According to a media report, Federal Finance Minister Christian Lindner (FDP) is planning to increase the child allowance in addition to further tax relief. This is constitutionally required, the “Frankfurter Allgemeine Zeitung” quoted assessments from the finance department. Due to the unexpectedly strong increase in the standard basic security requirement, a “supplement” is necessary, it was said.
According to the report, Lindner wants to increase the child allowance retroactively for this year by 228 euros to 9540 euros. Based on the current inflation forecast, an increase of a further 60 euros to 9600 euros is expected for the coming year, and in the following year by another 156 euros to 9756 euros.
On Wednesday, Lindner had already announced a three-stage increase in the basic tax allowance and a shift in the income tax rate. This is intended to compensate for the so-called bracket creep. This is understood to mean the effect that salary increases are eaten up in conjunction with inflation because a higher tax rate then applies to those affected.
Lindner stated that the relief volume for these measures would total around 23 billion euros for the years 2024 to 2026. The SPD and the Greens expressed reservations because people with high incomes would benefit the most from the measures. This would apply even more to the increase in the child allowance if child benefit is not also increased at the same time.
Legal requirements apply to the basic allowance and child allowance, as the subsistence level may not be taxed in each case. However, this does not apply to the shift in the income tariff that Lindner also planned. In April, Lindner had announced an increase in child benefit for 2025, but not for the current year. Child benefit is currently paid at a monthly rate of 250 euros per child. Lindner had also already announced the increase in the allowances in April, but did not give any figures at the time.