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Bundesrat: Approval of parental benefits reform
Parents will receive better support to help them combine their job and family life: More part-time options, additional parental allowance for babies born premature, less bureaucracy: Millions of parents will profit in the future from improved family allowance arrangements. On 12 February 2021, the Bundesrat approved the parental benefits reform which should enter into force on 1 September 2021.
The details of the parental benefits reform:
- Part-time corridor will be expanded, bureaucracy will be reduced
The Act introduces numerous improvements for parents working part-time:
The permissible working time when receiving parental benefits and parental leave will be increased from 30 to 32 hours per week. The partnership bonus, which allows both parents to work part-time at the same time, will be able to be drawn for 24 to 32 hours per week (instead of 25 to 30 hours at it is at present). This expansion of the working-time corridors helps both employees and employers because the ability to work three or four full days facilitates work organisation.
The partnership bonus will also be more flexible and only in exceptional cases will parents be required to later provide documents evidencing their working time. This saves parents, the responsible authority and employers a great deal of bureaucracy.
The amount of parental allowance will remain the same while drawing wage-replacement benefits.
In addition, the reform ensures that the amount of the parental allowance will not change for parents working part-time when they draw income substitution benefits, such as short-time work allowances or sick benefits. Until now, this resulted in a reduction in the amount of parental allowance.
- The special Corona rules on the partnership bonus will be extended
Parents who draw the partnership bonus and cannot work part-time in parallel as planned due to the Corona pandemic do not have to repay the partnership bonus. This makes the parental allowance more resistant to the crisis and supports families. The special Corona rule was introduced on 1 March 2020 and is extended until 31 December 2021.
- Parents of premature babies will receive an additional month of parental allowance
In the future, more consideration will be given to parents of premature babies. If a child is born six weeks before term, the parents will receive an additional month of parental allowance. This was foreseen in the draft bill. What’s new is that where a child is born eight weeks too early, the parents will receive two additional months of parental allowance, three months in the case of 12 weeks premature and an additional four months of parenting allowance can be drawn where the baby is 16 weeks premature. This gives parents the time, peace and security they need in their situation.
- Simplification of administrative procedures and clarifications
Parents and authorities will benefit from simplified procedures and legal clarifications. Parents with a small supplementary income from self-employed activities will be able to apply for the parental allowance, ensuring that their income is better taken into account in the future.
- Income limits for couples will be adjusted
In order to finance the improvements, only those parents who jointly earn EUR 300,000 or less per year will receive the parental allowance in the future. Until now, this limit was set at EUR 500,000 for couples. The new rule for couples affects top earners, who account for 0.4% of all recipients of the parental allowance. These parents can provide for themselves during parenting leave even without the parental allowance. For single parents, this limit remains at EUR 250,000.