Federal Council: Federal Council approves tax relief and Germany ticket

At its last meeting of the year, the Federal Council approved several laws that had only recently been passed by the Bundestag. For example, child benefit can now increase at the beginning of the year. Tax relief for citizens is also coming. This is offset by the burden of an increasing care contribution. The Germany ticket for local transport is financially secure for the coming year.

More child benefit and less taxes

From the beginning of the year, child benefit will increase by five euros to 255 euros per month. According to the Federal Ministry of Finance, this means costs for the state of around 790 million euros. A further child benefit increase of four euros in 2026, which has also been decided, will cost another around 635 million euros. The tax allowance for children will be increased by 60 euros to 6,672 euros in January. In 2026 it will increase by a further 156 euros to 6,828 euros. The immediate child supplement for families with low incomes will increase by five euros to 25 euros per month from January.

There is tax relief for citizens. Without the agreed reform, they would have to pay more to the tax authorities due to the increasing tax rate from January, even if their salary increase only compensates for inflation. This effect is called cold progression. To prevent this, several key parameters in the tax tariff are being shifted so that higher tax rates only take effect later.

Germany ticket secured for one year

At least for 2025, the financing of the Deutschlandticket for local transport is available. However, the monthly price for the approximately 13 million users will rise from currently 49 euros to 58 euros. After the Bundestag, the Bundesrat also agreed to a change to the regionalization law. The core issue is the transferability of remaining funds from government subsidies to subsequent years. What will happen with the ticket in the long term is unclear, especially due to financing issues.

Federal Constitutional Court better secured

In the future, the Federal Constitutional Court will be better protected against anti-democratic forces. Central requirements for the structure and functioning of the court are now enshrined in the Basic Law, so that they can only be changed with a two-thirds majority. Until now, these rules were laid down in simple laws that could also be changed with a simple majority.

It is now enshrined in the Basic Law that the court has 16 judges and two senates, that the judges’ term of office is twelve years and that re-election is not possible. In order to ensure that the court’s ability to function is not jeopardized under any circumstances, it has been stipulated that judges will continue to carry out their official duties until a successor is elected. And a procedure has been laid down in the event that political forces in the Bundestag or Bundesrat have a blocking minority against the election of new judges and want to abuse this to block the court.

Nursing care insurance will become more expensive again in the new year due to rising billion-dollar costs. The contribution increases by 0.2 percentage points. The Federal Council approved the relevant Federal Government regulation. The care contribution was last increased in the summer of 2023.

The specific contribution amount depends on the number of children. For insured people with one child, the contribution will in future be 3.6 percent of gross wages; for people without children, the contribution will rise to 4.2 percent. With two children the contribution is 3.35 percent, with three children it is 3.1 percent, with four children it is 2.85 percent and with five or more children it is 2.6 percent. This includes an employer contribution of 1.8 percent.

Electronic ankle bracelet for domestic violence

In order to better protect victims of domestic violence, the federal states want to monitor perpetrators using electronic ankle bracelets in the future. A corresponding initiative from the state of Hesse received a majority. The reason given was that measures such as contact bans and proximity bans were not effective enough. The Federal Council called on the federal government to present a draft law on this matter as soon as possible.

Integration of asylum seekers into the labor market

On the initiative of the state of Bavaria, the Federal Council passed a bill for the early integration of asylum seekers into the labor market. It stipulates that every foreigner can be allowed to take up work after three months during an ongoing asylum procedure. So far this has only been possible for asylum seekers who are not obliged to live in a reception facility. People living in an institution are only allowed to start work after six months at the earliest. The bill will now be introduced into the Bundestag.

Help for the ailing auto industry

The countries want to ensure that the EU decision not to allow new cars with petrol or diesel engines from 2035 onwards will be reviewed in 2025 rather than in 2026. The resolution, taken at the initiative of Saarland, aims to ensure that the change towards sustainable drive technologies in Europe and Germany does not lead to a loss of jobs and market shares. The resolution will now be sent to the federal government, which will then have to decide whether to deal with it or not.

Federal Council remembers murdered Sinti and Roma

At the start of the meeting, the State Chamber remembered the Sinti, Roma and Yenish people murdered by the National Socialists. Across Europe, 500,000 of them fell victim to the criminal Nazi regime and were murdered in extermination camps, said Federal Council President Anke Rehlinger. “Today we stand here to remember these people and to help ensure that their suffering is never forgotten.”

The SPD politician emphasized: “It is the task of all of us to ensure that racism and discrimination never have a chance again.” Today there are around 70,000 Roma and Sinti living in Germany.