Child benefit is a worthwhile thing: the state pays at least € 2208 a year, even to adult children who are still in training. However, the recipients have to be extremely careful not to make too much money. From the first euro over the border, all child benefit is gone. It will be different from next year.
Students in their first degree can now earn more with confidence.
(Photo: picture-alliance / dpa)
Parents of adult children know this: Every year the family fund demands proof of the income of the offspring. These are usually income tax cards, tax assessments, earnings certificates or approval notices from various offices. This is quite expensive for everyone involved. And that’s why it will end this year. This is one of the positive effects of the Tax Simplification Act, which the Bundestag recently passed.
For families this means less bureaucracy, for children it may also mean more money – at least better opportunities to earn one. The income check also removes the previous limit for income and earnings. So far, adult children are not allowed to earn more than 8004 euros, otherwise there is no child benefit anymore. Advertising costs and any social security contributions paid, if any, can be deducted from this. However, if the maximum income determined in this way is exceeded, it is not only child benefit that is at stake. The child allowance for Riester contracts also goes away. And those who still get a home allowance must waive the child allowance.
infamous "Fallbeileffekt"
The financial authorities have no mercy at the border: even one euro above the permissible maximum income tilts the entire funding. This so-called "Fallbeileffekt" has often occupied German courts. Only last year the Federal Constitutional Court declared the practice to be lawful. At the time, a father had sued, whose son’s child benefit was canceled – because of 4.34 euros (Az .: 2 BvR 2122/09).
In the future, parents and children can save themselves the math. Children under the age of 25 are automatically eligible for child benefit if they are in initial vocational training or in first degree, i.e. have not yet completed their studies. And even for the second degree or further vocational training there can still be child benefit as long as the offspring does not work more than 20 hours a week on the side. This should benefit not only students who go to work during the semester break or during their studies, but also many trainees. In the third year of training, the training allowance quickly breaks the child benefit limit.
The removal of the income limit Incidentally, it does not only concern money that you have earned yourself. In the future, the offspring will also be able to earn unlimited money or investments, provided the other requirements are met. This could open up completely new opportunities for wealthy families and their tax advisors. In any case, tax-saving asset transfers will in future no longer fail due to child benefit, which even the wealthy are reluctant to do go leave: Currently there are at least 2208 euros per year for the first and second child, from the fourth child it is even 2580 euros.
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