Cracking the Tax Code: How to Still Score Parental Allowance whilst Earning over 175,000 Euros!
- By Nina Ponath
- ~ - 6 Min Read
High Income Earners (175,000+ Euro) Eligible for Parental Leave Benefits! - Wealthyparents continue to receive parental allowance benefits, surpassing the 175,000 euro income threshold.
Tax advisor Kim Knopf from the firm "TaxItSmart" in Bad Schöneborn has noticed an increasing number of parents inquiring about whether their income will exceed 175,000 euros. This concern is due to the change in the Parental Allowance (Elterngeld) eligibility cap, set to take effect on April 1, 2025.
- Parental Allowance
- Taxes
- Income Threshold
- Income Tiers
Tax changes can be tricky, but don't worry – we've got you covered!
As of 2025, the Elterngeld eligibility cap for two parents will be capped at a combined gross family income of 175,000 euros in the year prior to the child's birth or adoption. However, it's crucial to note that individuals earning more than this amount will no longer qualify for Elterngeld, barring any specific exceptions[1][5].
You might wonder, "If I earn more than the threshold, can I still claim Elterngeld?" Unfortunately, there's no official way to sidestep the rules and qualify for the Parental Allowance if your combined gross income exceeds the cap. The calculation of Elterngeld is based on the joint gross income of both parents in the year preceding the child's birth or adoption, not net income alone – but net income determines the actual benefit amount if you are eligible[1][5].
Here are the key points you should know:
- Income Ceiling: The 175,000 euro limit applies to the combined gross income for both parents, not each parent individually[1].
- Net Income's Role: If the joint gross income is within the threshold, net income and further deductions come into play, determining the actual Elterngeld amount, which ranges from 65% to 100% of net income, with a maximum of 1,800 euros per month[5].
- No Magic Loophole: If the combined gross income exceeds 175,000 euros, you will not be eligible for Elterngeld, regardless of your net income or deductions[1].
- Other Benefits: High-earning families might still qualify for benefits such as the child benefit (Kindergeld) or tax reductions, but Elterngeld will not be among them[3][4].
| Family Scenario | Elterngeld Eligibility (2025) ||----------------------------------------|-------------------------------|| Combined gross income ≤ €175,000 | Eligible || Combined gross income > €175,000 | Not Eligible |
Take-Away:If you anticipate joint gross (pre-tax) earnings exceeding 175,000 euros in the year before your child's birth or adoption, you will not be eligible for Parental Allowance (Elterngeld) in Germany after April 1, 2025. It's essential to understand that net income above the threshold does not affect eligibility, as the rule focuses on gross income[1][5]. Navigating tax laws and benefits can be challenging, but don't fret! Reach out to a professional tax advisor who can help you maximize your benefits and ensure you're following the rules. Good luck, parents! 😏💸💪
- It's crucial to understand that the institutional framework of Elterngeld eligibility in Germany, effective from April 1, 2025, caps the combined gross family income at 175,000 euros in the year prior to the child's birth or adoption.
- High-earning families may still benefit from institutional frameworks like child benefit (Kindergeld) or tax reductions, but Elterngeld will not be among them, given the institutional framework set by the income ceiling.
