What is meant by Elterngeld?

The German social security system is renowned for its comprehensive benefits, one of which is the Elterngeld or Parental Allowance. This financial support is provided to parents who choose to stay at home or reduce their working hours to care for their newborn or newly adopted child.

Understanding Elterngeld

Elterngeld is a state-funded benefit that replaces a portion of the lost income when parents take time off work to care for their child. It is designed to lessen the financial burden and provide parents with the freedom to spend quality time with their newborn during the crucial first year.

Eligibility for Elterngeld

To be eligible for Elterngeld, parents must live in Germany, have legal custody of their child, and live in the same household. Both employed and self-employed individuals are eligible. The amount received depends on the net income of the parent taking time off work.

Application Process

The application for Elterngeld must be submitted in writing to the Elterngeldstelle, the parental allowance office, in your federal state. The application should be submitted as soon as possible after the birth of the child, as benefits are not retroactive.

Calculation of Elterngeld

The amount of Elterngeld is based on the net income of the parent taking leave in the twelve months prior to the birth of the child. The benefit ranges from 65% to 100% of the monthly net income, with a minimum of €300 and a maximum of €1,800 per month.

Frequently Asked Questions

Can both parents apply for Elterngeld?

Yes, both parents can apply for Elterngeld and can split the benefit months between them.

Can non-German citizens apply for Elterngeld?

Yes, non-German citizens who have a valid residence permit and are employed in Germany can apply for Elterngeld.

Is Elterngeld taxable?

No, Elterngeld is not taxable. However, it is subject to the progression proviso, which means it can increase the tax rate on your other income.

In conclusion, Elterngeld is a significant benefit for parents in Germany, providing financial support during an important phase of family life. It is a reflection of the German government’s commitment to supporting families and promoting a balance between work and family life.