(2023)
Minimum standard of living: Are the child allowances unconstitutionally low?
The minimum subsistence level for children must be exempt from tax for constitutional reasons. This is achieved through the child allowance and the BEA allowance (for care, education and training needs). The tax office automatically checks whether these allowances or the child benefit paid during the year are more favourable.
The BEA allowance is 2,928 Euro; the child allowance is 6,024 Euro (year 2023).
The Lower Saxony Finance Court expressed serious doubts about the constitutionality of the child allowance for the year 2014, which led to a suspension of enforcement. The Federal Fiscal Court partially agreed (Lower Saxony FG of 16.2.2016, 7 V 237/15).
Currently, the Lower Saxony Finance Court has deemed the calculation method of the child allowance unconstitutional and has referred the matter to the Federal Constitutional Court. The judges criticise the fact that the child allowance is age-independent, although the social welfare standard needs for children are age-dependent. They demand an increase in the child allowance (FG Lower Saxony of 2.12.2016, 7 K 83/16).
The decision of the Federal Constitutional Court could take up to ten years and affects parents who receive child benefit or a child allowance, as an increase in the child allowances affects church tax and the solidarity surcharge.
