Parental allowance and additional income

Parental allowance as a state payment replaces about 65% of the prenatal net income. In the case of ElterngeldPlus, it is even only half.

This often enormous financial cut brings so many parents to the limit of what is financially feasible, which is why many parents wonder whether and if so, how much you can earn during parental leave, resp. of the parental allowance can earn extra money.

This article covers this topic in detail and provides valuable tips and tricks on how to best manage the issue of parental allowance and additional income:

Employment and additional income with parental allowance

Income from non-independent work is generally relevant for parental allowance, i.e. those who receive parental allowance and also have income from employment must prove their additional income to the parental allowance office (weekly hours and gross income). Proof is regularly provided in the form of an employer’s certificate.

By the way, it does not matter whether it is a mini, midi or a "regular" job.

Notice:
Only those types of wages count that also increased the parental allowance in the assessment period. Therefore, if you receive other payments such as bonuses or Christmas bonuses while receiving parental allowance, your parental allowance will not be reduced as a result.

Tip:
First, find out your optimal ElterngeldPlus gross amount. Arrange with your employer to pay you the optimum ElterngeldPlus gross amount as a regular taxable benefit. All other benefits are to be paid to you as other/one-time payments. This is how you can receive ElterngeldPlus free of charge. The requirements of the wage tax guidelines for wage type taxation must of course be fulfilled here.

Therefore: Approach your employer.

Self-employment and additional earnings during parental allowance

Self-employed persons, tradesmen and agricultural or forestry workers. Foresters, have enormous design potential during the parental allowance withdrawal. You may work up to 30 hours per week and submit a profit calculation for the specific period in which you receive parental allowance. In particular, if you calculate your earnings according to the principles of § 4 para. 3 Income Tax Act (so-called. Income statement (Einnahmen-uberschuss-Rechnung), you can positively influence your operating result while receiving parental allowance by influencing the inflow of operating income.

Example self-employment and gap in the reference period:

The mother is self-employed and receives basic parental allowance for months 1-6 and 8-13 of life. She works in the life months 1-6 with ca. 10 hours per week, but accounts for their work at the end of month 6 of life. The inflow of income to your business account occurs in the month of life 7 (so-called. gap hours). In the months of life 8-13, she works about 20 hours per week and calculates at the end of the 13th month the number of hours worked. Month of life from. The inflow of income takes place in the month of life 14, i.e. also outside the reference period.

Now she submits profit calculations for the life months 1-6, as well as 8-13, from which a tax loss is recognizable, because the operating expenses exceed the income. This means that you could work part-time, receive your full parental allowance and even make a profit.

Working while receiving parental allowance

Rumors about the possibilities of gainful employment while receiving parental allowance persist. False statements such as "you are not allowed to work during basic parental allowance" or "you must work during parental allowance plus" are heard again and again. Here, the regulations for basic parental allowance and ElterngeldPlus are clear:

1) Maximum 30 hours per week

The 30-hour limit applies to all types of parental allowance, i.e. to both basic parental allowance and parental allowance plus. The weekly hours are to be considered as an average value in the month of life. This makes it possible to work 40 hours in a week without any problems if you work fewer hours elsewhere.

Exception:
By the way, gainful employment during vocational training (apprenticeship, studies, etc.) is exempt from the limit.) and for day carers who do not look after more than five children in day care.

How does the parental allowance office check the working hours for employees??

To check whether the working hours limit is complied with, the parental allowance offices determine the working hours to be taken into account ex officio. The hours actually worked are decisive. Overtime must be taken into account in the same way as possible undertime. On the other hand, periods must be taken into account in which earned income is received without work, in particular vacation days, public holidays, periods of a ban on employment outside the protection periods before or after childbirth and sick days with continued payment of wages.

Periods of time off to care for a sick child must also be taken into account. Here the working time is the contractually agreed working time that is allotted to these times. For a five-day week with 30 hours per week, this would be z.B. 6 hours per vacation day.

In the case of the use of residual leave from full-time work during part-time work, the planned working time applicable during part-time work is to be taken as the basis for each day of leave. Periods of work that are not considered working time under the. Working Hours Act do not count as working time (z.B. Periods of on-call duty are not taken into account as working hours.

