Germany tightens parental leave rules to cut 500 million costs

Families in Germany face tighter rules and modest increases under a draft plan to overhaul parental leave benefits, as the government seeks to save €500 million a year while pushing fathers to take a bigger role in early childcare.
Families Minister Karin Prien (CDU) proposes cutting the maximum duration of *Elterngeld* from 14 to 12 months, but only if both parents take at least three months each of leave. The draft, confirmed by ministry spokeswoman to dpa and Politico on 7 July 2026, is still in inter-ministerial clearance and must clear cabinet before parliament acts. The plan also raises the minimum monthly payment from €300 to €330 and the maximum from €1,800 to €1,900—adjustments not seen in nearly two decades.
Under the proposal, three months of leave are reserved for each parent, with six further months to be split flexibly between them. Single parents may still claim the full 12 months. The income cap remains unchanged at €175,000 for births from 1 April 2025. The government budgeted €7.5 billion for *Elterngeld* in 2026, down from €7.6 billion in 2022 as birth rates decline.
Prien’s move reflects a coalition agreement between the Union and SPD in 2025 to “develop *Elterngeld* further by creating stronger incentives for shared parenting, especially more father-only leave.” The minister has repeatedly stressed that the income threshold would not be touched, but hinted at shorter payment periods and higher minimum and maximum payments to balance savings.
The changes come as part of broader austerity measures. Prien must cut €500 million from her 2027 budget, and the government is also tightening rules on sick leave and unemployment insurance to curb rising long-term costs. Health insurers report that long-term illness is now the single largest driver of expenditure, with mental health conditions among the most common causes.
Critics argue the reform risks penalising mothers who already take longer leave. In 2025, 1.61 million people received *Elterngeld*, including 1.19 million women and 417,000 men, with men accounting for 25.9% of claimants. The number of recipients has fallen by 13.9% since 2021 due to lower birth rates.
The draft is expected to face scrutiny in cabinet and parliament, with final details still subject to negotiation. If adopted, it would mark the first major reform of *Elterngeld* since its introduction in 2007, aimed at improving work-life balance while addressing fiscal pressures.
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