German Kindergeld reform and benefit increases

The German government is implementing reforms to the Kindergeld (child benefit) system involving both administrative automation and increased financial support.

In September 2026, the Bundestag approved regulations to automate payments through the Familienkasse starting in 2027. This rollout is planned in two stages: a first phase in March 2027 for families already receiving benefits for older children, and a second phase in November 2027 for families with their first child.

Concurrently, the coalition government reached an agreement to increase monthly payments to address rising costs for food, rent, and energy. Following the Federal Cabinet’s approval of a draft income tax reform, child benefits are scheduled to rise in two stages: from the current 259 euros to 267 euros in 2027, and eventually to 272 euros per month by 2028. This represents an annual increase of 156 euros per child compared to 2026 levels. The broader tax reform also includes increasing the basic tax-free allowance to 12,564 euros in 2027 and 12,900 euros in 2028.

However, the reform faces scrutiny. While the government aims to provide relief for small and middle-income families, rising contributions to pension, health, and long-term care insurance may offset these tax savings. Some critics argue that the net financial benefit for workers could be minimal or even negative. Additionally, there is public debate regarding the potential removal of the 25-euro child supplement (Kinderzuschlag) and the rising costs of school supplies, which saw a 6.2 percent increase in spending for the 2026 school year.