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No federal legislative competence for child care allowance

Press Release No. 57/2015 of 21 July 2015

Judgment of 21 July 2015
1 BvF 2/13

The federal legislature has no legislative competence for child care allowance. The First Senate of the Federal Constitutional Court rendered this decision in its judgment pronounced today. As a consequence, §§ 4a to 4d of the Federal Parental Benefit and Parental Leave Act (Bundeselterngeld- und Elternzeitgesetz), which form the basis for an entitlement to child care allowance, are null and void. Although these provisions can be attributed to the field of public welfare pursuant to Art. 74 sec. 1 no. 7 of the Basic Law (Grundgesetz – GG) to which concurrent legislative competence applies, the prerequisites of Art. 72 sec. 2 GG permitting the Federation to exercise this competence are not fulfilled. The judgment was rendered unanimously.

Facts of the Case:

The applicant in the abstract judicial review proceedings is the Senate of the Free and Hanseatic City of Hamburg (Freie und Hansestadt Hamburg). The Senate challenges §§ 4a to 4d of the Federal Parental Benefit and Parental Leave Act, which were introduced by the Act on Child Care Allowance (Betreuungsgeldgesetz) of 15 February 2013. These provisions essentially stipulate that parents, regardless of their income, are entitled to child care allowance in the amount of initially 100 Euros and now 150 Euros per month from the 15th to the 36th month of their child’s life, provided that they neither use publicly funded day care facilities nor child day care services for the child.

Key Considerations of the Senate:

1. The provisions on child care allowance are to be attributed to the field of public welfare within the meaning of Art. 74 sec. 1 no. 7 GG. No other legal basis applies. The concept of “public welfare“ is to be interpreted in a broad sense. It requires that a special situation of at least potential need exist upon which the legislature reacts. In this context, it is sufficient if a situation of need, i.e. a situation that is accompanied by extraordinary burdens, exists – even if only designated by type and not necessarily acute – and the act seeks to eliminate or ease this need. This applies to the case of child care allowance.

2. However, the prerequisites of Art. 72 sec. 2 GG are not fulfilled.  According to that provision, the Federation is competent to pass legislation in the field of Art. 74 sec. 1 no. 7 GG only if and to the extent that a federal regulation is needed to establish equal living conditions in the federal territory or to preserve legal and economic unity in the interest of the entire country.

a) The regulations on child care allowance are not necessary for establishing equal living conditions in the federal territory.

aa) This would be the case if living conditions in the Laender had taken a drastic diverging development jeopardising the social structure of the federal state, or if such a development was evidently about to occur. The general aim of enacting uniform federal regulations or to achieve a general improvement of living conditions is not sufficient.

bb) The provisions on uniform child care allowance throughout the Federal Republic do not meet these requirements. In particular, the considerations stated in the reasons for the bill do not constitute a solid basis to this effect.

Although presently only Bavaria, Saxony and Thuringia (only for children born until 30 June 2015) offer similar state benefits, this does not lead to parents being treated significantly less favourable in those Laender that do not grant such benefits. Federal child care allowance could not achieve a nationwide equal funding standard for families with small children anyway, because there is no provision requiring that the allowance already granted by the Laender be considered for payment of federal child care allowance, so that in addition to the federal child care allowance, parents in the three named Laender can still draw the Land child care allowance.

Nor does a potential necessity of child care allowance for establishing equal living conditions follow from the argument that since the Federation and the Laender have for years been funding the extension of child day care, there must be an alternative to child care provided by third parties. The concept of equal living conditions seeks to compensate disadvantages suffered by residents of individual Laender in order to prevent that the social structure of the federal state is jeopardised, however, it does not serve to compensate other inequalities.

Notwithstanding the question of whether this could be relevant with respect to the requirements under Art. 72 sec. 2 GG, the fundamental rights do not allow for a different conclusion. Specific entitlements to particular state benefits cannot be derived from the constitutional requirement under Art. 6 secs. 1 and 2 GG to support parents in the care and upbringing of their children. Nor does the principle of equality in Art. 3 sec. 1 GG oblige the federal or the Land legislature to grant child care allowance to avoid putative discrimination against those parents who do not use publicly funded child care. The offer to use publicly funded child care is open to all parents. If parents do not make use of it, they voluntarily decline this offer without triggering a constitutional obligation to compensate.

