Understanding Child and Family Allowances
PeopleSoft Human Resources Manage German Public Sector enables you to capture and manage data of employees’ dependents and family, as well as to process child and family allowances to which employees are entitled.
The paying of all allowances is based on data in your HCM database and is done by the external PAISY ADP Payroll system when your HCM system is up and processing payroll.
Manage German Public Sector supports a number of child and family allowances:
Child allowance (Kindergeld)
Child-related Orts- and Sozialzuschlag (Kinderbezogener Orts- und Sozialzuschlag)
Family allowance (Familienzuschlag)
To help defray costs of raising children, the German Government distributes child allowance to all German taxpayers with children who are qualified for the payments. These allowances are paid out to employees (parents of eligible children).
A German taxpayer can apply for child allowance if he or she has one or more:
Biological child
Adopted child
Step child
Grand child
Foster child (without care relationship with own parents)
Any of the children listed in the application must live in the same household as the applicant. Normally a child can begin receiving child allowances at birth until the age of 18. In some cases, the allowance payout period can be extended:
Typical child — From birth to 18 years of age
Child engaged in education (for example, higher education or apprenticeship) — From birth to 25 years of age
Child with disability — unlimited child allowance
Note: Children with an income that exceeds the annual income ceiling through trust funds, employment, or monetary support from outside Germany are not eligible for child allowance.
The monthly allowance amount that each eligible child can collect is determined by the child's number (number 1 for the first child, 2 for the second, and so on). Each child receives a different amount as determined by legislation and the amounts can be defined in the Child Allowance Type page.
The system provides the Child Allowance Administration page where clerks can view and make changes to employees' child allowance data and eligibility. It displays personal profile data of employee's children that comes from the Dependent Information component and using the page, clerks can manage data that pertains to the child allowance program, for example, updating allowance amounts, adding new children to the program, changing children's eligibility to the program, and so on.
The salary in the old tariff contracts is based on grade, grade step and an allowance, which is similar to family allowance that is available to civil servants. This allowance is called Ortszuschlag (regional) for white collar workers and Sozialzuschlag (social) for blue collar workers.
Workers who were previously employed in the old German Tariff for Public Service BAT and had child allowance during the time of employment are entitled to child-related Orts- und Sozialzuschlag.
Workers meeting these conditions are entitled to child-related Orts- und Sozialzuschlag:
Had employment during the transition time period (TV-L/MTArb = October 2006, TVöD/BMTG = September 2005) with Orts- or Sozialzuschlag claim
Claimed child allowance in October 2006 or September 2005
Had children with a date of birth until the end of 2005 or 2006
The child part of Orts- or Sozialzuschlag is a dynamic acquis allowance (dynamische Besitzstandzulage), which means that the allowance changes with tariff rate increase.
Married civil servants working in the German public sector are entitled to family allowance. The amount of family allowance that a married civil servant household collects is based on two factors:
Employment status of spouse
If the spouse is also a civil servant, then each of them can claim half of the full family allowance amount when one of these conditions is met:
Both individuals work full time
One works full time and the other works part time
Both individuals work part time, one works under 50% of the regular FTE and the other works over 50% of the regular FTE, with a total FTE of at least 1.
If the combined FTE is less than 1, each individual can claim a portion of the half family allowance amount based on the FTE. Suppose that the full family allowance amount is 1000 euros, and the FTEs of both civil servants in the household are 0.75 and 0.2 respectively. The total amount they collect is:
500 x 0.75 + 500 x 0.2 = 475 euros
If the spouse is not a civil servant, the employee (civil servant) has claim to the full amount of the family allowance based on his or her FTE.
Child specific family allowance
It is also known as the child related part of family allowance. Besides marriage-based family allowance, the German Government also provides child-based family allowance to civil servants with children. If a civil servant is entitled to child allowance (EStG and BKGG), he or she is also automatically eligible for collecting the child related part of family allowance.
For civil servants in grades A1 through A5, they are entitled to a larger child related family allowance amount. The same numbering of children used for child allowance also applies to the child related family allowance. The FTE percentage of civil servant is not taken into consideration for this type of family allowance.
German Public Sector provides the ability to send notifications to child allowance administration personnel when changes are made in HR tables to employees' child allowance data, so they can take actions accordingly. Notifications are set up using the Events and Notifications Framework and will be sent to child allowance administration personnel (grouped in role) when any of these events takes place:
A new child is added to an employee's personal record as dependent and the employee is currently a child allowance recipient.
A child is removed from an employee's personal record as dependent and the employee is currently a child allowance recipient.
The personal profile of an employee's child is updated, and the employee is currently a child allowance recipient.
The system uses the GPS_ADMINISTRATOR user list to map users to the Child Allowance Administrator role (GPS Administrator), and the HR_GPS_ALLOWANCES template to establish common formats (text) to set up the notifications. Users can view these notifications from their worklists.
The system provides an application engine (AE) program that generates notifications to GPS administrators when GPS dependents in the database reach the age of 18 or 25. Administrators can review the data ahead of time and take appropriate action to assign allowances.
See Also