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Families in Germany to see next child benefit hike in 2025, says finance minister

Finance Minister Christian Lindner, of the pro-business Free Democrats (FDP), says he expects the next increase for child allowance or Kindergeld to take place next year, as bickering among German coalition parties continues.

Published: 25 April 2024 09:57 CEST
A couple walk through a park in Germany with their young children.
A couple walk through a park in Germany with their young children. Photo: picture alliance/dpa | Felix Kästle

The minister, who was discussing relief for families in Germany in an interview with Redaktions Netzwerk Deutschland (RND), said that Kindergeld will be increased in 2025 but didn’t say how much it would increase. 

“For the exact amount, we will have to wait for the subsistence level report in autumn,” the FDP politician said.

Lindner added that there are also plans to compensate for inflation in wage and income tax in 2025.

“Together with an increase in child benefits, there will also be a further increase in the basic tax-free allowance and the child allowance in wage and income tax in 2025,’ he said. He estimated the volume of relief from these tax cuts to support German residents at a time of high inflation at a “single-digit billion amount”.

However, the interview also revealed further cracks within the coalition government, which has been arguing about several topics recently including unemployment benefits. 

READ ALSO: Why a push for tougher sanctions in Germany is sparking a coalition row

Lindner said his party continues to reject a hike in child benefit called for by coalition partners the SPD and the Greens at the beginning of 2024.

“Child benefit was already increased significantly and disproportionately in 2023 in order to relieve the burden on families,” he said. “That was a great success. That is why the next increase is not due until 2025.”

Lindner also reiterated his call for child tax free exemptions (known as the Kinderfreibetrag) to be increased retroactively to the beginning of 2024, which he says is necessary for constitutional reasons. “Unfortunately, the SPD and the Greens have blocked this so far,” the FDP politician lamented.

There has been a row in the coalition over this matter for some time. 

Lindner wants to increase the tax-free allowance for families with children without increasing child benefit at the same time. However, the SPD considers this to be unfair because it would only relieve the burden on families with high incomes. For families with lower incomes. child benefit is the main factor. The FDP argues that the increase it wants to see is intended to follow on from the hike in child benefit from 2023.

German Finance Minister Christian Lindner.

German Finance Minister Christian Lindner. Photo: picture alliance/dpa | Kay Nietfeld

Parents in Germany automatically receive either child benefit or child tax exemptions depending on their income. The Finanzamt (tax office) looks at each tax return to determine whether the Kinderfreibetrag or Kindergeld makes the most sense for the family in question. 

READ ALSO: 

The tax-free allowance is often only worthwhile for families bringing in higher incomes. It was increased from €6,024 to €6,384on January 1st and would rise retroactively to €6,612 under the Finance Minister’s plans.

Child benefit or Kindergeld rose to a standardised €250 per month and child in 2023.

As The Local has been reporting, the German government has agreed to replace Kindergeld with Kindergrundsicherung or ‘basic child allowance’ from 2025.

The new system will see those with a greater financial need granted additional benefits. It means all benefits including a basic allowance, a supplemental allowance, and parts of an “education and participation package” will be bundled into the Kindergrundsicherung.

READ ALSO: What families in Germany need to know about Kindergeld’s replacement from 2025

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SCHOOLS

What is Germany’s digital pact for schools and how does it affect pupils?

A key programme for digitalision in German schools expires on May 16th. Has the initiave been successful - and what comes next?

Published: 16 May 2024 16:57 CEST
What is Germany's digital pact for schools and how does it affect pupils?

When it comes to digitalisation, Germany is a country very much under construction – and nowhere has that been more apparent than in schools. 

During the Covid-19 pandemic years, pupils suffered major setbacks as schools struggled to set up the infrastructure for remote and digital learning. 

This failure to set up digital learning quickly enough is seen as a key reason for Germany’s dismal performance in recent rankings of schools around the world.

Perhaps the most shocking of these came from a 2018 PISA study that ranked Germany 66th out of 78 countries in the availability of digital learning tools and 76th out 78 in the digital skills of teaching staff.

Desperate to turn things around, the federal and state governments launched their ‘Digital Pact for Schools’ back in 2019, earmarking a total of €6.5 billion for improving things like Wifi, the availability of digital equipment and administrative support.

Five years later – as the scheme expires – there are signs that the project has been a success. 

