Sat, 06 Jun 2026 Berlin 23:56 DE / UKR / EN

Budget Crisis: German Government Plans Cuts to Parental Allowance

The German government wants to reduce spending on parental allowance by around 350 million euros in 2027 and 395 million euros in 2028, as reported by the FAZ. The reason is rising costs for defense, debt service, and pensions, which are shrinking other fiscal leeway.

Budget Crisis: German Government Plans Cuts to Parental Allowance
Photo: media0.faz.net

The budget framework approved by the cabinet envisions that the budget of Karin Prien (CDU) will shrink by half a billion euros each in 2027 and 2028. The ministry’s total volume currently stands at 16.7 billion euros. The savings on parental allowance are part of these cuts, as the FAZ reports.

Prien is seeking understanding for the austerity plans. She is “showing solidarity” with what the coalition committee agreed, she told Welt. “Responsible policy toward families and future generations also includes a policy that consolidates the budget,” Prien said. The coalition agreement between the Union and SPD had originally promised an increase in parental allowance – now this collides with fiscal reality.

Criticism comes from within her own ranks: CDU Secretary General Carsten Linnemann had previously advocated for maintaining the benefit. Parental allowance is “not a social benefit” but a “promise to the young generation,” he told Bild newspaper. Johannes Winkel, chairman of the Young Union, warned in Spiegel against making the reform process absurd through cuts.

The federal government currently pays around 7.5 billion euros annually in parental allowance to young families. The benefit ranges from 300 to 1,800 euros per month, depending on lost income. Parental allowance can be claimed for at least twelve months; additional months are added if both partners participate. The government has not yet specified how the savings will be implemented.

Source: www.faz.net