SteuerGo FAQs

What impact does my child's stay abroad have on the child allowance?

The child allowance and the BEA allowance (for care, education or training) are independent of the child's place of residence, as long as the parents are fully liable to income tax in Germany.

However, the child's place of residence affects the amount of the allowance: depending on the country, the allowance may be reduced by one, two or three quarters. The Federal Ministry of Finance classifies countries into groups to take into account the cost of living. This country grouping affects the child allowance, the BEA allowance, the training allowance and childcare costs.

Short-term stays abroad, such as holidays, do not lead to a reduction in the allowance, nor do temporary stays for training purposes.

For children living in the EU or EEA, there is still an entitlement to child benefit, provided that no comparable benefits are received abroad. Outside the EU and EEA, child benefit is only possible if the child retains a residence or stay in Germany.

The Federal Fiscal Court has ruled that a child who lives outside the EU or EEA for more than a year only retains their residence in Germany if:

• They have permanently suitable rooms available at their parents' home,
• They can use them at any time, and
• They regularly use the home during non-term times (holidays) (BFH ruling of 28.4.2022, III R 12/20).

 
For the retention of a residence in Germany during multi-year stays abroad, short visits to the parents are generally not sufficient. Financial difficulties of the child for home visits cannot compensate for missing stays in Germany during the holidays (BFH ruling of 25.9.2014, III R 10/14). The decisive factor is whether the child regularly spends the holidays at home with the parents. To prove this, parents and child should keep evidence (including train or flight tickets, passport copies and study plans).

 

The Federal Fiscal Court has ruled that a child does not give up their residence at the parents' home if a study abroad (e.g. in Australia or the USA) is initially planned for only one year. The entitlement to child benefit remains in this case.

In the case of a multi-year stay abroad, the child only retains their residence in Germany if they spend the majority of the non-term time in Germany (BFH ruling of 21.6.2023, III R 11/21).

If the child decides during the first year to stay abroad longer, the stricter criteria apply only from the time of the extension. Child benefit remains for the first year, even if the child does not return to Germany during this time.

The decisive factor is whether the child spends more than half of the free time in Germany after the extension. Missing home visits due to lack of money or travel restrictions can jeopardise the entitlement to child benefit, as the Bremen Finance Court emphasised (ruling of 7.3.2023, 2 K 27/21).

 

Note: For the sake of good order, it should be noted that there are special features regarding child benefit in connection with countries with which a social security agreement exists (e.g. Turkey).