READ ALSO: German school pupils plummet to ‘lowest score ever’ in international rankings

How has the Digital Pact changed schools in Germany?

The €6.5 billion investment package consisted of €5 billion for boosting digital infrastructure in schools, €500 million for administrative support, €500 million for digital tools for teachers and a €500 emergency package for helping schools get set up for remote learning during the pandemic.

This was divided between the 16 federal states, with larger sums going to the states with the biggest populations and the highest number of schools. 

According to the Ministry of Education, around 90 percent of this sum has been either spent or earmarked since the fund was set up, with schools mostly using the money to purchase equipment like tablets and laptops for their classrooms. 

Out of the some 32,000 schools in Germany, around 29,000 benefited from the investment, the ministry revealed.

In the state of Bavaria alone, the Digital Pact helped fund 280,000 additional tablets in schools, bringing the total number up to 336,000. The number of digital classrooms, meanwhile, rose by 53,000 to 77,000 and the number of classrooms connected to wifi jumped by more than 60,000 to 101,000. 

Summing up the progress made in the last half decade, Stefan Düll, president of the German Teachers’ Association, said: “Most schools now have a good internet connection right up to the edge of the street,” even if no high-speed internet is available in the area. 

READ ALSO: School drop-outs rise across Germany as resources and teachers spread thin

According to the headteacher, there has also been significant steps forward in learning platforms, training for teachers and the availability of devices like tablets in schools. “Teaching can now utilise digital possibilities in many places,” he added. 

Is there still room for improvement?

Despite the investment, progress has been much slower in some regions and there are still many schools that don’t have access to wifi at all.

Düll also pointed out that, for schools to maintain high standards, there needs to be continuous investment for renewing subscriptions and replacing outdated or broken devices. This hasn’t always been forthcoming, he said. 

In addition, teachers often lack the administrative support they need to ensure that a digital lesson actually takes place in the case of technical problems. When it comes to training courses to get set up for digital learning, teachers are often unable to find the time while working more than 40 hours per week and coping with ever-worsening staff shortages.

School pupil in Germany

A school pupil studies history on a laptop at school in Germany. Photo: picture alliance/dpa | Marijan Murat

Finally, Düll sees room for improvement in the government’s attitude towards artificial intelligence (AI) and finding safe and ethical ways to incorporate it in the classroom.

“AI has an incredible amount of potential, an incredible amount of opportunities for our country as a whole, for Germany as a business location,” he said, “and Germany still has the chance to be at the forefront.”

However, since the current Digital Pact only mentions AI in passing, schools currently have to shell out for this themselves – and licensing software with high data protection standards doesn’t come cheap. 

Will there be a Digital Pact 2.0? 

There should be, but currently it’s unclear what form it will take or how it will be financed. 

Though the new pact is due to kick off in 2025, Education Minister Bettina Stark-Watzinger (FDP) is currently locked in a battle with the state culture ministers over where the money for the next investment programme should come from.

Previously, 90 percent of the funding came from the federal government, while just ten percent was put forward by the states. This time around, however, Stark-Watzinger is demanding a 50/50 split and also wants more say in how the programme should work.

One key sticking point is the amount of funding put into additional training for teachers. “The Digital Pact 2.0 must not become a mere order list for digital devices,” the FDP politician said recently. “Teachers are central to good digital education and need appropriate further training.”

Education Minister Bettina Stark-Watzinger (FDP) in Berlin

Education Minister Bettina Stark-Watzinger (FDP) in Berlin. Photo: picture alliance/dpa | Christophe Gateau

From the Education Ministry’s perspective, the next Digital Pact should expire in 2030 and function as the last major investment from central government. 

However, the states disagree on almost every front.

Not only would state education ministers like to see the 90/10 funding continue, but they also reject the idea of the federal government interfering on what the money should be used for. That’s largely because, under Germany’s federal system, states are primarily responsible for governing schools and education. 

In addition, the Länder reject the idea of an end date and would like to see the investment continue indefinitely.

READ ALSO: Six surprising facts about Germany’s school system

It’s still unclear when the next Digital Pact may be finalised. Relations between Stark-Watzinger and the state culture ministers have soured to such an extent that the FDP politician refused an invite to the next Culture Ministers’ Conference (CMK) that’s due be held in Saarland this June.

That means the deadlock is likely to continue into the foreseeable future. 

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