The SPD was very concerned, the Union was rather hesitant - but now it should come: the children's bonus. "This achievement will help families to alleviate the burdens of the corona pandemic somewhat and give them financial leeway", SPD family minister Franziska Giffey justified the achievement, which is part of the economic stimulus package that the grand coalition has now decided on.

The idea of ​​particularly supporting families is obvious. After all, they had and continue to suffer particularly from the restrictions. The children could not go to school or daycare for weeks, had to do without sports and leisure activities and even play with friends. In addition, there was a loss of income because some parents could no longer work or could only work to a limited extent due to the care of their children. Therefore, there was often talk of recognition for what was achieved in connection with the children's bonus. But of course the Union and the SPD also hope that the money will be spent as quickly as possible and, above all, that it will boost the economy. But how exactly does the cash benefit work?

How much is the child bonus?

The children's bonus is a one-off surcharge of € 300 on child benefit per child. The money is to be paid in three installments, i.e. 100 euros each in addition to the usual child benefit payment. If you add up the benefit for several children together, for example for a family with four children the additional amount is 1,200 euros. With a total of 4.3 billion euros, the children's bonus is the largest family policy achievement in the economic stimulus package.

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Who gets the children's bonus?

The child bonus is paid for each child entitled to child benefit. The prerequisite for child benefit is that the parents look after their children themselves and that they live in their household. This also applies to stepchildren, grandchildren or foster children. The parents must also live in Germany, another EU country, Norway, Liechtenstein, Iceland or Switzerland. In principle, children are entitled to child benefit from their birth up to the age of 18; if they are still in training or studying, this applies until the age of 25.

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Do rich families get the money?

First yes. However, families only benefit from the children's bonus up to a certain income limit. This is because the tax office checks the annual tax return to determine whether child benefit is cheaper for a family or whether the so-called child allowance of currently 7,812 euros can be deducted from the tax. From a certain income, the tax savings you get from the tax-free allowance are greater than the sum of the child benefit. The child benefit is then offset against the tax savings.

The child bonus shifts this income limit, above which parents get better with the child allowances, from currently 67,816 euros for married parents of one child who use spouse splitting to 85,936 euros. The limit increases with the number of children. For two children it would be taxable income of EUR 93,748 - not to be confused with gross income, which can be significantly higher. From this sum, parents will not have any additional benefit from the child bonus. However, thanks to the tax savings, they are still better off than child benefit recipients who receive the child bonus.

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What about families living on unemployment benefit II (Hartz IV) or social welfare?

These families should also receive the child bonus - unlike normal child benefit increases. Families who have to live on Hartz-IV benefit from these, namely because the child benefit is offset against the standard rate. That should not happen with the children's bonus.

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Do I have to apply for the children's bonus?

It is not yet 100% certain. So far there is no draft law, only a political decision. But one can assume that an additional application will not be necessary. The bonus would then simply be paid out together with the child benefit - which must be applied for after the birth of a child. Hartz IV recipients will probably not have to make an application either, but their standard rates will simply be changed accordingly.

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When does the bonus come?

This is also not yet certain. Government circles say that this could be the case at the beginning of July 2020.

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What else is there for single parents?

Single parents are even more affected by the Corona crisis than families with two parents. Because they have even bigger problems organizing care. They are also at the highest risk of poverty anyway. That is why they should receive additional support. For the years 2020 and 2021, the amount that they can additionally deduct from the tax (tax relief) will be increased from 1,908 to 4,000 euros.

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How useful is the support?

From the federal government's point of view, it would make the most sense if the children were simply allowed to spend the money themselves. Then it would probably immediately invest in new cell phones, tablets or other toys that the parents would never buy. This would serve the economy the most. But that should not be the case if families simply save the money.

It is therefore not only sensible from an equity point of view, but also from an economic policy point of view, that the child bonus benefits families with less income than those with high incomes. Because the latter tend to save it. The bonus is still not a contribution to the fight against child poverty. After all, it is a one-off payment. But this is also not the only benefit for families that the federal government is planning in its economic stimulus package: it plans to invest an additional 3.5 billion euros in daycare centers, all-day schools, all-day care and training places. And of course families also benefit from the reduction in value added tax or falling electricity prices, even if these are not special family benefits.

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