Germany Clarifies Tax Status and Future Increases of Pflegegeld and Entlastungsbetrag

In Germany, Pflegegeld is a non‑taxable social benefit for people receiving home care who have at least care grade 2. Recipients can use the full amount for care‑related costs, and close relatives, friends or other persons with a close personal relationship who receive the money as recognition for their work are also exempt from income tax. Non‑related recipients must declare the payment as taxable income. The current monthly amounts are €347 for grade 2, €599 for grade 3, €800 for grade 4 and €990 for grade 5, with slight adjustments planned for 2024 and 2025.

The Entlastungsbetrag, another benefit for people in home care, allows up to €131 per month (currently €125) to be used for relieving caregivers or promoting the care‑receiver’s independence. The amount can be carried over if not fully used. Legislation (§ 30 SGB XI) mandates that the benefit be increased on 1 January 2028 by the cumulative core‑inflation rate of the preceding three years, capped by the rise in average gross wages. The current annual entitlement is €1,572, and the exact 2028 level will depend on inflation and wage trends.