If a person does not work more than 30 hours in any week, the permissible weekly working time is complied with. If this is not clear, the parental allowance offices usually use 2 methods to check whether the working hours have been observed:

1. The monthly calculation by calendar days, as it is sufficient if the weekly working time does not exceed 30 hours on average in the month:

Here, all working hours to be taken into account in the reference month (monthly working hours) are added up. The sum thus determined is compared to the permissible working time in the reference month; the permissible working time may not be exceeded:

If there are 28 days in a month, the permissible working time is 120 hours, if there are 29 days, 125 hours, if there are 30 days, 129 hours and if there are 31 days, 133 hours.

2. In the case of a disproportionately large number of working days in a reference month, a monthly calculation according to working days.

If a person in an employment relationship never works on certain days of the week, for example, due to a working time regulation, collective agreement or employment contract (for example, within the framework of a five-day week, never on Saturdays and Sundays), the parental allowance office checks whether the person has not worked more on average on the agreed working days than is permissible on a weekly basis.

If the monthly working time in a reference month exceeds the maximum permissible number of hours calculated on the basis of calendar days, this may be due to the fact that a disproportionately large number of the agreed working days occur (by chance) in the month in question. In such cases, it shall be checked whether the maximum permissible working time has been observed on the average of the working time of the month in question.

The part-time agreement (employer’s certificate) is used to check how many and which days a week are worked. Then, the parent’s average maximum allowable number of hours per workday is determined by dividing the total allowable average number of hours per week (30) by the number of agreed-upon workdays (five in the example). The result is then multiplied by the number of working days in the specific month of life, as specified in the binding part-time agreement.

Example:
In the case of a five-day week, the average maximum number of hours allowed per working day is 6 hours (30 hours per week divided by 5 working days). This is to be multiplied by the number of agreed working days falling in the reference month.

In the case of a five-day week, 22 working days result in a permissible working time of 132 hours, and 23 working days result in 138 hours.

In the case of a three-day week, the average maximum permissible number of hours per working day is 10 hours (30 hours per week divided by 3 working days). This is to be multiplied by the number of agreed working days falling within the reference month.

In the case of a three-day week, the permissible working time is 140 hours for 14 working days and 150 hours for 15 working days.

The duration of the employment and the weekly working hours must be proven by a certificate from the employer.

Conclusion
The working time limit is usually verified by an informal certificate from the employer. Only if there are justified doubts about the actual implementation (for example, higher salary than agreed, indication of longer employment), the parental allowance office requests further evidence of the actual working time (for example, a copy of the hourly account).

Note:
For many occupational groups, there are regulations for the assessment of working hours that deviate from the classical model of working hours or. -extent. Depending on the activity, the calculation is made in compulsory hours, flight hours, maximum load limits or also in stints (case numbers).

The regulations made in individual cases follow the requirements of the respective occupational field and can result from service agreements, collective bargaining agreements, EU law or state regulations, for example.

If it becomes apparent during the examination of the parental allowance application that a special working time regulation could exist, the maximum permissible number of hours is checked by linear conversion. In relation to a full-time working time of 40 hours, 30 hours correspond to an employment volume of 75 %, 25 hours (e.g. in the partnership bonus) a scope of employment of 62.5 percent.

Example:
The father is a teacher with a mandatory number of hours of 27: With a basic compulsory number of hours of 27 per week for teachers, 20.25 compulsory hours of work correspond to 30 hours of work (27 * 0.75). An earned income of 25 hours of work is equivalent to 16.875 hours of.

How does the parental allowance office check the working hours of self-employed persons??

Self-employed persons are also only allowed to work up to 30 hours per week. Work in own household does not count. Applicants must declare that they do not exceed this limit and provide credible evidence to this effect. For this purpose, they must explain the extent of their working hours in the past and what arrangements have been made in the company to compensate for the reduction in their activities (e.g.B. Hiring a replacement, having existing employees take over tasks, reducing the number of orders carried out in favor of childcare, etc.).

Conclusion:
As long as self-employed persons can plausibly prove their working hours, parental allowance offices do not have any problems following the application in the majority of cases. Therefore, a working time account or similar does not have to be kept separately.

2) chargeable income

With regard to the question of which income is taken into account for the parental allowance, a distinction is made firstly according to the type of income (salaried or profit income). Which income is relevant for parental allowance is shown here:

employed (also mini- and midijob)

  • current and lump-sum taxed salary
  • Monthly salary,
  • Weekly and daily wages,
  • Overtime allowances,
  • Supplements and allowances,
  • Non-cash benefits from the permanent provision of company cars for private use,
  • Back payments and advance payments, if these relate exclusively to wage payment periods that end in the calendar year of payment,
  • wages for wage payment periods of the past calendar year, which accrue within the first three weeks of the following calendar year.

