Employee Benefits in Germany During the Coronavirus

There is a new law regulating parental allowance to support employees in essential service occupations/affected by short-term work. Parental allowance is generally paid for 12 months (14 if both parents take at least 2 months) after the child’s birth. The amount is based on the average income in the 12 calendar months before the child’s birth. The regulation is intended to prevent the reduction of the parental allowance or having to pay back part of the allowance if employees have to work more or less than planned due to the crisis.

• Parents in system relevant occupations and who have to work full time because of the crisis can postpone the parental allowance until after the child’s 14th month but not later than June 30, 2021, and without reducing the parental allowance for another child.
• Parental allowance is not diminished by income replacement benefits granted to parents due to the COVID-19 pandemic (e.g., short-time allowance or unemployment benefit I) are not considered in the calculation of the parental allowance.
• Parents on the partnership bonus variant of the parental allowance should not lose their entitlement if they work more or less due to the crisis. Currently, in order to qualify for the partnership bonus, a partner must work at least 25 but no more than 30 hours a week.
• If agreed to by parliament, changes will apply retrospectively from March 1, 2020.