Bundestag passes application-free child benefit in two stages

According to the Federal Ministry of Finance, the prerequisite for automatic payment is that at least one parent lives with the child in Germany and at least one parent works in Germany. In addition, the authorities must know the bank account details (IBAN). The Once-Only principle is intended to ensure that data only has to be communicated to the authorities once.

Two stages: Second child first

When a child is born, the registry office is to inform the Federal Central Tax Office in the future, which in turn will independently notify the family benefit office. Families can already store their IBAN via the Elster tax portal. Families can also opt out of the automatic solution.

Eligible persons include people from the EU, Algeria, Norway or Morocco. They must be employed subject to social insurance contributions or be receiving unemployment or sickness benefit. Persons who are in Germany for education or further training or who are only tolerated as asylum seekers remain excluded.

The child benefit is paid to the person who regularly cares for the child. According to the Federal Ministry of Finance, in three out of four cases the benefit goes to the mother's account. Stepparents, foster grandparents, siblings or grandparents can also apply for child benefit under certain conditions.

Parental allowance to be cut

As part of the reform, parental allowance is also to be shortened from 14 to 12 months, with which the ministry wants to save 500 million euros per year. Both parents will only receive the full amount if both parents take at least two months of parental leave. This change is also part of the legislative package.

Introduction is planned in two stages: From March 2027, parents are to receive child benefit without an application for a second child, and from November 2027 also for the firstborn. The Bundestag is voting on the draft this Thursday at noon; afterwards, the Bundesrat will also deal with it.

Criticism from the Taxpayers' Association

The Social State Commission of the federal government had previously recommended paying child benefit without a prior application. The commission explained that this would save citizens time and effort. According to the Federal Employment Agency, around 60 percent of applicants now handle the benefits digitally.

For more complicated child benefit cases, the application process remains in place for the time being. German citizens living abroad can also continue to submit an application. The Federation of German Taxpayers stated: Although higher child benefit payments are being announced, a noticeable tax improvement is so far hardly apparent.