Self-employed

  • The taxable profit, i.e. the excess of operating income over operating expenses, is chargeable.
  • current sales revenue
  • sales tax received
  • Income from the sale of fixed assets
  • Non-monetary transfers of value
  • and many more

3) Non-creditable income – Tip

There are possibilities to earn income while receiving parental allowance, which does not reduce the parental allowance. Everybody should at least check whether he has the possibility to make use of this potential.

Basically, the principle applies, what did not increase the parental allowance during the prenatal period, may not reduce it during the reference period either.

Especially salaried employees benefit

Tax-exempt wage components can be drawn in parallel to the parental allowance, just like other/one-time payments, without affecting the parental allowance.

According to the wage tax guidelines, other payments are wages that are not paid as regular wages. Other remuneration includes, in particular, non-recurring wages paid in addition to current wages, e.g. B. :

  • thirteenth and fourteenth monthly salaries,
  • one-time severance payments and compensation,
  • gratuities and bonuses that are not paid on an ongoing basis,
  • Jubilee allowances,
  • Vacation allowances, which are not paid continuously, and compensation for vacation not taken,
  • Allowances for inventions,
  • Christmas benefits,
  • Additional payments and advance payments, if the total amount or a partial amount of the additional payment or advance payment relates to wage payment periods that end in a year other than the year of payment, or if wages for wage payment periods of the past calendar year are received later than three weeks after the end of this year,
  • Compensation payments for advance payments made in the work phase due to a partial retirement relationship in the block model, which is terminated before the end of the agreed period,
  • Payments within a calendar year as quarterly or half-yearly installments.

Tip:
Try to negotiate your options with the employer. In the best case, you agree on a basic salary in the amount of the optimal ElterngeldPlus gross amount and have the remainder paid out in non-eligible wage types (e.g., in the form of a bonus). in the form of bonuses).

Types of income that are not relevant

Income from private asset management (bspw. from renting and leasing or from capital assets) are not taken into account for parental allowance, just as other income (e.g. private sales transactions).

This means that you can receive your rental income, your interest or even your open profit distributions from corporations without offsetting them in parallel with the parental allowance.

Be careful with pensions or other (compensation in lieu of pay) benefits

Although pensions and the like are classified as other income under income tax law (Section 22 of the German Income Tax Act) and are therefore not relevant for parental allowance purposes, caution is advised here.

Since parental allowance is a wage replacement benefit, it cannot be received in parallel with other wage replacement benefits. This is especially true for maternity benefits, accident insurance benefits, etc. In the case of pensions, it is therefore necessary to check exactly what form of pension is involved, i.e. whether or not the pension has the character of a substitute for remuneration.

Additional earnings with basic parental allowance

An additional income during a basic parental allowance is usually not worthwhile, because there is theoretically no imputation-free amount (except for approx. 105€ gross for salaried employees). This means that the value of your additional earnings decreases sharply, making the effort to generate the income generally not worthwhile.

Example of additional earnings for basic parental allowance

The easiest way to illustrate this is with an example:

In the example, the mother’s basic parental allowance is 1.784.15 EUR. She is now considering a 450 EUR job from month 7 onwards. If she continues to receive basic parental allowance during this time, she will "only" receive 1.580.92 EUR per month of life. That is 203.20 EUR less, just because of a 450 EUR job.

The additional income of 450 EUR per month is therefore worth "only" 246.80 EUR.

The mother should consider drawing ElterngeldPlus from month 7 onwards, in which case your parental allowance will also not be reduced. The only disadvantage here is that the parental allowance continues until month 18, but maybe this fits her very well.

Whether additional earnings during basic parental allowance are worthwhile must always be examined on a case-by-case basis. There are also situations in which we recommend the basic parental allowance despite reduction (see for example here: parental allowance and company car).

Additional earnings with ElterngeldPlus

With ElterngeldPlus, the additional earnings are immediately more interesting. This type of payment was created by the legislator in 2015 to make it worthwhile to earn additional income while receiving parental allowance, because until then, regardless of when the additional income was earned, the crediting dynamics were the same as for basic parental allowance.

