The economist Nicola Fuchs-Schündeln warns against further spending cuts for parental benefits and instead advocates for a comprehensive reform that emphasizes longer periods of father leave. Speaking to the “Handelsblatt”, the president of the Institute for Social Research at the Berlin Science Center (WZB) stated, “We should not be thinking about how to save money on parental benefits, but rather how to reform them”. This suggestion comes against the backdrop of budget-saving targets for 2027 set for Federal Family Minister Karin Prien, who needs to cut 500 million euros in her department-a significant portion of which would be expected to come from reforms to the parental allowance system.
Fuchs-Schündeln argued that policies should provide stronger incentives that “enable mothers to have children and remain professionally active”. She pointed out that Germany is facing a record low in birth rates, while the retirement of the Baby Boomer generation in the coming decades will coincide with labor shortages.
Specifically, the WZB president proposes expanding paternity leave while simultaneously reducing the allowances paid for maternity leave. Her proposal suggests that for a maximum of seven individual months of parental benefits, each parent should receive 80 percent of their net income. If a parent takes more months of leave, the replacement income rate should drop to 50 percent. Fuchs-Schündeln explained that this system “would increase the incentive for couples to divide the caregiving of the child during the parental leave period equally”.