Traffic light parties for basic child security: play dough for the kids

The traffic light coalition wants to support poor families better – and argues. What is the family minister planning? How much does it cost? And is it the big hit?

Money for shopping: Needy families should get more Photo: Christof SCHuerpf/Keystone/laif

What’s the idea?

The basic child security is intended to bundle existing social benefits. This includes child benefit and child allowance, child supplement, benefits under the Social Security Code and parts of the education and participation package. So far, the benefits have had to be applied for at very different places. In the future, families should also be informed to what extent they are entitled to benefits: the entitlement should be checked regularly using tax data. Special support still has to be applied for, but the procedure should be simplified and the application can be made centrally digitally: via the so-called child protection portal.

Who gets how much money?

In principle, there should be an amount for the basic child security that all parents receive: the “guaranteed amount”. This should initially correspond to the amount of today’s child benefit, i.e. 250 euros. In addition, there should be an “additional amount” that should benefit poor families. Taken together, the guaranteed amount and the additional amount should secure the subsistence level of the child. Paus also wants to redefine the subsistence level itself; it was last calculated in 2013. The needs of children were derived from the subsistence level of adults, which ignores the costs of diapers, for example.

It is not yet clear how much the additional amount will be and who will benefit from it. Family Minister Lisa Paus (Greens) wants to spend more money to relieve poor families in particular, Finance Minister Christian Lindner (FDP) just wants to bundle the existing offers. However, because it is likely that more parents than before will call on the services, there will definitely be additional government spending.

Where do the billions that the family minister estimates for basic child security come from?

The Ministry of Family Affairs has calculated that the planned basic child security will cost 12 billion euros. The German Trade Union Confederation also expects annual additional expenditure of 12.5 billion euros. So the Minister of Finance does not want to relax much. In the coalition’s budget dispute, however, Lisa Paus insists on her financial ideas. “Twelve billion euros are at the lower end of what would be needed to significantly reduce child poverty in Germany,” she said New Osnabrück newspaper from Saturday. A large part of the money is already needed “for inflation adjustment and higher utilization”.

The Greens are calling for counter-financing Abolition of climate-damaging subsidies. Meanwhile, associations are bringing financing into play through the abolition of spouse splitting: as early as 2001, the German Institute for Economic Research (DIW) confirmed in a report that basic child security could be financed by reducing spouse splitting. The then Minister for Family Affairs, Christine Bergmann (SPD), opposed the Green Party’s proposal, and today the SPD is also in favor of basic child security. According to his government spokesman, Chancellor Olaf Scholz is a “big fan of basic child security”. However, in today’s coalition with the SPD and the FDP, the Greens are no longer calling for the abolition of spouse splitting, they are on a losing battle.

what is the schedule

According to Minister Paus, the Federal Employment Agency is “in the starting blocks” for a feasibility study. A draft law should be ready by the end of the summer break. The first funds are expected to be paid out in 2025. For the 2024 budget, the Federal Ministry for Family Affairs still needs money to initiate the process.

Do parents spend the money on alcohol and cigarettes?

Markus Herbrand, financial policy spokesman for the FDP, claimed that in a guest post in the business week. The family ministry, in turn, argues with one Study by the Bertelsmann Foundation from 2018, according to which there is no connection between poverty and alcohol or cigarette consumption. “Most poverty-prone parents save on everything but their children,” said Sabina Schutter from SOS Children’s Villages in the taz.

Wouldn’t it be better to invest the money directly in education?

In any case, Finance Minister Lindner does not want the money to go to the families themselves, but rather to invest in education: “Child poverty has increased primarily as a result of immigration. So let’s take the example of a family where the parents don’t have a job and don’t speak German. Do we just send them more money then? Or are we investing in language support for parents and children?” The CDU argues similarly: “We want children to get what they need: a needs-based children’s infrastructure with high-quality support in day care centers and primary schools, good health care and a wide range of options Recreational opportunities for children and young people,” says the spokeswoman for family policy for the CDU, Silvia Breher. In a paper, the alliance for basic child security calls this argument a “sham fight between money and education”.

The Federal Ministry for Family Affairs takes the view that the basic child security would improve work incentives. The study by the Bertelsmann Foundation mentioned above shows that financial security increases parents’ participation in education as well as their motivation to work. For the Greens, the Ifo Institute in Munich already calculated different variants of basic child security in 2021: As a result, it was able to reduce the proportion of people at risk of poverty by 1.4 to 3.5 percentage points.

For whom will basic child security be worthwhile?

At the moment, high and top earners in particular benefit from the child allowance of up to 354 euros per month, which would no longer apply with the current status of basic child security. In principle, basic child security would pay off directly, especially for poor families. According to the Parity Welfare Association, 21.3 percent of all children are currently living in poverty. Families with single parents are particularly affected. If basic child security actually lifts families out of poverty, society as a whole would benefit indirectly because it can enable everyone to participate in society.

Is this the big hit now?

The plans of family minister Lisa Paus are considered too expensive within the coalition, but they do not go far enough for many associations and the Left Party. The left recently said goodbye a concept for basic child security that would cost 26 billion euros.

The alliance for basic child security proposes securing all children with a basic child security of 354 to 746 euros per month, graduated according to the parents’ income. For children with disabilities who are cared for by their parents, basic child security should be paid beyond the age of 25. That would be 32 billion euros in additional costs. Miriam Hoheisel from the Association of Single Mothers and Fathers, which is part of the Child Protection Alliance, says: “12 billion are already on the lower edge.” One should not orientate oneself to the small subsistence level of children, but realistically depict what a child actually needs. “Basic child security is an investment in the future of children and thus also in the future of our society,” she says.