In Germany, the state pays a benefit for every child up to the age of 18 — and in some cases up to 25 — which, translated literally, means "child money" (German: Kindergeld). Responsibility for paying child benefit lies with the "family fund" (German: Familienkasse), which is part of the Federal Employment Agency (Bundesagentur für Arbeit). All applications for the benefit are submitted to this fund, where they are also processed.
The basis for applying for child benefit in Germany is simply having a child. The children must be directly related to the applicant, though adopted children also qualify. The main requirement is that the child is being raised by, and lives permanently in Germany with, the person seeking the benefit, and that the cost of supporting the child makes up a substantial share of that person's total expenses. The same rule applies to children living in other member states of the European Union that have joined the Agreement on the European Economic Area. Only one person may receive the benefit for a given child — it cannot be split. Child benefit is paid from the child's first month of life, or from the month in which the child was registered as resident in Germany.
Depending on the number and age of the children, the state pays the following monthly amounts to support them. Since January 1, 2017, the first and second child each receive 192 euros a month. For a third child, the amount is 198 euros. For a fourth child and each further child, the amount is 223 euros a month. From January 1 of the following year, child benefit is set to rise by a further two euros a month. Where the first (oldest) child stops receiving the benefit due to age, the next-oldest child is thereafter treated as the first child.
Child benefit is paid to absolutely every applicant permanently resident in Germany, and the child's citizenship plays no role whatsoever. Receiving the benefit, however, remains possible only for as long as at least one parent holds a residence permit for the country. Once that residence permit expires, payment of the benefit stops. It is therefore necessary to notify the Familienkasse in good time whenever a residence permit is renewed.
The recipient of the benefit is also subject to certain obligations. Under § 68 of the German Income Tax Act (Einkommensteuergesetz, EStG), the recipient must immediately notify the Familienkasse of any change in the child's status once the child turns 18. This includes cases where: the child finishes or interrupts their education, or changes place of study; the child begins earning their own income; the child begins military service; the child marries or divorces; the child has a child of their own; and so on. Other changed circumstances must also be reported — for example, where the recipient or their spouse goes abroad for work; enters public service; intends to divorce; receives childcare assistance from abroad; where the other spouse has also applied for child benefit; where the child changes residence or moves abroad, or where the child has died or gone missing; and so on. Violating these rules can be classified as an administrative offense or even a criminal one. If these obligations are not met, the benefit recipient must not only repay the state any amounts unlawfully received during that period, but must also pay a substantial fine. In some cases, criminal proceedings may even follow, with penalties up to and including imprisonment on charges of tax evasion.
Important: Calculating Support
Under § 68 of the German Income Tax Act (EStG), the recipient must immediately notify the Familienkasse of any change in the child's status once the child turns 18.
A young man, Gennadi (name changed), had not long before relocated to Germany with his family after receiving a temporary residence permit issued for the purpose of employment (§ 18 of the German Residence Act, Aufenthaltsgesetz, AufenthG). Since the young couple had several children, they naturally began thinking about applying for child benefit and started gathering the necessary documents. Once the documents were ready, Gennadi filed an application with the Familienkasse. The family fund, however, refused to grant the benefit. In support of its decision, the fund relied on the provisions of § 62 of the German Income Tax Act (EStG).
Under § 62(2) EStG, a foreigner has the right to child benefit only if they hold a permanent settlement permit (German: Niederlassungserlaubnis) or a temporary residence permit that entitles them to work.
Section 62 EStG, however, also sets out certain exceptions to these rules. Under § 62(2) no. 2 EStG, as an exception, persons who hold residence permits issued under § 16 or § 17, § 18(2), § 23(1), or §§ 23a, 24, or 25(3)–(5) of the German Residence Act (AufenthG) have no right to child benefit, despite the right to work granted to them. This group includes:
1) persons holding a temporary residence permit under § 16 AufenthG for the purpose of university study, language courses, or school attendance;
2) persons holding a temporary residence permit under § 17 AufenthG for the purpose of in-company training or vocational retraining lasting up to 6 months;
3) persons holding a temporary residence permit under § 18(2) AufenthG as a seasonal, posted, or transferred worker ("als entsandter bzw. versetzter Arbeitnehmer") within a specific company (intra-company), for instance at a branch or representative office of that company located abroad.
4) persons holding a temporary residence permit under § 23(1) AufenthG on account of armed conflict in their home country, or under §§ 23a, 24, or 25(3)–(5) AufenthG.
At the same time, under Directive 2011/98/EU of the European Parliament and of the Council of 13 December 2011 on a single application procedure for a single permit for third-country nationals to reside and work in the territory of a Member State and on a common set of rights for third-country workers legally residing in a Member State, the following persons are entitled to claim child benefit:
1) persons holding a temporary residence permit under § 17 AufenthG for the purpose of in-company training or vocational retraining lasting more than 6 months;
2) persons holding a temporary residence permit under § 18(2) AufenthG for the purpose of employment, working as a foreign-language teacher or cook, a domestic worker, a performer, and in a number of other occupations.
In its refusal, however, the Familienkasse interpreted § 62(2) no. 2 EStG in its own way. Alongside persons holding a temporary residence permit under § 18(2) AufenthG, who, under the express wording of the law, have no right to the benefit, it also placed persons who had obtained a residence permit under § 18(3) and (4) AufenthG. Applying this interpretation of the law, the Familienkasse stated in its refusal that our client Gennadi fell within the exceptions listed in § 62(2) no. 2 EStG, and that the prerequisites for receiving the benefit under § 62 EStG were therefore absent in his case.
At first glance, all of this sounds fairly logical, and someone unfamiliar with German law might well have accepted the situation, taken the Familienkasse at its word, and abandoned any thought of claiming child benefit. An experienced lawyer, however, immediately spots the catch here, and the superficial way the officials had handled the case.
So, after reviewing the materials of Gennadi's case and explaining the whole situation to him, we got to work right away. Having researched and carefully studied the case law on resolving similar disputes, we became convinced we were right. There were numerous court rulings in comparable cases that had been decided in favor of foreigners.
Confident in a positive outcome, we filed a claim challenging the Familienkasse's decision, representing the Federal Employment Agency, with the Finance Court (German: Finanzgericht). In the claim, we made the following arguments. Our client had indeed been issued a temporary residence permit under § 18 AufenthG, and could not yet apply for a permanent settlement permit, since insufficient time had passed. Nevertheless, the German Income Tax Act (Einkommensteuergesetz) does not prohibit persons holding a temporary residence permit for the purpose of employment from claiming child benefit. Moreover, § 62(2) no. 2 EStG contains no express provision stating that foreigners holding a permit under § 18(4) are, as an exception, barred from the benefit. The Familienkasse's reliance on treating § 18(4) AufenthG as falling squarely within § 18(2) AufenthG was accordingly a disputed question. Our client had, after all, not come to Germany as a seasonal, posted, or transferred worker ("als entsandter bzw. versetzter Arbeitnehmer") assigned by some company from his home country, but on the strength of an ordinary employment contract with a single German company, for the purpose of employment there. For further support, we also cited several precedent decisions we had found, and asked the court to decide the case by analogy with them.
Our efforts and painstaking legal work were rewarded. After reviewing the claim, the court subsequently ruled in Gennadi's favor, found the Familienkasse's refusal unlawful, and ordered the fund to pay Gennadi the monthly child benefit.
This case shows particularly clearly just how much persistence, time, and specialized knowledge are needed to resolve matters of this kind. We therefore recommend that you always seek advice from professionals who can correctly interpret the law, assess your prospects, and choose the best legal strategy for your case.
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