DThe coalition is not calming down. The SPD is pushing for a further increase in child benefit, the FDP rejects this. The Social Democrats point to the adjustment of the child tax allowance carried out by Finance Minister Christian Lindner (FDP), while the Liberals refer to the recent generous increase in child benefit.
The Federal Ministry of Finance argues that child benefit has increased disproportionately and prematurely to a uniform 250 euros per month for the years 2023 and 2024 with the Inflation Compensation Act. Previously it was 219 euros per month for the first and second children, 225 euros for the third and 250 euros for each additional child. The child allowance rose by 404 euros to 8,952 euros per year in 2023. Lindner's people argue that it was increased relatively little: here an increase of 4.7 percent, there one of 14.2 percent.
If the child benefit had only been adjusted like the allowance, it would have only been 229 euros for the first two children. At the beginning of this year, the child allowance rose again by 588 euros to 9,540 euros or 11.6 percent, but not the child benefit, which remained at 250 euros. If the adjustment rule were continued, it would now be 244 euros – so it would still be 6 euros below the current value, according to the Ministry of Finance.
FDP against SPD
The bone of contention is Lindner's announcement last September that he would once again tackle the child allowance and the basic allowance. “What is right for recipients of social benefits must also be cheap for taxpayers,” said the minister, referring to the increase in citizens’ allowance at the turn of the year 2023/2024. Specifically, the FDP politician spoke of an additional increase in the basic tax allowance by 180 euros and the child tax allowance by 228 euros.
How much child benefit is the SPD concerned about? She doesn't say that. But you can figure it out. With a maximum tax burden of 45 percent (so-called rich tax) plus 5.5 percent solidarity surcharge on the income tax to be paid, the maximum tax burden is 47.475 percent. According to Lindner, parents who pay the rich tax should have to pay 228 euros less tax per child. This leaves you with a maximum of 108.24 euros more in your account. That amounts to 9 euros per month. According to a rule of thumb from the Federal Ministry of Finance, an increase in child benefit by 10 euros would cost the federal government 0.71 billion euros and the state as a whole almost 1.7 billion euros.
SPD chairman Lars Klingbeil criticized at the weekend that it was unfair to only provide relief to families with very high incomes. Those with small and medium incomes should also receive more this year. On Monday, the deputy chairman of the SPD parliamentary group, Sönke Rix, added: “The discussed proposal by Federal Finance Minister Christian Lindner to simply increase the child allowance is not only socially unfair, but also contradicts the agreements in the coalition agreement,” said he. The overwhelming majority of parents only receive child benefit as support, while families with comparatively high incomes benefit from the child allowance. “We want to close this gap and not increase it any further.”
FDP politicians, on the other hand, recalled the old agreement to first increase child benefit, then the child allowance. In this sense, FDP chairman Christian Dürr, for example, commented on Deutschlandfunk at the beginning of the week. He was surprised by the SPD criticism. Those receiving child benefit would have had an advantage, and now they are following suit with the allowance.
The SPD parliamentary group leader Rolf Mützenich widened the debate by questioning the child tax allowance entirely. “So that further debates about the unequal benefits for children no longer arise in the future, we should replace the child tax allowance with a new child benefit,” said the SPD politician to the “Rheinische Post”. But the child allowance, which is intended to keep the children's minimum subsistence tax-free, is constitutionally protected so that parents are not treated worse than childless taxpayers.
The parents' reduced ability to pay must be taken into account in income tax. The extent to which the part of the allowance that is intended to cover care, upbringing and training needs can be reduced is legally controversial. But the FDP is unlikely to be able to do much to reduce this – because in fact that would be a tax increase for many parents.
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