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.

Following approval by the Bundestag, the Bundesrat has approved the reform to implement automatic payments through the Familienkasse starting in 2027. Finance Minister Lars Klingbeil (SPD) expects the change to reduce annual applications by approximately 300,000. The rollout will occur in two stages: an initial phase in early 2027 for families already receiving benefits for older children, followed by a second phase for first-time applicants. To facilitate this, authorities will exchange information directly, provided the child has a tax identification number. The Deutsches Kinderhilfswerk has welcomed the reduction in bureaucracy but noted that the initial phase will only benefit families where the child resides in Germany, at least one parent is employed in Germany, and the Familienkasse possesses all necessary data. This phase specifically targets families with a second child or more, meaning first-born children and certain unemployed parents will still require manual applications for the time being.

Concurrently, the coalition government reached an agreement to increase monthly payments to address rising costs. Child benefits are scheduled to rise from 259 euros to 267 euros in 2027, and to 272 euros per month by 2028. The broader tax reform also includes increasing the basic tax-free allowance and adjusting the Kinderfreibetrag (child tax allowance).

Additional debates have emerged regarding child sick pay (Kinderkrankengeld). Health Minister Carsten Linnemann has announced plans to return to pre-pandemic standards by reducing entitlements starting in 2027. This would limit benefits to 10 days per child for parents and 20 days for single parents. This proposal has faced criticism from regional leaders, including Clemens Hoch, the Rhineland-Palatinate Health Minister, who warned that such reductions could jeopardize family income and employment.