Germany 2017: the new changes worth knowing

The minimum wage and social benefits will increase, the tax-free income will grow, and we are getting another public holiday – welcome the New Year's updates!

First advertised in Spitz Magazine

As an election year, 2017 will probably a raging year full of uncertainty in Germany. Alongside we have gathered the changes and updates, which are already known to us.

An increase in the minimum wage
The minimum wage is a rather new thing in Germany: the minimum wage law came into effect in January 2015. The law determines an hourly minimum wage of 8.50 EUR. Starting 01.01.2017 the minimum wage will increase in 34 cents, so that the new hourly minimum wage will be 8.84 EUR. The reason for that is that the minimum wage law determines an adjustment of the minimum wage to the costs of living in Germany every two years.

Increase in Children Allowance
The children allowance ("Kindergeld") will increase in two EUR per month starting 01.01.2017: the monthly children allowance for the first and second kid, which was 190 EUR until now, will increase to 192 EUR, the allowance for the third kid, which was 196 EUR until now, will increase to 198 EUR, and the allowances for each additional kid will be 223 EUR per month instead of 221 EUR per month. Payment dates depend on your "Kindergeld" number, and can be seen here.

Deadline extension for filing your taxes
Until now one had to file their taxes until May 31st of the following tax year (in case one filed their own taxes and didn’t hire a tax professional). Starting 2017 the deadline will be extended to July 31st, so that the deadline for filing ones taxes for 2017 will be July 31st 2018. Nonetheless, taxes for 2016 should still be filed until May 31st 2017. When the change will come into effect, the tax authorities will start giving fines for delays in filing. If you are working with a tax professional ("Steuerberater"), you could file your taxes until December 31st of the following year. This deadline will be extended to the end of February of the next year. For example, if you hire a tax professional, you could file your taxes for 2017 until February 28th 2019.

Increase in the tax-free income
In 2016 he income-tax-free income was 8,652 EUR for a one person's household and 17,304 EUR for a married couple, who file their taxes together. In 2017 the yearly tax-free income will increase to 8,822 EUR for a single person and 17,644 EUR for a married couple who files together. An additional increase should be valid in 2018, when the yearly tax-free income will be 9,022 EUR for a single person and 18,044 EUR for a married couple.

An increase in the prices of public health care
The public health care is combined from two parts: health care and nursing care insurance. In 2017 the prices of the nursing care insurance will raise in 0.2% from your income, so that you will pay a total of 2.55% from your income. People above 23 who do not have children will experience a bigger increase of 0.45% from their income, so that they will pay a total of 2.8% from their income for nursing care insurance.

Increase in Children alimony paid by the parents in cases of break up and divorce
Children's alimony in case of break up and divorce is set by the court and depends on the income of the parent who is obligated in alimony (usually this is the parent who does not have custody on the children). In 2017 the minimum alimony will increase, so that children up to the age of six will be eligible for the alimony of 243 EUR per month instead of 335 EUR; children between the ages 6 and 12 will be eligible for the alimony of 292 EUR instead of 384 EUR; and children between the ages 13 and 18 will be eligible for alimony of 460 EUR instead of 450 EUR. Children in the age group 18-25 who study and do not live with their parents will be eligible for the monthly alimony of 735 EUR instead of 670 EUR.

Increase in social welfare
Social welfare in Germany, which is given by the governmental office called "Jobcenter", include rent and benefits for the costs of living. The latter increases a bit every year, in order to adjust to the changing living costs in Germany. In 2017 the monthly welfare for a one-persons-household will raise from 404 EUR to 409 EUR. The monthly welfare given to a household of a few person will raise from 364 EUR to 368 EUR for each adult, from 234 EUR to 237 EUR for children from 18 to 25 who live with their parents, from 306 EUR to 311 EUR for children between the ages 13 and 18, and from 270 EUR to 291 EUR for children between six and 13. The monthly welfare for children up to the age of 6 will not change, and will remain 237 EUR.

An additional public holiday!
Tuesday, October 31st, will be a public holiday this year for the celebration of the 500th anniversary for the protestant reformation. Working places, shops, governmental offices, etc. will be closed, like on Sundays and other public holidays.

Do you have any questions?
please feel free to contact me