The child grant reform: Some improvements - but now an even greater loss of income at the upper income ceiling

On 1 October 2008 the amendment to the federal child grant law took effect. Its goal is an improvement of the child grant scheme. The federal government hopes that with the new law twice as many children and families will be reached as previously. With the re-definition of the minimum income limit and a lowering of the transfer reduction rate, two weak points of the old law have been corrected. However, a clear worsening has occurred elsewhere: for those who reach the maximum income limit, household income will decline more strongly than before. The result is that the willingness to become independent of social transfers via one's own efforts will be weakened.