But beware: ElterngeldPlus also has disadvantages, for example that it delays the receipt of parental allowance much longer (making you "less free" to go back to work full-time or generate income without "worrying") and it is limited to half of the basic parental allowance. Thus it becomes financially "too scarce" for many parents for too long, here the legislator could start by increasing the ElterngeldPlus quite simply (additional earnings bonus o.a.).

Example of additional earnings for ElterngeldPlus

We take the same example as for the basic parental allowance. The 450 EUR job while receiving ElterngeldPlus does not result in a reduction of ElterngeldPlus. The mother can earn the 450 EUR during the months of life 7-18 and still receive the 892.08 EUR ElterngeldPlus (half of the basic parental allowance).

  • already before the age of 12. You (want to) earn additional income for the first month of your life,
  • have a high jointly assessed taxable income or
  • would like to be on parental leave for as long as possible and would like to receive parental allowance each month.

The "optimal" ElterngeldPlus gross amount

Up to a certain amount, you can earn additional income during your ElterngeldPlus period without having to pay a tax credit. However, you cannot do this indefinitely; there is a limit above which the ElterngeldPlus is also reduced.

We call this limit the "optimal ElterngeldPlus gross amount". It is basically the gross additional earnings that can be earned during ElterngeldPlus without the parental allowance changing as a result.

In simple terms, you can earn half of your pre-natal net parental allowance during ElterngeldPlus (in net). However, it is almost impossible to determine this value concretely for yourself in the parental allowance planning and internet research, because the parental allowance additional earnings calculation is very complex.

In our specially developed parental allowance software, we have developed an additional earnings calculator that calculates your "optimal parental allowance plus gross amount" for your situation. And in a matter of seconds.

In our example, the mother can earn up to 1.833 EUR gross additional earnings without reducing your ElterngeldPlus of 892 EUR. However, if she earns 4.If a parent earns an additional EUR 000 per month, their parental allowance is reduced to EUR 150 (minimum amount for ElterngeldPlus):

Our additional earnings calculator is worthwhile for those who are considering earning additional income while receiving parental allowance and for those who would like to apply for the partnership bonus.

Report additional earnings retrospectively

You are not yet sure whether and when you would like to take up part-time employment?

We recommend that you initially apply for the parental allowance without part-time work, because you can notify the parental allowance office of the start of work later without any problems, but you should definitely notify the parental allowance office of this in good time before starting work.

In this case, you should first apply for as many basic parental allowance months as possible. If applicable. convert these later into ElterngeldPlus months (this only works for months of life that are still in the future at the time of the change).

If you know later when you would like to start part-time work, it is best to inform them of the number of hours per week and the expected earnings. As a rule, these must be certified by the employer, or the employer must provide a certificate. must be made credible/projected in the case of self-employed persons.

Reporting part-time work after the fact or not at all is at least a misdemeanor. We do not recommend.

Tips and hints

parental allowance and a parallel additional income can be very complicated in some places. Here we give you a few tips for special cases:

Company car and other non-cash benefits

Monetary benefits are generally taxed as current taxable wages in the salary statement. This means that non-cash benefits must be taken into account to reduce the parental allowance in the reference period.

If you are allowed to continue using your company car while receiving parental allowance, your parental allowance will be reduced proportionally. If the employer is paying for ongoing expenses (gas, repairs, washing, inspection, etc.) pays in full, it can happen that the parental allowance reduction is compensated again in view of these savings.

So check carefully, bspw. with the help of our additional earnings calculator in the parental allowance software, how high the concrete reduction in parental allowance is in this case, so that you can estimate whether the "loss" in parental allowance will be compensated again in view of the continuing employer benefits.

If the difference, e.g. due to a very high gross list price is not in proportion, you should consider applying for ElterngeldPlus or officially hand over the company car for the period of parental leave. The latter is proven by an employer’s certificate.

Photovoltaic system

Income generated because of a photovoltaic system is generally income from commercial operations. Profit (excess of income over operating expenses) reduces parental allowance proportionately.

If possible, try to schedule utility payments so that you receive the income outside of the parental allowance pay period. If you have e.g. receive monthly deductions, this variant is more difficult than if you only receive the statement once a year. If you know the exact date of the annual settlement, you can simply plan a "gap" in the parental allowance in this corresponding month of life and the photovoltaic system would no longer have a parental allowance-reducing effect.

