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Making parental allowance ‘crisis-proof’: a new proposal from Germany

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Kliemt.HR Lawyers, the first port of call in employment law for top-class and future-proof advice.
A bill currently before the German parliament would ensure prospective parents do not lose out on parental allowance payments as a result of the coronavirus crisis.  

Parents have taken on many roles in the ‘Corona era’: home school teachers, kindergarten carers, stressed-out employees in their home offices or working on the frontline in key professions. But should they also bear a double financial burden in this exceptional situation? A new Government bill has made it clear they should not.

Parental allowance before the new ‘Corona regulation’

So far, parental allowance has been paid at 67% of income with some variations for those entitled to it with low or high incomes.

The relevant income is deemed to be the average income earned in the last twelve calendar months before the birth of the child. The income actually earned during this period is taken into account, even if the income was (partially) reduced during these twelve months, for example due to short-time work. This in turn means that the reduction in pay due to short-time work has two effects for expectant parents: on the one hand, their pay is reduced at the time of short-time work, and on the other hand, future parental benefits are also based on this lower income – short-time work benefits are not taken into account. This meant expectant parents were doubly penalised.

Parental allowance is paid for a period of twelve months, and if both parents take parental leave for at least two months, for 14 months after the birth of the child. The period and the amount of parental allowance can be adjusted if the parents decide to use the Parental Allowance PLUS. Through the so-called ‘partnership bonus’, each parent can receive an additional four months of Parental Allowance PLUS if both parents work no less than 25 and no more than 30 hours a week during this period.

What is in the new Corona parental allowance regulation?

During the corona-crisis, many organisations have resorted to short-time work, expectant parents can take a double financial hit, as shown above. In addition, many parents cannot take their planned parental leave because they are urgently needed in key professions (such as healthcare). A bill to remedy this came before the lower house of the German Parliament (Bundestag) on 22 April 2020.

Under it, it should be possible to postpone parental allowance months on application if the parent is required to stay in full-time work in a key profession due to the crisis. This means it should be possible to claim parental allowance after the child’s 14th month of life, once the crisis has ended. However, this must be done by 30 June 2021 at the latest.

The parental allowance is not reduced by income replacement benefits that parents receive as a result of the Covid-19 pandemic (e.g. short-time work benefits).

Furthermore, expectant parents can (in contrast to the current legal situation) exclude the months during which they were on short-time work due to corona (and therefore received reduced remuneration) from the assessment period for future parental benefits. This is designed to prevent the double hit during the pandemic described above.

In addition and contrary to the previous requirements, the partnership bonus will now not be waived if a partner has to work less or more than 25-30 hours a week because of the corona crisis.


The amendment was passed by the lower house of the German Parliament on 7 May 2020. If the upper house (Bundesrat) approves, the law will take effect retroactively from 1 March 2020 to 31 December 2020. According to the draft law, no additional burden for parents or employers will be justified; the intent is to prevent parents from incurring the financial penalty they would otherwise incur. Employers would not incur any direct additional costs.


Special times require special measures: this draft law justifies the special regulations it introduces with the words ‘the situation created by the COVID 19 pandemic (…) is unique in the history of the Federal Republic of Germany’. Against this background, it is not surprising that the current exceptional situation is now also being taken into account in the area of parental benefits.

This article was prepared with the assistance of Jessica Templi, a trainee at KLIEMT Arbeitsgerecht, Munich.