Child benefit (Image: © -Light-Fotolia.com)
Who is entitled to child benefit?
This text describes the legal situation up to 2004
Child benefit is regulated in the Income Tax Act (EStG), in particular in Sections 62 – 78 EStG. The Federal Child Allowance Act (BKGG) also regulates child benefit payments. Unless expressly stated otherwise, this article only refers to child benefit under the EStG.
In principle, parents are entitled to child benefit for children up to the age of 18, whereby child benefit is only ever paid to one parent (Section 64 I EStG). Child benefit is paid for children who are resident in Germany or who usually stay here.
Upon request, a parent will receive child benefit if he or she is domiciled or habitually resident in Germany or lives abroad, but is either subject to unlimited income tax in Germany or is treated as an unrestricted taxpayer for tax purposes.
In order to be considered as fully taxable, you have to be a natural person and reside or permanently reside in Germany. In addition, Germans abroad are also subject to unlimited tax liability if they are employed by a domestic legal person under public law and receive wages from them. This particularly includes members of the embassy.
- After the separation of the parents, only the parent is entitled to receive the child benefit in whose household the child lives (§ 64 II sentence 1 EStG).Tip:
Before the separation e.g. the father the child benefit received and If the child stays with the mother after the separation, she is entitled to receive child benefit. In this case, she should apply to the responsible family fund for the payment to be made to her.
- If the child in question does not live in the household of a beneficiary, the parent who pays the maintenance benefit receives the child benefit.
- For children over the age of 18 there are some special features that are shown here.
- In exceptional cases, the child benefit can be paid directly to the child, namely if none of the parents fulfills their maintenance obligation (§ 74 EStG)
Amount of child benefit and application
Since 2002 the child benefit for the first three children has been EUR 154 per month. From the fourth child, the child benefit increases to EUR 179 per month.
Written application to the family fund
The child benefit is paid out by the family funds. These are located in the employment offices at the place of residence of the beneficiary. If the beneficiary works in the public service, the family fund of the respective salary office is responsible. A written application is required.
The decision of the family fund can be appealed within one month after notification. If the objection is not accepted, an action must be filed with the tax court.
There are special regulations for children over 18 years?
- principleChildren between the ages of 18 and 27 can also receive child benefit. If the child is over 18 years of age, child benefit is only paid if the child – is undergoing vocational training, – is looking for an apprenticeship position, – is taking a break of no more than 4 months between two training programs, – voluntary social work Year. Of these above However, there may be exceptions to principles that have recently been decided. Here only the two judgments of the Baden-Wuerttemberg Finance Court (Az 2 K 40/00) and the Rhineland Finance Court should be considered-palatinate (Az 1 K 1365/02) with regard to the leave of absence from studies or child benefit between high school and community service. Currently, the revisions are still pending at the Federal Fiscal Court (AZ: VIII R 77/02 and VIII R 86/02).
- limitationsChildren of legal age are not entitled to child benefit if the child is able to entertain themselves. This is the case as soon as the child’s income and remuneration in the respective entitlement period are above the relevant limit (increased to EUR 7,680 from January 1, 2004). If the adult child marries, the parents’ child benefit entitlement ceases to apply.
There are special regulations for children over 18 years?
The parent who receives the child benefit is also entitled to a child allowance. The Child tax credit is based on the subsistence minimum and is entitled to half of each parent. This means that both the father and mother receive a child allowance of 1,824 euros.
The beneficiary initially receives child benefit, but cannot benefit from both benefits. After filing the tax return, the tax office checks which type of subsidy is more favorable for the beneficiary. The tax office checks whether the taxpayer would save a higher amount than the child benefit if the child allowance was granted instead of the child benefit.
There are still design options within the child allowance that should be discussed with a tax advisor. So the caring parent may request that the child allowance due to the other parent be transferred to them.
Child benefit according to the BKGG
The BKGG only applies to non-unlimited taxpayers. There is a limited income tax liability e.g. only if a natural person without domicile or habitual residence receives certain income domestically. The BKGG regulates child benefit as a social benefit and is also paid out by the family fund.
The BKGG includes similar regulations to the EStG, but is only paid out in special cases, e.g. in cases with international contact and in cases where children receive child benefit for themselves (e.g. orphans).
Maintenance-related importance of child benefit
Child benefit is income in itself, but is not taken into account as such by any parent, but is only offset against child support in accordance with § 1612 b BGB. A distinction should be made between underage and adult children. Section 1612 b (5) BGB also led to some discussions. This will be discussed later.
What applies to underage children?
Child benefit is only paid to one parent. If the child benefit is not received by the person liable for maintenance, the child benefits from the child benefit payment, in which half of the child benefit (154 euros) is credited (i.e. 77 euros) example: The parents are divorced and the child is 3 years old. The mother looks after the child. If the father has a net income of 2,200 euros, he is classified in the 6th income level of the so-called Düsseldorf table (as of 01.07.2003).