Nevertheless, even in this variant you have income in the reference period without being actively employed yourself. This income and the corresponding profit (would be a loss in this case) must be declared when submitting the application for parental allowance.

Good planning and consultation with the energy supplier, which should take place in good time before the birth, is particularly important here.

Co-entrepreneurs in partnerships (GbR, oHG, KG, etc.)

The special income tax circumstances of partnerships have regularly challenged parental benefit law in the past.

Due to the so called. Transparency principle, the profit is considered to have accrued to the shareholder, which the company has generated in the corresponding period, to his share. As a result, there were parents who were not gainfully employed but nevertheless generated income from gainful employment and were thus often only entitled to the minimum amount of parental allowance.

The parental allowance office therefore applied a lump sum by setting the shareholder’s annual profit share proportionately against the parental allowance entitlement in the reference period. This led to considerable injustice, which is why a tax consultant concerned successfully sued against it before the Federal Social Court in December 2018 (file no: BSG ruling dated 13.12.2018 – B 10 EG 5/17 R).

Accordingly, co-entrepreneurs in partnerships can now reduce their profit share to 0% during the parental allowance reference period (an informal shareholder resolution is sufficient for this), whereby they can receive unreduced parental allowance. The only other requirement is that they do not take withdrawals from the partnership in the reference period.

Tip:
Co-entrepreneurs in partnerships should definitely plan their parental allowance withdrawal in detail before the reference period and discuss it with the co-partners. Otherwise, the regular parental allowance entitlement is severely jeopardized. Get advice.

Shareholder-managing director

Another special feature of parental allowance law is that of managing partners in corporations. In particular, if they have sole proprietorship authority, they face an enormous potential for structuring when it comes to parental allowances.

Our basic recommendation here is probably to set a current gross income at the "optimal ElterngeldPlus gross", and to exhaust the possibilities of miscellaneous/one-time payments as much as possible.

Alternatively, you can also optimize a basic parental allowance very well via on-call duties for the corporation, which are remunerated with premiums on a one-time basis.

Again, seek advice to ensure that you make the best possible claim for your parental allowance.

Minimum amount from the beginning

It happens again and again that parents cannot arrange their additional income in the reference period and inevitably fall to the minimum amount. Insurance agents who receive monthly commissions from their referral orders and retailers with retail stores or online stores that generate daily sales revenue are particularly affected. Often, these individuals have little to no opportunity to generate accounting losses during the reference period. In these cases, in order to save bureaucracy from the outset, you should apply for the minimum amount right away.

Tip:
However, be sure to talk to your tax advisor beforehand to really explore all possibilities. Perhaps it recognizes potential, which you can use.

Notice:
The minimum amount, which is not dependent on earned income, is not a payment in lieu of remuneration, but a social benefit. This means that no proof of income, neither for the assessment period nor for the reference period, needs to be submitted. The only requirements that must be proven here are that

  • you have your residence/habitual residence in Germany
  • you live in the same household as the child while receiving parental allowance
  • you do not work more than 30 hours per week during the reference period, and
  • you in the calendar year before the birth, do not exceed the income limit (500.000€ of taxable income in the case of a couple)

Unfortunately, we have often experienced parental allowance offices that have nevertheless demanded further proof of income. We recommend that you do not comply with these requirements. Also, the "Declarations on income" of the Eltenrgeldantrags are not to be filled out in detail in these cases.

FAQ: Parental allowance and additional earnings

How much can I earn in addition to the parental allowance??

Unfortunately, a general answer is not possible here. There is chargeable and non-chargeable income. In addition, during ElterngeldPlus, you can earn about half of your net prenatal income without having to pay a tax credit.

Is a 450 EUR job counted towards the parental allowance?

Yes, unless you earn only tax-exempt types of wages. During basic parental allowance, a mini-job is hardly worthwhile, but with ElterngeldPlus it is much more worthwhile.

How much can I earn with Elterngeld Plus??

You can earn approximately half of your net prenatal income without any additional credit during ElterngeldPlus, but the calculation is very complex. Please use an additional earnings calculator to calculate your "optimal gross income".

Too complicated? – Our tip

The parental allowance rules can be complicated. Make it easy for yourself and, like many other parents, use our service offers to apply for your parental allowance in the best possible way. We offer you many options to create your parental allowance application as simple and straightforward as possible:

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