Merkel Pays from Today 300 Euros Per Child Regardless of the Parents’ Income

The Family Benefits Office will pay this single payment, initially 200 euros in September and another 100 euros in October.

As of this Monday, the parents of all the children living in Germany, who are about 18 million, will receive 300 euros per child directly from the State. It is one of the measures designed by the Angela Merkel government to fight against the economic paralysis forced by the pandemic and its objective is to promote consumption, while helping the lives of minors to be less affected by the stoppage economic. The Family Benefits Office will pay this single payment, initially 200 euros in September and another 100 euros in October. It is not necessary to apply for the child allowance. It is automatically paid together with the money that all children registered on German soil already receive, called Kindergeld and which amounts to 192 euros per month, 198 for the third child and from the fourth 223 euros per child per month. All children who have received this benefit for at least one month in 2020, that is, who are already in the system, will also automatically receive the “coronavirus bonus”.

“We are going to use it to help us buy a computer,” says Charlotte, a mother of two children aged 8 and 10, “there are more and more online classes and what until now seemed a luxury, even somewhat harmful, a computer the children’s room is now necessary ”. “We have not thought about it yet, the boys have some ideas, maybe we will go out on a weekend or in the autumn holidays,” says the mother of three, at the door of the same school in Berlin. 61% of beneficiaries want to spend the bonus in whole or in part, as shown by a survey commissioned by the Institute for the German Economy (IW). 24% of those surveyed say they will spend the child allowance in full; 37% want to spend it partially; and 39% want to save the bonus entirely.

This aid, like the Kindergeld, is granted to children regardless of the parents’ income. In the highest income group, 45% have no concrete plans to spend the money, in the middle group only 34% and in the lowest income group 39% prefer to save it for worse times. Of course, at the end of the year, this bonus will enter the tax calculation, so that the higher the parents’ income, the more taxes they will have to pay for that help received. The Ministry of Finance has calculated that eight out of ten families will be able to fully benefit. A couple with three children and with an annual income of up to about 67,800 euros will not have to pay taxes on that money, for example. In the case of parents with only one child and an annual income of € 86,000, there will hardly be any of the bonus left when they make their 2020 income tax return.

“The child voucher will serve to mitigate the new needs of families, who now face new expenses such as the acquisition of masks and disinfectant gels until periods of time in which children are at home instead of going to school,” he justifies the expert on families of the German Institute for Economic Research, Katharina Spieß, “it is clear that it will not cover all the needs, but it will be a help and at the same time it will stimulate the consumption of families, which due to economic uncertainty are saving more than normally , an attitude that does not contribute to the momentum of the economy ”.

The IW institute estimates that around 2,300 million euros of the total of 4,300 million that will be distributed by the child voucher will flow rapidly to consumption, so that companies will also benefit. According to the trade union-oriented Hans Böckler Foundation, this is a measure that will have greater effects on the economy than the reduction of VAT, and claims to raise the child benefit or reduced working hours.

In reality, it is not a newly created measure, but inspired by decisions already taken in the previous crisis. In January 2009, the German government already put in place a surprising economic boost package that included direct measures for families with children. “The most positive thing about this measure is that it is not necessary to request the aid, that the money comes automatically, so the State saves a lot in bureaucracy”, says Jan, father of two children aged 15 and 17, “in our Anyway, my children know about the help because they have seen it on the news and are waiting for it to arrive because they have their own plans for that money. They may spend it in a different way than we would have done it, but I think it is good for their citizenship education to be able to decide it themselves and thus experience that the State takes care of us. That will give them confidence in the system. “