Title: The Capital City Allowance on Trial: Will the Federal Constitutional Court Intervene?
The Federal Constitutional Court, known for overturning controversial legislation such as Habeck's heating law and Scholz's financial tricks, has another contender in its sights. This time, the target is Berlin's capital city allowance.
Thorsten G., former head of the district offices for social affairs in Reinickendorf and Pankow, filed a lawsuit. The gripe? The allowance of 150 euros per month was capped at pay grade A13, which translates to around 5000 euros gross. As Thorsten progressed through senior magistrate (A14) and magistrate director (A15), his pay remained the same.
The plaintiff argued that the bonus violated the principle of equal treatment and the pay gap requirement, excluding higher-paid civil servants and narrowing the gap between pay grades A13 and A14.
Berlin's Administrative Court Sides with Thorsten G.
In January, the Berlin Administrative Court ruled in Thorsten's favor, declaring that the state had compromised the pay gap requirement with the introduction of the capital city allowance on November 1, 2020.
The public administration union (GVV) lent its support to the complaint, emphasizing the importance of retaining competent managers within the Berlin administration. "Many go to the federal administration for the money," said GVV member Klaus-Dietrich Schmitt (72).
Caught in the Crossfire: 54,200 Civil Servants in Berlin
Around 54,200 civil servants in Berlin now find themselves on the sidelines, fearing the possible cancellation of their extra 150 euros per month allowance. But only Karlsruhe can make a definitive ruling on the matter, as only the German Constitutional Court has the power to declare regulations unconstitutional.
Origins of the Capital City Allowance
Berlin's red-red-green coalition introduced the capital city bonus in November 2020, setting off a cadre of options for 125,000 employees. They could choose:
- 150 euros (taxable) per month; or
- A tax-free monthly BVG ticket, plus the remaining balance.
The goal was to maintain Berlin's attractiveness and competitiveness as an employer, keeping top talent from gravitating towards higher-paying positions with the federal government.
However, employees above the pay grade of A13 (around 5,000 euros) remain ineligible for the bonus. This oversight was one of the arguments made in the lawsuit by the municipal director, Thorsten G.
Weighing the Costs and Consequences
Calculations show that the annual cost of the bonus for all employees is around 240 million euros. The initiative, which began in November 2020 and ended in October 2025, resembles the conurbation bonus model in Munich (ranging from 100 to 200 euros/month).
Former finance senator Matthias Kollatz (66, SPD) opposed the initiative, fearing the extra perks could lead to Berlin being expelled from the Tarifgemeinschaft der Länder (TdL).
The current finance administration acknowledged the criticism, saying it would carefully examine the written reasons and incorporate them into future salary adjustments.
The Future of the Capital City Allowance
As the Federal Constitutional Court considers the case, civil servants in Berlin await news of their future allowance. While no definite decision has been made, history shows that the court takes its role as arbiter of constitutional compliance very seriously.
Given previous rulings on equal treatment and public policy, it is safe to assume that the court will closely examine the capital city allowance for any potential violations of the principle of equal treatment and pay gap requirements. If found to be in violation, adjustments will likely be required.
In the end, the verdict will undoubtedly have significant implications for Berlin's civil service and potentially shape the future of city allowances across Germany.
