Social Policy News

German Government Boosts Child Allowance and Stimulates Economy with Tax Cuts

Germany's governing coalition has reached an agreement on a new basic child benefit allowance, which will bundle together existing benefits and improve access through digitalization and automation. The initial cost is estimated to be around 2.4 billion euros from 2025, with the cost expected to reach around 6 billion euros in 2028. The compromise clears the way for a corporate tax relief program and is seen as the last major social reform fitting into the government's budgetary framework. The draft law for the basic child allowance will be submitted for consultation before being approved by the cabinet.