If the caring mother receives the child benefit, this means that the father has to pay child support of EUR 269. Due to the full deduction of half the child benefit (EUR 77), the restitutor only has to pay a maintenance amount of (EUR 269 minus EUR 77 = EUR 192). The law makes a few important exceptions to the child benefit. The most important exception is that of Section 1612 b (5) BGB.
Exception to section 1612 b (5) BGB
Before going into the overview of this regulation, it should be pointed out that it should now be made clear that this regulation is constitutional (see decision of the Federal Constitutional Court (Az 1 BvL 1/01 and Az 1 BvR 1749/01) and judgment of the BGH of January 29, 2003 (Az XII ZR 289/01, published in: FamRZ 2003, p. 445)) What does § 1612 b Paragraph 5 BGB say? According to § 1612 b Paragraph 5 BGB, child benefit is not offset up to the amount maintenance of 135% of the regular amount.
What does that mean?
You have to know the following: The Düsseldorf table is divided into 13 income groups and three age groups for minors. A fourth age group applies to adult children. A percentage is assigned to each income group. It starts with 100% in the first income group (below 1300 EUR income) and ends with 200% for the 13th income group.
The standard amount can be found in the first row of the Düsseldorf table, i.e. income group 1.
This first line is also equated with 100%. Someone who has an income of less than 1,300 euros must therefore pay 199 euros for their child who is between 0 and 5 years old, 241 euros for a child who is between 6 and 11 years old and for a child from 12 to 17 years 284 euros. Someone who has a monthly income between 1,300 and 1,500 euros falls into the second income group and has to pay 107% of the regular amount for maintenance. The amount of maintenance then increases with the income of the maintenance debtor.
From the 6th income group (monthly net income between 2,100 and 2,300 euros), 135% of the regular amount must be paid for child support. Section 1612 b (5) of the German Civil Code now states that full child allowance (77 euros) is only recognized from the 6th Income group is made, since only 135% of the regular amount can be reached here. It follows that a child between 0 and 5 years of age is entitled to at least € 192 in maintenance and a child from 6 to 11 years of age is entitled to at least € 249.
These amounts are as follows:
Amount according to the Düsseldorf table (6th income group) e.g. for a 5-year-old child: 269 euros less 77 euros (child benefit) = 192 euros; 11-year-old child: 329 euros less 77 euros = 249 euros.
In the example above, therefore, the full amount of half the child benefit (= 77 euros) was taken into account because the father had an income of the 6th income group.
But what happens if someone has less than EUR 2,100 net income?
If the maintenance person has a lower income than the 6th income group (i.e. less than EUR 2,100), the child benefit is only partially offset against the maintenance.
Another one example:
If the above-mentioned father only has an income of 1,600 euros, he is classified in the 3rd income group (1,500 to 1,700 euros). In this case, the maintenance for the 3-year-old child is 227 euros. Now one might think that the child benefit will be credited again in the amount of 77 euros. Then the following (wrong!) Calculation would result: 227 euros minus 77 euros = 150 euros.
However, this calculation cannot be made in the case of the aforementioned income, since § 1612 b (5) BGB must be observed here. This just says that the child must receive at least 135% of the regular amount (namely the above EUR 192).
Child benefit is therefore only used up to the amount up to which the specified standard amount is reached. From the 77 euros of the part of the child allowance due to the father, only 42 euros are deducted from the maintenance amount in order to get 135% of the regular amount due to the child. The father can have the remaining 35 euros credited. The calculation follows: 227 euros minus 35 euros = 192 euros.
What if the child doesn’t live with the parents? Then Section 1612 b (2) BGB applies!
If the child does not grow up with the parents, both parents are obliged to pay maintenance. Then the child benefit is due to the parent who pays the child the higher maintenance (Section 64 (3) sentence 2 EStG). Then the other person’s maintenance obligation is reduced by half the child benefit, while the child benefit recipient’s maintenance obligation increases by half.
Conclusion: As can be seen, the regulation of § 1612 b BGB is complicated and therefore one should have clarified under legal advice whether and which crediting is to be considered.
What applies to adult children?
The adult child receives maintenance during the apprenticeship phase (apprenticeship position, studies, etc.). The maintenance is based on the income of the parents. First, the income of both parents is added up. Then age group 4 of the Düsseldorf table applies.
It is important that both parents are obliged to pay maintenance. The respective share of the individual parent is then calculated. Half of the child benefit is offset against the respective liability portion. Receives e.g. if the mother receives the full child benefit, her liability share in the maintenance payment increases by half the child benefit, i.e. for 77.00 euros; for the father, the liability share is reduced by 77.00 euros.
Ultimately, it should be noted that Section 1612 b (5) of the German Civil Code does not apply to children of legal age and that child benefit is always offset against child support.
Child benefit and in particular its deduction are discussed at least once during a separation and / or divorce procedure. The area is not easy and often complicates or delays the procedure. It can therefore only be discussed through expert advice.
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