Calculations published by the Institute of the German Economy (IW) this Wednesday show that the parental allowance has lost nearly one-third of its original value since its introduction in 2007.
According to the Family Ministry’s current plans, the parental allowance is slated to change, with the payment period being reduced from 14 to 12 months, provided both parents take three months of professional leave each. While the minimum payment is set to rise from €300 to €330 and the maximum from €1,800 to €1,900, the IW’s figures indicate that the allowance has actually lost 31.5 percent of its purchasing power over the past 19 years, up to 2026. To fully offset inflation, the maximum rate would need to reach approximately €2,591, and the minimum rate €432.
The IW further argues that the new claim logic could penalize families with unequal incomes. Currently, recipients are entitled to twelve months of basic parental allowance even if only one parent takes parental leave. The reform would cut this allowance to nine months for single recipients, creating a three-month gap that lacks both parental allowance and eligibility for care benefits. This change is predicted to particularly affect larger families where the mother has reduced her presence in the labor market to care for older siblings.
