Child bonus for families – that’s how much money there will be starting in the fall

More money for families: in the corona crisis families get a child bonus. This is what the grand coalition has agreed on. Another bonus could be paid out starting in the fall. Find out what’s in it for families in 2021 here.

Woman with baby on lap in front of laptop

It is often not easy to reconcile family and career. Especially in the pandemic and stresses in the home office. Financial remedy is the child bonus.

Families face challenges all their own in the Corona pandemic. Homeschooling for the kids, home offices for the parents and emergency daycare in daycare centers: in the Corona Tax Relief Act, the federal government has a Children bonus The government has adopted a new program to help families financially. The amount of the one-time payment is 150 euros. From autumn 2021, there is to be a further bonus. Focus on low-income families.

100 euros per child: Needy families in Germany can hope for a one-time grant this fall. The 100-Euro-Bonus should per child for example for sports or leisure activities- will be distributed. However, the exact conditions have not yet been determined.

It is clear that this bonus is part of the planned Corona catch-up program, according to SPD leader Saskia Esken.

Who gets the new 100 euro bonus?

Those who receive benefits from the education and participation package should also receive the new 100-euro bonus. According to Eskens, the two-billion-euro Corona catch-up program will be launched in the German cabinet. The payment is planned for autumn 2021.

The first step in May will be the child bonus of 150 euros per child, which has already been decided. All children with entitlement to child benefit are entitled to the money.

The aim: to support children and young people, especially those from disadvantaged families. A total of two billion euros should flow from the federal government, as well as additional funds from the states. A billion euros is to be used to support catching up on learning due to the absence of face-to-face teaching. The other billion euros is to go toward promoting development and participation opportunities.

In addition to the leisure bonus, other areas are to be promoted:

  • Early childhood development, for example in language centers
  • extracurricular education
  • School social workers, university graduates and volunteers in the social year
  • child and youth welfare facilities

Who receives the child bonus?

Billion-dollar support to get families through pandemic in 2021, too. This is what the leaders of the CDU/CSU and SPD decided at their first coalition committee of the year. Specifically, this means that families will receive, as they did in 2020, a Child bonus. The supplement to the child benefit is a one-time payment of 150 euros. Last year, the amount of the one-time payment was 300 euros.

Support is also given to low-income earners, businesses, gastronomy and culture. SPD Federal Chairman Norbert Walter-Borjans expressed satisfaction after the negotiations.

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The child bonus is paid for each child for whom there was entitlement to child benefit for at least one month in 2021.

How the child bonus 2021 is calculated?

The child bonus will be offset against the tax-free child allowance, but will not be counted towards the basic allowance. There is a one-time fee of 150 euros. Last year, this amount was still 300 euros- above all to raise the consumption mood and to stimulate the weakening economy.

Child bonus will generally be treated like child benefit. Like child benefit, the bonus is divided equally between the child’s needs and the child’s allowance.

This is how much child bonus there was in 2020

In 2020, families received the payment of a bonus of 300 euros in addition to the monthly child allowance. The consequences of the corona crisis should be cushioned for families. According to Franziska Giffey, Federal Minister for Family Affairs, Senior Citizens, Women and Youth, more than four billion euros have been paid out to around 16 million children.

One-time corona allowance also for adults

150 euros: Adult basic income support recipients should also receive this Corona subsidy. For the self-employed and employees with small incomes, access to basic benefits will also be extended until the end of 2021.

Family bonus reaches out to parents and children

Family bonus was one of the buzzwords in 2020: from the 7. September the additional money was distributed. Parents of around 18 million children in Germany received an extra 300 euros for each child staggered 200 euros in September, 100 euros in October. The family bonus is one of the ways in which the government is countering the effects of the Corona crisis wants to mitigate. Federal Family Minister Franziska Giffey stated: "The child bonus is socially fair.“

In the fight against the corona crisis, the CDU/CSU and SPD have agreed on an economic stimulus package totaling 130 billion euros in 2020. All parents entitled to child benefit received a one-time bonus of 300 euros per child.

Parents with a higher income, who benefit more from the child allowance than from child benefit, don’t really get anything out of the bonus overall. The family bonus is not counted towards basic income support. This means that people who receive social benefits such as Hartz IV will receive the additional 300 euros.

