in the child benefit supplement
The new child benefit supplement regulations make it worthwhile to earn additional income, or at least ensure that this will no longer have an adverse impact on overall household income. Application procedures have been simplified, the maximum supplement raised to 185 euros, and the number of people eligible for the supplement increased.
The child benefit supplement supports families on low incomes, who would otherwise have to rely on the basic social security provision for job-seekers under the German Social Security Code SGB II. The child benefit supplement is paid in addition to regular child benefit. In many cases, families also receive housing benefit.
Under the Strong Families Act, the child benefit supplement will no longer simply be discontinued immediately, but will be phased out gradually. For every euro in additional income earned, 45 cents will be deducted from the child benefit supplement. Previously the full euro was deducted. A similar regulation applies to income earned by the child, for instance in the form of maintenance payments or trainee remuneration.
At present, any additional income on the part of the parents or the children can result in the family losing its entitlement to the child benefit supplement, leaving them worse off than before if they reach a certain income threshold. The additional income can also result in other benefits, such as housing benefit being reduced, so that additional income does not in fact raise the family income and can even result in a lower household income.
In future the supplement is to be awarded for a period of six months, irrespective of whether there are any changes in income during this period, which can be the case for people working shifts, for instance.
Enhanced education and participation package
Children should have fair opportunities to participate in society and obtain an education, and develop their skills, as far as possible irrespective of the financial situation of their parents. An education and participation package already exists to this end. The specially tailored services offer children and young people more opportunities to take part in educational and support services in the social and cultural sphere as well as school-related services. This could be extra tuition, membership of a sports club, school field trips or school trips. The package also covers funds for the purchase of school materials.
Here too, the Strong Families Act provides for improvements. The sum available to purchase school materials, for instance will be raised from 100 euros to 150 euros per school year. Families will no longer be required to pay part of the cost of school meals and school transport. Applications are also to be simplified, along with the settlement procedures.
Between 2019 and 2021 the German government is to invest one billion euros in the child benefit supplement and 220 million euros a year in extending the education and participation package.
The changes to the child benefit supplement are to come into force as of July 2019 and January 2020, while the improvements in the field of education and participation will come into effect as of August 2019.