Understanding the Pflegepauschbetrag
The lump sum care allowance in Germany, formally known as the Pflegepauschbetrag, is a tax allowance designed to provide financial relief to individuals who personally and unremuneratedly care for a dependent relative. This allowance is not a direct payment but rather a fixed amount that reduces the taxable income of the caregiver. It is intended to help offset the various costs associated with caregiving, such as travel expenses, without requiring the caregiver to provide receipts for every small expense. The legal basis for this is found in § 33b, paragraph 6 of the German Income Tax Act (EStG).
Eligibility Requirements
To be eligible for the Pflegepauschbetrag, specific criteria must be met by both the caregiver and the person being cared for.
For the caregiver:
- The care provided must be unremunerated. This is a critical distinction, as receiving a salary or the Pflegegeld from the care recipient will generally disqualify you.
- An exception exists for parents of disabled children, where the care allowance is not considered income and does not prevent claiming the Pflegepauschbetrag.
- The caregiver must personally provide the care.
For the care recipient:
- The person must be officially recognized as having at least Care Grade 2 (Pflegegrad 2).
- Alternatively, the person must be classified as "helpless," which is often indicated by the "H" marker (Merkzeichen H) on a severely disabled person's pass.
- The care must predominantly take place in the home of either the caregiver or the care recipient. The residence can be within Germany or another country in the EU/EEA.
How the allowance is calculated
The amount of the Pflegepauschbetrag is tiered based on the care grade of the dependent person and has been adjusted over the years.
- Care Grade 2: €600 per year
- Care Grade 3: €1,100 per year
- Care Grade 4 or 5 or "H" marker: €1,800 per year
If the care recipient's care grade changes during the year, the highest grade held during that year is used to determine the amount. If multiple people share the care, the allowance is divided equally among them, regardless of who provided more time or effort.
Pflegepauschbetrag vs. Pflegegeld
It is common for people to confuse the Pflegepauschbetrag with Pflegegeld (care money), but they serve entirely different purposes. The table below highlights the key differences.
| Feature | Pflegepauschbetrag | Pflegegeld |
|---|---|---|
| Type of benefit | An annual tax allowance claimed by the caregiver. | A monthly, cash benefit paid to the care recipient. |
| Purpose | To provide a tax reduction for the caregiver to compensate for expenses. | To provide the recipient with funds to arrange for their own care, often paying informal caregivers. |
| Recipient | The caregiver, claimed on their income tax return. | The person in need of care. |
| Frequency | Once per year. | Monthly. |
| Taxability | It reduces the caregiver's taxable income. | It is generally tax-free for the recipient and for caregivers who are not being paid for their time but are using the funds for care. |
| Proof | No receipts for individual expenses are required. | The care recipient may be subject to quality checks by the Medical Service of the Health Insurance Funds (MDK). |
| Requirement | The caregiver must not receive income for the care, including the care recipient's Pflegegeld. | Can be claimed alongside professional in-kind care services (Pflegesachleistungen). |
Alternative to the Pauschbetrag: Claiming Actual Expenses
For caregivers whose actual care-related expenses exceed the fixed Pflegepauschbetrag, it can be more beneficial to claim these costs as extraordinary burdens (außergewöhnliche Belastungen) in their tax return instead.
- Proof: This method requires keeping detailed records and receipts for all expenses, which must then be proven to the tax office.
- Reasonable Burden: When claiming actual costs, the tax office applies a "reasonable personal burden" (zumutbare Eigenbelastung), a percentage of your total income, which you are expected to bear yourself before a tax reduction is granted.
- Comparison: To decide which method is more beneficial, caregivers should calculate their expenses, subtract the "reasonable personal burden," and then compare the result to the fixed Pflegepauschbetrag.
How to Apply
Applying for the Pflegepauschbetrag is straightforward, as it is done through the caregiver's annual income tax return.
- Obtain documentation: Ensure you have documentation proving the care recipient's Care Grade (at least 2) or their "helpless" status, such as a notice from the long-term care insurance fund (Pflegekasse) or a disabled person's pass.
- Complete tax return: Fill out the "Extraordinary Burdens" annex (Anlage Außergewöhnliche Belastungen) of your income tax return.
- Provide details: In the relevant lines, you will need to provide the name, address, and tax identification number (Steuer-Identifikationsnummer) of the person you are caring for, along with their care grade.
- No payment necessary: Since it is a tax allowance, there is no direct payout. Instead, the amount reduces your overall taxable income, resulting in a lower tax liability.
Conclusion
The Pflegepauschbetrag is a crucial piece of Germany's social support system, providing valuable tax relief to the thousands of individuals who dedicate their time to caring for loved ones at home. By understanding the specific eligibility requirements and how it differs from the monthly Pflegegeld, caregivers can ensure they are properly compensated for their efforts and potentially lower their annual tax burden. While it offers a simple, lump-sum tax reduction, those with significant expenses should weigh this option against claiming actual costs as extraordinary burdens to determine the most financially advantageous approach. Ultimately, this tax provision acknowledges and supports the vital role of unpaid, family-based caregiving in German society.
