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"With the proposal, Lisa Paus is playing parents off against each other"

Federal Family Minister Lisa Paus (Greens) is not necessarily a PR talent.

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"With the proposal, Lisa Paus is playing parents off against each other"

Federal Family Minister Lisa Paus (Greens) is not necessarily a PR talent. In public appearances, she often seems wooden, her voice is always a bit monotonous. But Paus tries to compensate for her lack of radiance with perseverance. When she declares a project to be a priority, she is determined to see it through.

This is currently the basic child security: In the future there will be a basic amount for all children, plus an income-related additional amount for low earners, automatically paid out via a child security portal.

Paus has registered a requirement of twelve billion euros with Federal Finance Minister Christian Lindner (FDP). But because he shows little inclination to pump more billions into family burden compensation beyond the recent increases in child benefit and child allowance, Paus has to come up with something.

Her latest idea: a reduction in the child tax allowance. This means that the child's subsistence level and an amount for education, upbringing and training (BEA) are tax-free.

For 2024, these sums amount to 6384 euros for the subsistence level and 2928 euros for the BEA, i.e. a total of 9312 euros a year, which the tax authorities are not allowed to touch. This serves the so-called horizontal tax justice: Parents should not be worse off than childless people with the same income. In the income tax assessment, the child benefit of currently 250 euros per month is offset against the tax savings - the so-called favorable test.

The crux of the matter: the systematics of the tax system ensures that parents with increasing income also have a higher relief effect from the child allowance. "It is in the nature of things that the progressive income tax rate increases the relief with income, because the tax burden also increases disproportionately with income," explains Martin Beznoska, tax expert from the employer-related Institute of German Economics. High earners therefore benefit more from the child allowance than from child benefit.

And that's exactly what is a thorn in Paus' side. "Top earners receive the equivalent of 373 euros per month through the child allowance, low and normal earners only 250 euros through child benefit," she calculated this week at the presentation of the family barometer. She finds this unfair – and also senses an additional source of income for basic child security.

The Federal Constitutional Court has repeatedly declared the child allowance to be untouchable, including the BEA contained therein. However, the most recent verdict is already ten years old, according to Paus. There is now a much better childcare infrastructure and the additional tax deductibility of childcare costs.

Here she sees a lever to significantly reduce the allowance. She has already commissioned a legal opinion on this. Support comes from the German Institute for Economic Research. There, too, the monthly share of 244 euros for care, education and training needs is considered excessive, according to economist Stefan Bach. "You can't completely delete it, but you can reduce it to an appropriate level."

But there has also been strong resistance to the plan. “The child allowance is not a social benefit that can be restricted at will. It serves solely to exempt the children's subsistence level from the parents' income tax, which is mandatory under constitutional law," says Wolfgang Scherf, emeritus professor of economics at the University of Giessen.

Family associations are also up in arms. The President of the Catholic Family Association, Ulrich Hoffmann, said he considered the proposal to reduce the allowance for the child's care, education and training needs to be unconstitutional. “The exempt amount has been recognized by the Federal Constitutional Court. Reducing it in the current inflation of all things after it has only been raised moderately once since 2010 cannot be justified.” like Hoffmann.

The FDP is also arguing in this direction. "The fact that Paus wants to reduce child allowances is a slap in the face to millions of families. There are no additional burdens with the FDP parliamentary group, ”said the deputy FDP parliamentary group leader Christoph Meyer. The traffic light coalition is already increasing family benefits by seven billion euros a year. "Family Minister Lisa Paus should now take care of digitization and administrative simplification."

Meyer is entirely in line with Finance Minister Christian Lindner (FDP), who announced on Twitter that the federal government is already doing a lot to combat child poverty with the recent increases in child benefit, child supplement and immediate supplement. “Many services are not called up because they are unknown or complicated. Changing that should be the priority.”

The Ministry of Finance rejects a reduction in the tax-free allowance. At the request of the CDU finance politician Antje Tillmann on February 28th in the finance committee, Lindner's department announced: "The tax exemption brought about by the BEA is constitutionally required, because the parents' ability to pay is generally reduced by the need for care, the need for education and the need for care in the event of illness and care.”

Of course, children from financially disadvantaged families should be supported more by society than other children, says Tillmann. This is already the case today through various social benefits. Her conclusion: "With the proposal to reduce the tax allowance for children in order to finance basic child security, Federal Minister for Family Affairs Lisa Pau is playing parents off against each other."

"Kick-off Politics" is WELT's daily news podcast. The most important topic analyzed by WELT editors and the dates of the day. Subscribe to the podcast on Spotify, Apple Podcasts, Amazon Music, among others, or directly via RSS feed.

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