Family policy - it started at 25 dm per child (archive)

Child benefit was introduced 50 years ago

Stefan Sell in conversation with Katrin Heise

The social scientist Stefan Sell reminds that the child allowance paid for the first time in 1964 was initially paid by the employers. Today’s "Infantilization of poverty" can’t prevent it.

Katrin Heise: In the years before 1964, i.e. before the Federal Child Benefit Act, a social obligation towards large families had been felt and 25 marks a month had been paid from the third child, out of employer contributions. From ’64 on there was a fundamental change, child benefit is raised from tax revenue, starting with the second child. Today there are 184 euros a month from the first child, and a little more from child number three.

Shortly before the broadcast, I spoke to social scientist Stefan Sell about child benefit. Mr. Sell, what was the reason ’64 to pay child benefit as a state benefit from tax revenue? From a demographic point of view, there was actually no reason for it, there were more children than ever!

Stefan Sell: Yes, in order to understand that, we may have to go a step further back on the timeline. Because the first child benefit – in quotes – already existed during the Nazi era. Back then that was called "child benefit", the only "Aryan" Families received, which was introduced in 1935, was initially a one-off allowance and then from 1936 a monthly child allowance. You got that from the fifth child, and in 1938 from the third. And why was that introduced at the time of National Socialist rule: Even then there were two lines of reasoning. On the one hand, it was a socio-political dimension, you wanted to give some financial support to these families, which were heavily burdened, but that was always embedded in the population policy of the National Socialists, who wanted to promote wealth of children.

Heise: And now we jump 30 years further, namely in the 60s, where these are "Aryan" Justification, of course, this type of support no longer played a role. What were the arguments??

sell: Well, as arguments officially again, so to speak, as the quasi-official line, a socio-political justification, just the support of large families. Perhaps, in order to understand how it has changed, one has to make it clear that child benefit was introduced in Germany in 1954, but at that time it was very different. You had already mentioned that at that time you got this 25 DM for the third and each additional child, and that was financed by employer contributions.

"In the beginning there was wage policy"

Now one or the other may be wondering why through employer contributions? Because back then you had an explicit wage policy philosophy. Because it was quite explicit at the time, wages should be able to provide for a family, and it was said: the single-earning man who, for example, has three or more children to look after alongside his wife, then earns relatively little from that point of view the state has a reason to support it. But because it was a wage supplement, so to speak, back then – actually consistently, I think – you had to finance it through employer contributions. But that was then changed again relatively quickly and from 1964 we have these family benefits, where federal funds are used to finance these contributions from tax funds. So, in the beginning there was wage policy.

Heise: And then you said social arguments. So, the many children need support. The value orientation, when did it come about, i.e. underline family as value?

sell: So there are two answers to this question, so to speak. I could now answer formally and say, so to speak, this explicit value orientation, as far as children and the number of children are concerned, is actually interestingly only recently. In the course of the discussion that we have had due to the drop in the birth rate since the beginning of the 1970s, this whole demographic discussion has at some point become independent and at the latest since the 1990s, so-called family policy benefits have always been either open or hidden under the concurrent line of reasoning, so that one can increase the number of children. That would be the official answer.

Stefan Sell (dpa / picture alliance / Horst Galuschka)

Unofficially, of course, it always resonated with the question, I support families in order to stimulate the number of children. But as I said, that wasn’t the problem in the 1960s, because we had the baby boomers. But then we actually have an intermediate step. And this intermediate step is the fact that in the 1970s we then had a clear focus on the issue that the Federal Constitutional Court should also make various judgments – the most important thing was in 1990, when people said there in Karlsruhe, that the subsistence level should not be allowed are taxed – we suddenly got a fiscal, a fiscal dimension into this issue. And that mixes up. So there are always several moving lines.

Heise: The way families are encouraged, Mr. Sell, is a hotly debated field to this day. Germany has decided to primarily support the families directly, so to speak to hand over the money to them and not to interfere anymore, at least that was often the case. Other countries tend to put the money in day care centers, in education, and so on. Describe the course of the debate, what was the reasoning for Germany??

sell: Yes, the reasoning for Germany, and I think that is very, very important for the listeners, because it is always mixed up: they read or listen often, we spend so many hundreds of billions on family support, and then people think this supports families. And these amounts include, for example, the almost 40 billion euros that we currently spend on child benefit, which are thrown in as family support. But you just have to know: two thirds of this child benefit of almost 40 billion are not family support, but go back to a ruling by the Federal Constitutional Court in 1990, where the constitutional judges said that every citizen must not be taxed on his or her minimum subsistence level.

And if the state does it anyway – and the citizens of a family are also citizens – then at least, so to speak, it has to do with what it took too much of the family in the form of child benefit – and earlier and now child allowances in the income tax – return it. And that’s why we have to know that two thirds of the family’s child benefit is, so to speak, only the reimbursement of taxes that are too much. At most a third of those who don’t pay taxes at all could be called family support.

"You better support certain children"

Heise: Then the family support, done directly, is actually not that high in Germany?

sell: That’s the way it is. And that’s very, very important. Because, with these numbers that you always hear here – we spend the most money on direct payments to the families, the 220 billion, which are then always reported there – you have to take a good chunk of it because so to speak that this is simply the return of previously taxed income, which should not have been taxed. And now we are on the problem: Of course, the Germans spend a lot on income benefits in the form of child benefits, for example, but not for everyone, but we have two problems: We have the problem with these income replacement benefits, not all children are supported equally , rather one supports certain children better – in quotation marks – namely, the children of married families are better placed, so to speak, and children of families with higher incomes.

Because by reintroducing child allowances instead of child allowance – that was in 1983, the child allowances were reintroduced in tax law – let me put it bluntly, the children of families with high incomes , more about the tax return than, for example, a small employee who earns so little that he pays no taxes at all and only receives child benefit.

Heise: At the same time, we have two other problems: we have increasing child poverty and we have falling or, in any case, stagnating birth rates. The effectiveness of child benefit does not seem to be very great

sell: Yes! But here we come back to your initial question: Even in today’s discussion, an either-or is always open again. Either payments, monetary transfer payments to families, or infrastructure in the form of, for example, day care centers. As so often in life, the truth lies in the middle. So that means we actually need – we know from research – a reasonable mix between material security of families and an enabling infrastructure. Because day-care centers, for example, or all-day schools only enable – but this is very important – employment by both parents, for example. And so far we’ve had a clear imbalance here.

I would like to remind you that, of course, we have made progress here in recent years if you think about expanding the daycare, expanding the all-day schools, everything could have happened much faster and more and better, but you are starting now change course. Nonetheless, you put your finger on the wound when you said – and you have to be clear – that today when we speak of poverty, we are talking about infantilizing poverty, that is called, Children are most affected by actual income poverty in Germany.

That was different in the 1960s. Back then, only every 75th child was affected by social assistance, while today, take a look at Berlin, for example: Almost every third child grows up in a so-called Hartz IV household. And why this is so: This is less a failure of child benefit, but the fact that the changes in our economy on the labor markets are now brutally reflected here. Because indeed, even at a much lower level, but in the 1960s and 1970s, with the income you earned there at the time, you could live above the poverty line at that time, and you could also take good care of your family. And that is unfortunately no longer the case in many cases.

Heise: 50 years of family policy including child benefit. We looked back on this together with the social scientist Stefan Sell. Mr. Sell, thank you very much and wish you a nice day.

sell: Thanks, you too.

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