Investment Strategy: Maximize Income & Parental Benefits: A Guide for Earners Earning Above 175,000 Euros
- by R. Haxxen
- 6 Min
Unveiled methods to secure parental benefits despite earning over 175,000 euros in income! - High earners eligible for parental allowance, even with income exceeding 175,000 euros.
Are you among the increasing number of professionals wondering, "Will my income surpass 175,000 euros?" If so, you might be intrigued to know that acquiring parental leave benefits in Germany is still achievable, even with such a high income.
- Parental Benefits
- Gross Income
- Tax Implications
Tax consultant Kim Knopf from the firm "TaxItSmart" in Bad Schönborn has observed this trend recently.
Qualifying for Parental Benefits with High Income
In Germany, the parental benefit, or Elterngeld, is a financial support program designed to assist parents during their child's infancy. It is generally accessible to all parents provided they meet specific requirements.
Eligibility Requirements:- Professional Status: Parents must maintain legal employment status or demonstrate previous employment before commencing parental leave.- Income Reduction: The benefit serves to compensate for the income loss resulting from reduced hours or cessation of employment to attend to the child's needs.- Application Submission: The application should be filed following the child's birth, ideally within the first three months[4].
Although the parental benefit is limited to 1,800 euros per month, high-income earners can still qualify for the benefit. The amount distributed is approximately 65% to 67% of the parent's net income before the child's arrival, capped at 1,800 euros[1][2]. Therefore, even if one's income surpasses 175,000 euros, they would still be eligible for the maximum allowance of 1,800 euros per month, given that they meet the criteria for parental leave and eligibility requirements.
Additional Factors to Consider
- Parental Benefit Plus (Elterngeld Plus): Parents have the option to receive a reduced amount of benefits for a more extended period if they opt for part-time employment during their leave[3].
- Shared Parental Leave: Both parents can share the leave and benefits, with the distribution split over the child's first three years[2].
In essence, although a high income might not grant the full potential amount of parental benefits, the system is designed to provide financial support to parents during their child's initial years.
- High-income earners can still qualify for the German parental benefit, known as Elterngeld, as the amount distributed is approximately 65% to 67% of the parent's net income before the child's arrival, capped at 1,800 euros per month.
- The Elterngeld Plus (Elterngeld Plus) option allows parents to receive a reduced amount of benefits for a more extended period if they opt for part-time employment during their leave.