Nor do the still existing considerable differences between the Laender regarding availability of public and private offers in the field of early childhood care provide sufficient reason why child care allowance should be necessary to establish equal living conditions. Because child care allowance is not designed as compensatory benefit for cases in which small children cannot be placed in a child care facility. On the contrary, child care allowance is granted even in cases in which available child care is not used.  However, most importantly, there is an enforceable right of access to publicly funded child care facilities that is not subject to availability of slots. Consequently, child care allowance never sought to close a gap in the availability of child care slots.

Finally, the social policy wish to offer more choice between child care within the family or in a child care facility does not itself provide a necessary basis for federal legislation within the meaning of Art. 72 sec. 2 GG. The question of whether child care allowance is the appropriate means to reach this goal is therefore irrelevant.

b) Child care allowance is not necessary to preserve legal and economic unity.

aa) The presumption that the challenged federal regulation is necessary to preserve legal unity is already precluded by the fact that it allows additional comparable benefits to exist in individual Laender; therefore legal unification cannot be achieved anyway. Nor is federal child care allowance necessary to preserve economic unity, since differing regulations in the Laender or inactivity of the Laender in this field have not led to visible considerable disadvantages for the overall economy.

bb) The considerations stipulated during the legislative procedure for the Child Care Funding Act (Kinderförderungsgesetz) cannot be applied to child care allowance. While that act emphasises the connection between child care and the participation of parents in working life thereby referring to the provisions as important factors for the labour market and the economy, the child care allowance under review does not encourage parents’ participation in the labour market. Particularly, if one considers its amount, it is neither intended nor appropriate to finance private, not publicly funded child care.

cc) Nor can the considerations in the bill to introduce parental benefit (Elterngeld), which base the interest to regulate at federal level mainly on the effects of parental leave on the labour market, be applied to child care allowance. With an amount of 67% of the previous income, parental benefit is a considerable factor if one considers interrupting employment. Child care allowance in the amount of 150 Euros per month can obviously not have a remotely similar effect on the decision to interrupt employment.

c) Also the argument that child care allowance in combination with the Child Care Funding Act, from the viewpoint of legal competence, could be regarded as a master plan does not justify a necessity of the challenged provisions under Art. 72 sec. 2 GG.

aa) As a rule, if the federal legislature wishes to install different types of public welfare benefits, each benefit must for itself fulfil the prerequisites of Art. 72 sec. 2 GG.

The case at hand allows for no exception.  The challenged provisions are not so inseparably connected to other federal funding instruments that the necessity of the latter would by way of exception extend to the challenged provisions. The provisions of the Child Care Funding Act would not lose any of their effectiveness if the child care allowance were dropped. Therefore, it is irrelevant whether the fact that child care allowance was mentioned in the Child Care Funding Act proves that that act already established a master plan for funding small child care. This statement of intent by the legislature documents that the provisions are connected in concept. However, it is not this connection, but the objective inseparability of the provisions that is decisive. In the case at hand there is no such inseparability.

bb) Nothing else follows from the federal legislature’s prerogative concerning the prerequisites of Art. 72 sec. 2 GG. It particularly concerns estimation and evaluation of factual developments and also extends to a prerogative for conceiving and designing laws that includes linking independent welfare instruments. However, this does not mean that the question of whether a regulation within the scope of an overall federal regulatory concept is necessary is completely exempt from constitutional review. Granting the federal legislature the competence to link regulations outside judicial review is impermissible particularly in view of the genesis of Art. 72 sec. 2 GG. If the legislature were able to establish competence by virtue of politically motivated connection, it would be in control of the statutory requirements. In 1994, the constitution-amending legislature intended to preclude this by amending Art. 72 sec. 2 GG.

 3. The applicant’s question, whether the challenged provisions are compatible with the fundamental rights does not require an answer, because the provisions are void due to the lack of federal legislative competence.