Parents whose child is in college and no longer lives at home are still entitled to child benefit, provided the child is not yet 25 years old. If a claim exists, the child benefit is not paid equally to both parents; rather, under the Income Tax Act, it is payable to only one eligible recipient (although eligibility may change). But who receives the child benefit if the parents are divorced or living apart?
The Federal Fiscal Court (BFH) recently ruled that, for the entitlement to child benefit, it is not only important that the parents pay child support at all.
If both parents provide what is known as a “maintenance allowance,” the child benefit goes to the parent who regularly pays the higher maintenance allowance.
The Case
A mother filed a lawsuit after her application for child benefit was denied because her son did not live in the household of a biological parent and the father had provided the majority of cash child support. In the year in question, the father initially paid his son, who was a college student, monthly cash child support of 500 euros, which he increased to 590 euros starting in September. The mother paid 400 euros per month starting in January and 490 euros per month starting in September. In addition, she paid her son another 1,502 euros for semester fees, a rail pass, dental care, and special educational expenses.
The Tax Court (FG) ordered the Family Benefits Office to pay the child benefit to the mother, since, in the FG’s view, all payments must be taken into account when determining the highest maintenance allowance, even if they were made—in addition to the monthly maintenance allowance—in the form of irregular additional payments.
Only Regular Payments Count
The Federal Fiscal Court (BFH) saw it differently. Although the mother had paid more child support than the father over the course of the entire year, he was primarily entitled to child benefit because his ongoing cash child support was 100 euros higher than the mother’s in every month of the year. In their reasoning for the ruling, the judges explained that child support payments to the child must generally be made both for and during the month for which child benefit is being claimed.
Regular payments by parents that are made in lump sums covering several months, as well as retroactive and advance child support payments, one-time payments for special financial needs (such as medical expenses or educational costs), and in-kind benefits (such as the free provision of housing) are not taken into account when determining who is entitled to child benefit.
Federal Fiscal Court (BFH) ruling of October 11, 2018 – III R 45/17
Similar Case Before the Federal Fiscal Court
A similar child benefit case is currently pending before the Federal Fiscal Court. It aims to clarify the criteria used to determine which parent the child is considered to belong to in terms of household affiliation. The appeal is being heard under the following case number: III R 59/18
Tjark Menssen is a lawyer at DGB Rechtsschutz GmbH.
