Child benefit in Germany is due to rise from €259 to €267 per child per month in January 2027, and to €272 in 2028. That is part of the Income Tax Reform Act 2027, which the Bundestag is debating in first reading today. Nothing is final: the bills now go to the Finance Committee, and both the Bundestag and the Bundesrat must still approve them.
What families would actually get
The child tax allowance would climb from €9,756 to €10,056 in 2027 and €10,236 in 2028. The basic allowance would rise to €12,564 and then €12,900, and the lump-sum deduction for employees’ work expenses from €1,230 to €1,430. According to the Bundestag, a family with two children and €60,000 of taxable income would be better off by more than €600 a year from 2028. Finance Minister Lars Klingbeil (SPD) called the financing “a question of fairness”. The government puts the total relief at roughly €10 billion a year, with full effect from 2028.
The bill is funded largely by higher earners: the top-rate tax would start earlier, at €250,000, with a new 47 per cent rate from €280,000. Ordinary households would feel some changes too. The deductible share of craftsmen’s bills falls from 20 to 15 per cent (maximum €900 instead of €1,200), and the flat tax on mini-jobs rises from 2 to 5 per cent. On the plus side, tax-free Sunday and holiday supplements would apply up to an hourly wage of €75 instead of €50.
Child benefit without an application, but not for everyone
On 9 July the Bundestag also passed a separate law letting the family benefits office waive the application in certain birth cases (new § 67(2) of the Income Tax Act). Specialist portals reported that Bundesrat approval was still pending; the start is planned for 1 January 2027. Younger siblings in families already receiving the benefit would come first, from around March 2027, with first-born children following later. Parents with no bank details on file, children living abroad or unclear entitlement will still have to apply as before.
The coalition is not united. According to a leaked letter, the Economy Ministry under Katherina Reiche (CDU) considers the plans too modest and wants more done about bracket creep. Klingbeil replied that he is open to changes in the Bundestag, “but the money still has to be found first”. The Federation of German Industry (BDI) called the draft a disappointment, and the Greens want child benefit raised by more than the allowances, since high earners gain most from allowances.
Our assessment: the direction is set, but the figures may well shift before the vote, above all on financing. Parents do not need to do anything now. Anyone already receiving child benefit gets the increase automatically, and the tax office checks by itself whether benefit or allowance is more favourable. Ukrainians holding a residence permit under § 24 of the Residence Act can claim child benefit; if in doubt, ask the family benefits office or a free migration counselling service.
Sources: German Bundestag, beck-aktuell, Volksstimme/dpa, Lohnsteuer kompakt, Tagesschau
