Despite massive austerity pressures in the federal budget, Germany's Family Minister Karin Prien (CDU) has made the case for enabling increases to the country's parental allowance (Elterngeld). The parental allowance must "continue to remain a reliable family benefit," Prien said on Tuesday in Berlin.
At the same time, she pointed to the necessity of a "constitutionally compliant budget." Bringing both into harmony is her "mandate," she said, and in that spirit she would "negotiate with the parliamentary groups and also within the government."
In the coalition agreement, the CDU/CSU and SPD had originally agreed to raise the parental allowance, which has not been increased since 2007. However, to cover the multi-billion-euro funding gap in the 2027 federal budget, the Family Minister must cut €500 million from her ministry's budget. A reform of the parental allowance is also planned as part of these savings.
As a family policy advocate, she is "naturally against any cuts or reductions to family benefits," Prien said at a press conference in Berlin. "On the contrary, I consider increasing the minimum and maximum rates of the parental allowance to be necessary." Everything must be done in Germany "to make the conditions for potential future parents so good that people in Germany once again feel like having children."
However, "roughly €30 billion" still needed to be saved in the 2027 federal budget, the minister said. She had been asked, along with other ministries, to submit savings proposals by the cabinet decision on July 7. It would "also not be responsible toward future generations if one were to pursue unsound fiscal policy on a sustained basis."
According to Prien, declining birth rates in Germany could create financial room for manoeuvre on the parental allowance front. "In that sense, there is a demographic dividend," she said.
In an earlier interview with Deutschlandfunk, the minister had named the duration of parental allowance payments and the rules around the partnership-based division of parental leave as further possible levers for savings. What must be clear in any case, she said, is that current parental allowance recipients must be able to rely on the rules still in effect.
"I would rather look at increasing the minimum and maximum rates a bit more, as was promised," Prien said. In return, "savings from other levers would need to become possible." A precondition for any savings to the parental allowance, she added, was that families would simultaneously receive greater tax relief and that the federal government would increase its contribution to childcare.
In light of cross-party criticism of threatened cuts to the parental allowance, Prien said she considered her negotiating position in the budget talks to be strengthened. "I am confident that, following the discussion of recent days, there is now a heightened awareness across the entire coalition that families must not be the first to bear the burden when it comes to saving," she said.
Currently, the parental allowance typically amounts to 65 percent of the net income earned before the birth, with a minimum of €300 and a maximum of €1,800 per month. The basic parental allowance runs for 14 months, provided at least two of those months are taken by the father.
The German Teachers' Association warned against savings at the expense of children and called for investments in daycare centres. Association President Stefan Düll told the Rheinische Post (Wednesday edition) regarding the government's planned cuts:
"If savings are made on parental allowance and the money flows directly into daycare funding, that has a logic to it, then it continues to benefit children. It would be problematic if cuts are simply made without children benefiting from them."
Left Party parliamentary group leader Heidi Reichinnek accused Prien of "massively unsettling" families and couples with a desire to have children through her back-and-forth announcements on parental allowance. What is needed, Reichinnek said, is "a parental allowance that reliably supports families." "For that, the minimum parental allowance must be raised to €440, and the rates need to be indexed to keep pace with costs." Children "must no longer be a poverty risk," she added.
From breaking news to thought-provoking opinion pieces, our newsletter keeps you informed & engaged.
