Family Finances: Revised Parental Allowance Income Limit
Prepare for a change in family budgeting if you're a high-income earner in Germany. The German parliament, aka Bundestag, is enforcing a new income limit for parental allowance, affecting families across the country.
Those who opt for a break from work to spend time with their new bundle of joy can now enjoy up to 14 months of parental leave, but with a twist. Couples can only receive parental allowance simultaneously for one month within the first 12 months of their child's life. However, families with multiple births or premature babies may be exempt from this rule.
The new income limits for the parental allowance are as follows:
- Couple-up families: That's right, if both you and your partner decide to take parental leave, expect to receive parental allowance individually for only one month within the first year. Couples with taxable incomes up to €175,000 per year are eligible for this benefit.
- Single parent families: If you're the sole breadwinner, you'll still be able to enjoy the benefit of parental leave for up to 14 months, with taxable incomes capped at €150,000 per year.
Now here's something to keep in mind: Families with incomes exceeding the new limits will no longer qualify for parental allowance starting from next year.
- Couple-up families: Your high-income dreams of receiving parental allowance will have to wait until your children are financially independent, starting April 1, 2025.
- Lone parents: Single parents won't receive parental allowance if their taxable income surpasses €150,000, starting April 1, 2024.
So, dust off your family budget and plan ahead while navigating these legislative changes. Keep in mind that parental leave and income limits may vary by location. It's essential to stay informed and adjust accordingly to provide the best care for your new addition.
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