Family law: New decisions on the calculation of parental allowance

Federal Social Court, 17/02/2011, - B 10 EG 17/09 R, B 10 EG 20/09 R, B 10 EG 21/09 R -

On 29 September 2006, the German Bundestag passed the Parental Allowance and Parental Leave Act (Bundeselterngeld und Elternzeitgesetz - BEEG). As a result, the previous parental allowance was replaced by parental allowance on 1 January 2007.

This means that all parents whose children are born after 1 January 2007 will receive parental allowance. Parental allowance is still available for children born before 1 January 2007.

A parent who lives with the child in the household and has no or no full-time job is entitled to parental allowance

According to § 1 BEEG, anyone who is resident or ordinarily resident in Germany, lives in a household with their child, looks after and raises this child themselves and is not in gainful employment or is not in full-time employment is entitled to parental allowance.

According to § 2 Para. 1 BEEG, the amount of parental allowance is 67% of the previous income.

In accordance with § 2 Para. 1 BEEG, parental allowance is calculated at 67 per cent of the average monthly income from employment earned in the twelve calendar months prior to the month of the child's birth.

According to the BEEG, parental allowance is also paid in an amount of at least 300 and a maximum of 1,800 euros per month for full months in which the entitled person does not earn any income from gainful employment.

Four types of income apply as the basis for calculation (Section 2 (1) sentence 1 no. 4 EStG)

Pursuant to Section 2 (1) sentence 1 nos. 1 to 4 of the Income Tax Act, income from gainful employment is the sum of the positive taxable income in Germany.

• • • Income from agriculture and forestry
    • Income from commercial operations
    • Income from self-employment
    • Income from employment

to be taken into account.

In the above-mentioned decisions, the Federal Social Court had to deal with the following questions regarding the calculation of parental allowance:

Is strike pay to be taken into account as income when calculating parental allowance when determining the relevant average income in the twelve calendar months prior to the month in which the child is born?

Is sick pay paid for a non-pregnancy-related illness to be taken into account as income when calculating parental allowance when determining the relevant average income in the twelve calendar months prior to the month of the child's birth?

Is unemployment benefit I to be taken into account as income when calculating the relevant average income in the twelve calendar months prior to the month in which the child is born?

In all three questions, the BSG ruled that the aforementioned payments are not to be regarded as income from gainful employment within the meaning of the provisions of the Federal Parental Allowance and Parental Leave Act.

In this respect, calendar months in which the entitled person received the aforementioned payments instead of remuneration cannot be taken into account when determining the twelve calendar months prior to the birth of the child that are relevant for determining income, so that remuneration from calendar months further back must be taken into account.

In the opinion of the BSG, these provisions of the BEEG are also compatible with the Basic Law, so that the legislator, within the scope of its freedom of design, was only allowed to link them to the income actually earned during the assessment period and thus waive compensation for loss of earnings due to strike, illness or unemployment.

Source: Federal Social Court

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