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Germany: Federal Constitutional Court Declares Child Care Allowance Act Unconstitutional

(July 27, 2015) On July 21, 2015, the German Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) ruled that the Deutscher Bundestag (German Parliament) lacked the legislative power to enact provisions on the care allowance (Betreuungsgeld), which provides money to stay-at-home parents. (BVerfG, 1 BvF 2/13, July 21, 2015 (in German).) The provisions of the Federal Act on Parental Allowance and Parental Leave on the child care allowance, which were inserted by the Care Allowance Act, are therefore void. (Bundeselterngeld- und Elternzeitgesetz [BEEG] [Federal Act on Parental Allowance and Parental Leave], Dec. 5, 2006, BUNDESGESETZBLATT [BGBl.] I at 2748, as amended, §§ 4a-4d, GERMAN LAWS ONLINE; Gesetz zur Einführung eines Betreuungsgeldes [Betreuungsgeldgesetz] [Act to Introduce a Care Allowance] [Care Allowance Act], Feb. 15, 2013, BGBl. I at 254.)

The child care allowance, as provided for under the now void provisions, was awarded to a parent who no longer qualified for the parental allowance and chose to take care of a child at home instead of sending him or her to a government-run day care facility. (BEEG § 4a.) The allowance totaled €150 (about US$167) per child per month and was available for children 15 to 36 months of age. (Id. §§ 4b, 4d.) The parental allowance equals 67% of the parent’s average income prior to the birth and is paid for the first 14 months of the child’s life. (Id. §§ 2 & 4.) The care allowance has been derisively referred to as a “stove bonus” and was cited as a factor in preventing women from returning to the workplace. (Melissa Eddy, Germany’s Top Court Strikes Down Federal Aid for Home Child Care, NEW YORK TIMES (July 21, 2015).)

Background

The German state Hamburg challenged the Care Allowance Act before the Federal Constitutional Court. Hamburg claimed that enacting such a law does not fall within the competency of the Federal Government. (BVerfG, 1 BvF 2/13, ¶ 13.) In general, the German Basic Law (the country’s constitution) provides that the authority to legislate on matters not conferred either exclusively or concurrently to the Federal Government belongs to the German states. (Basic Law for the Federal Republic of Germany [Basic Law] (May 23, 1949), BGBl. I at 1, as amended, art. 70, ¶ 1, GERMAN LAWS ONLINE (unofficial English translation).)

Furthermore, Hamburg contended that the Act itself violated the principle of equal treatment laid down in article 3 of the Basic Law in light of the Basic Law’s article 6, on the protection of family. (BVerfG, 1 BvF 2/13, ¶ 16.) Hamburg claimed that the care allowance reinforced gender stereotypes, as it was primarily used by women and was therefore contrary to the obligation of the state to promote the actual implementation of equal rights for women and men and to take steps to eliminate disadvantages that currently exist. (Basic Law art. 3, ¶ 2; Press Release, State of Hamburg, Hamburg klagt gegen das Betreuungsgeldgesetz [Hamburg Challenges the Care Allowance Act in Court] (Feb. 20, 2013), State of Hamburg website).) In addition, Hamburg maintained that the care allowance is mostly used by socially disadvantaged families whose children would benefit the most from early childhood education in a government-run day care facility, and therefore runs contrary to family policies. (Hamburg klagt gegen das Betreuungsgeldgesetz, supra.)

Decision

The Federal Constitutional Court ruled that the federal government lacked the legislative competency to enact the Care Allowance Act and therefore did not have to decide the separate questions on the compatibility of the act with the equal protection clause and the protection of family clause of the Basic Law. (BVerfG, 1 BvF 2/13, ¶¶ 27 & 74.)

According to article 72, paragraph 2, of the Basic Law, the Federation has concurrent legislative power on matters falling within certain enumerated clauses of article 74 of that Law and to the extent that federal regulation is necessary for the “establishment of equivalent living conditions” throughout the federal territory or for the “maintenance of legal or economic unity.” The Federal Constitutional Court agreed with the Bundestag that enacting measures on a care allowance falls under the category of public welfare legislation, which is a matter covered by concurrent legislative power. (Basic Law, art. 74, ¶ 1, no.7; BVerfG, 1 BvF 2/13, ¶ 28.)

The Federal Constitutional Court rejected the argument of the federal government that enacting care allowance provisions was necessary to establish equivalent living conditions throughout the federal territory. It noted that there are no harmonized rules throughout the Federation on a child care allowance, and found that the fact that the federal government was trying to generally improve living conditions is insufficient grounds for the Act’s adoption. (BVerfG, 1 BvF 2/13, ¶¶ 34-35.) Even though only the German states of Bavaria, Saxony, and Thuringia currently offer equivalent benefits, this fact does not materially disadvantage parents in other German states, in the opinion of the Court. This holds particularly true, the Court observed, given that the Act did not contain a provision that took into account the receipt by parents of such state care allowance benefits, so that parents in those states, as a result of the Act’s adoption, received twice as much care allowance. (Id. ¶ 37.)

The Court stated that the constitutional obligation to ensure citizens’ basic rights did not contain any additional requirements that make the enactment of care allowance necessary to establish equivalent living conditions. Publicly run day-care facilities are open to every child and parents have a legally enforceable right to claim a place in them for their children. If parents voluntarily choose to forgo that right, the Court noted, it does not trigger a legal obligation on the part of the Federal Government to compensate them for that decision. (Id. ¶ 39.)

The Federal Constitutional Court also held that a care allowance was not necessary to maintain the legal or economic unity of the Federation. A federal regulation is needed when there is the risk of the Federation’s legal fragmentation with serious long-term consequences unless it is enacted, or when it is a necessary condition for the functioning of the economy of the Federation, neither of which is applicable here, the Court found. (Id. ¶ 49.) The Act left current state laws on care allowances in place, thereby making legal harmonization throughout the Federation impossible. (Id. ¶ 51.) Furthermore, the Court held, the amount of only €150 a month as the prescribed allowance under the Act is neither adequate for the care nor intended to replace public with private child care. (Id. ¶¶ 53 & 55.)

Reactions to the Decision

Gerda Hasselfeldt, the chairwoman of the parliamentary group of the Christian Social Union (CSU), which is the Bavarian section of the Christian Democratic Union (CDU) Party, commented, “the Federal Constitutional Court only ruled on the federal competency of the German Federal Parliament to enact a law on a care allowance and not on the constitutionality of the concept of a care allowance itself.” She further stated, “the coalition parties should search for solutions of how to continue to offer a care allowance to parents. I am in favor of allocating federal money to the states in order to achieve that goal.” (Deutscher Bundestag, Keine Bundeskompetenz für Betreuungsgeldgesetz [No Federal Competency for Care Allowance Act] (July 21, 2015), German Parliament website.)

The German Minister for Family Affairs, Manuela Schwesig, on the other hand, declared that she was delighted that the decision of the Federal Constitutional Court provided clarity and that “it shows that the care allowance was the wrong approach and has no future.” She added, “the freed-up funds should benefit children and families, for example by providing better child care. The money should not just disappear in the coffers of the Federal Ministry of Finance.” (Press Release, Federal Ministry for Family Affairs, Senior Citizens, Women, and Youth, Bundesfamilienministerin Manuela Schwesig zum Urteil des Bundesverfassungsgerichts [Family Minister Manuela Schwesig on the Decision of the Federal Constitutional Court] (July 21, 2015), Federal Ministry for Family Affairs, Senior Citizens, Women, and Youth website.)