Care costs: Do children have to pay for the care of their parents?

When strength wanes with age or age-related illnesses such as dementia no longer allow independent living, a care place must be found – either with an outpatient care service or in a residential care home.

But the cost of care can quickly run into the thousands each month. According to a study by the Association of Substitute Health Insurance Funds (vdek), the personal contribution of a person in inpatient care in July 2022 was an average of 2,248 euros per month. Even those who have saved a lot in life or receive a substantial pension quickly find themselves in the situation of not being able to cover these costs themselves in the long term. In such a case, do the children have to pay for parental support? An overview.

What costs does a person in need of care have to cover themselves?

Basically, anyone who needs care must first pay for it themselves, explains Silke Lachenmaier, a consultant in the Health and Care Department of the Rhineland-Palatinate Consumer Advice Center. “Before you look at the children, it is important to check what resources the parents have to spend themselves,” explains Lachenmaier in an interview with the star.

Although some costs can be covered by statutory nursing care insurance, in most cases the monthly costs significantly exceed the insurance subsidies. Accordingly, many people in need of care have to pay the outstanding amounts “out of their own pocket”. To do this, monthly income is used first. This is usually pension payments and any additional income, for example from rentals or similar. If these amounts are not sufficient, people in need of care have to cover further costs from their assets.

Do people in need of care have to use all their assets to cover their care costs?

At this point, Lachenmaier clears up a misunderstanding: “It is a misconception that you have to use everything up.” People in need of care are entitled to a so-called protected capital of 5,000 euros. This should not be touched under any circumstances, warns Lachenmaier – not even to advance costs: “If the protected capital is used up, the social welfare provider will not replenish it.”

Apart from the protected assets, however, those in need of care must use all of their assets to pay for care costs. This also includes houses or apartments. If a single person in need of care has to move from their own property to a nursing home and this property is empty, it must be sold, explains Lachenmaier: “This is realizable assets that must also be used to pay for care costs.”

Theoretically, it is also possible to rent out the property, says the consultant from the Rhineland-Palatinate consumer advice center. But this is only permitted if the rental income covers the outstanding care costs in full. With current care costs of between 2,000 and 3,000 euros per month, this is very rarely the case, says Lachenmaier.

Who has to step in when the assets of those in need of care are used up?

A large fortune or property that can be sold and used to pay for care costs is of course not the norm. So who has to pay the costs if the assets of a person in need of care are used up? The basic rule here is: If a person in need of care is unable to pay their care costs, there are two possible parties that can step in: their own children or the social welfare office.

Many children are understandably afraid of having to pay for their parents’ care costs and becoming impoverished themselves. However, this fear is unfounded, explains Lachenmaier: “For children of people in need of care, the situation has eased since 2020 thanks to the Relatives Relief Act. They are only obliged to pay maintenance if their annual gross income is over 100,000 euros.” There are no exceptions to this rule. The children’s assets are also completely irrelevant in such a case, explains Lachenmaier: “Only the income is taken into account. If this is below 100,000 euros, then the assets do not play a role. It could be that you have saved several hundred thousand euros in assets, but your annual gross income is below this threshold. Then you are not obliged to pay maintenance.”

However, the situation is different for children who earn more than 100,000 euros. They are generally obliged to pay maintenance.

How much do higher earners have to pay to care for their parents?

According to Lachenmaier, it is not possible to give a general figure as to how much people with an income of over 100,000 euros have to contribute to the cost of caring for their parents. In such a case, she recommends consulting a lawyer to calculate the actual burden. By law, a child who is obliged to pay maintenance is entitled to a so-called “self-support” of 2,000 euros net for a single person or 3,600 euros net for a married couple. However, this does not mean that everything above this amount will be used to cover the cost of care.

In order to determine the actual burden, the adjusted net income is first calculated – that is, the income after deduction of taxes and social security, contributions to pensions, interest and loan payments, insurance and all other expenses of daily life. All of these items can be stated as “reducing income”. The basic principle here is that parental support must not endanger one’s own livelihood.

Half of the income that remains after deducting all personal expenses and self-support must be spent on the costs of caring for the parents.

But there are special cases here too: If the child’s monthly expenses are so high that parental support cannot be paid despite the high income, it may be examined whether the child’s assets could be used to pay this, says Lachenmaier. “But protected assets must also be taken into account here.”

How is the contribution to care costs divided among several children?

If a person in need of care has several children, the first thing to consider is how many children exceed the income limit of 100,000 euros. Children who are below the limit do not have to pay any maintenance. If a child is above the limit but his or her siblings are not, this child alone is responsible for paying maintenance. If several children are above the limit of 100,000 euros, the maintenance is divided between them.

What counts as “income” anyway?

“Basically everything that is considered income under income tax law,” explains Lachenmaier. This obviously includes salary, income from renting or leasing, as well as income from capital investments such as dividends from share transactions. The investments in shares or funds themselves, on the other hand, count as assets.

Are there loopholes to “save” your own or your parents’ assets?

If the parents’ assets are used up and none of the children earn more than 100,000 euros, the social welfare office will step in to cover further care costs – regardless of how large the children’s assets are at that time. It is therefore logical to think that before the care costs burden the parents’ assets, they should quickly give them away to the children and have the social welfare office cover the costs. But it is not that easy to avoid paying the parents’ own share of the care costs, explains Lachenmaier: “The whole thing has a time component. Of course I can give money away to my children, but these gifts must have been made more than ten years ago in order for the social welfare office not to be able to demand them back.”

This is a civil law claim – to put it simply: all gifts made in the past ten years, especially cash gifts, can be reclaimed by the social welfare office. Exceptions to this are so-called “courtesy gifts”, i.e. smaller gifts for birthdays, for example. The social welfare office has the right to view bank statements from the past ten years, says Lachenmaier.

The situation is similar with real estate. Many parents would have their house or apartment transferred to their children at an early stage and be assured of a lifelong right of residence. But here too, the ten-year deadline must be observed in order to be on the safe side legally. Otherwise, the social welfare office could certainly reclaim the property as an asset or demand compensation to cover the care costs, explains Lachenmaier.

What exceptions are there?

In principle, all children are obliged to pay maintenance if their gross annual income is over 100,000 euros. This also applies if contact between parents and children is broken off early.

However, there are certain situations in which children can be exempted from this payment. These include, for example, long-term addiction on the part of the parent, neglect of the child or cases of violence and/or abuse.

However, the evidence is problematic in this matter, explains Lachenmaier: “A presentation of facts is not sufficient. You have to prove this allegation through written documents, certificates or witnesses.” This is precisely what makes it difficult in many cases to prove neglect or violence in the parental home.

In the case of adopted children, the social parents take the place of the biological parents. Accordingly, the child must pay maintenance for the adoptive parents, if at all, but not for his biological parents.