German Care Allowance Is Not Taxable, Authorities Clarify

Overview

• The Pflegegeld paid by Germany’s statutory long‑term care insurance is a social benefit and is not counted as taxable income or as extra earnings for recipients.
• Recipients who forward their Pflegegeld to close relatives or friends who provide care do not have to declare it as income and do not pay tax on those transfers.
• If the Pflegegeld is paid to a caregiver who has no close personal tie to the recipient, that payment is treated as taxable income and must be declared.
• Under set rules, informal family carers can earn small pension contribution credits from the Pflegekasse when the care meets conditions such as at least Pflegegrad 2, a minimum of ten hours of care per week, and the carer working no more than 30 hours a week.
• Pflegegeld is only available for people who receive home care and have at least Pflegegrad 2, so the clarification mainly affects home care recipients, their family carers, and decisions about hiring outside help.