When is the child bonus paid out? The digit decides

The final digit of the child benefit number determines how quickly families see the money in their account. If this is zero, the payment is made first. Numbers 1 to 9 will then be disbursed gradually over the course of the month.

These Corona aids are coming in 2021

  • The coalition committee has decided that families will also receive a child bonus in 2021 because of the Corona crisis
  • The VAT cut for the catering industry will be extended
  • There is additional tax aid for companies
  • Supplement for recipients of basic income support is coming

Review: The plan for the family bonus

Finance Minister Olaf Scholz (SPD) planned for parents to receive a one-time payment of 300 euros for each child- and the plan worked. It was intended to boost the flagging economy in times of the Corona pandemic. In total, the family bonus would cost between five and six billion euros. The NRW state government led by Armin Laschet (CDU) has even proposed a bonus of 600 euros per child. Families who manage the balancing act between home office, home schooling, childcare and work in the Corona crisis should be rewarded more clearly. In 2018, there were about 11.44 million families in Germany, according to Statista. 300 euros should now be paid to each child, regardless of how much the parents earn.

The news that the 300-euro bonus will even be paid out if the mother is still pregnant attracted a lot of attention. The child must be raised to 31. December to be born at 23:59.

Is there an income limit for the family bonus??

Up to a taxable income of 90.000 euros per year, families benefit from the family bonus.

Will the family bonus be offset against social benefits?

The family bonus will not be deducted from the basic income support. Recipients of social benefits such as Hartz IV or housing benefit receive the 300 euros in full in addition to the standard rates. However, parents with higher incomes, who benefit more from the child allowance than from the child benefit, will have nothing from the bonus. The money is paid out to them, but the distribution is offset against the allowance when they file their tax return.

Who gets the child bonus for separated families??

In the case of separated or divorced parents, the payment is based on the transfer of child benefits. Child benefit is only paid to one parent at a time. In the case of parents who are separated, the parent in whose household the child predominantly lives. This means that the child bonus is paid to the parent who also receives the child benefit.

What does the economic stimulus package provide for single parents?

For single parents, in addition to the family bonus, a tax bonus is planned for 2021. Accordingly, the relief contribution for single parents of 1.908 euros to 4.000 Euro to be raised. This regulation is valid for a limited period of time for the years 2020 and 2021.

Child bonus: Critical voices from politics

The SPD wants to push the family bonus further, but the CDU/CSU is rather critical of it. Originally, the proposal came from Family Minister Franziska Giffey (SPD). Wouldn’t it make more sense to end home schooling?? One of the reasons for the family bonus is that parents could also use the money to buy laptops or tablets for the children so that they can learn digitally better. Parliamentary group leader Ralph Brinkhaus (CDU) told the "Frankfurter Allgemeine Sonntagszeitung" newspaper, he rejects the one-time payment for families, as it originally came from Family Minister Franziska Giffey. Antje Tillmann (CDU), financial policy spokeswoman for the CDU/CSU parliamentary group, blows the same horn and told the "Rheinische Post" newspaper: "Due to the massive new debt that the aid measures have already caused, a family bonus for all families is not targeted enough.“ According to Tillmann, it would be better to link the bonus to the granting of the child allowance, which only needy parents receive. „To make families better off overall, bringing forward the next increase in child benefits would be the better way to go", said Tillmann.

Markus Soder (CSU), on the other hand, is open to the family bonus. „We need to strengthen domestic demand to partially offset weaker exports", Soder said to the "Welt am Sonntag". „We should bring forward the abolition of the solidarity surcharge. This would be the biggest tax cut in more than 30 years. A family bonus also makes sense.“

Social associations demand more support

While the purchase premium for cars was being discussed, social associations are calling for more support for the elderly and low-income earners. The educationalist Ulrich Schneider of the general association "Der Paritatische lists that free school lunches are currently cancelled and that many low-income earners do not have the opportunity to work in a home office and take care of their children. Saleswomen have a presence job. These families must now be helped acutely, demands Schneider.

Further expand aid programs for the self-reliant

Another innovation in June 2020 is the expansion of the assistance program for the self-employed, including freelance engineers and artists. Above all, this group is to benefit from tax breaks in the future, as the so-called loss carryback is to be extended. This will make it easier for companies to offset losses from 2020 against profits from previous years.

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