Child Tax Credit Without an Application: Here’s How the Automatic Payment Is Supposed to Work
Anyone with children is familiar with the process: After a child is born, parents must apply for child benefit at the family benefits office—which involves forms, supporting documents, and processing times. The federal government wants to significantly simplify this process. Under a recent draft bill, child benefit would in many cases be paid out automatically in the future, without parents having to take any action themselves.
Phased Introduction
The transition to an application-free procedure is planned in two stages.
In the first stage, automatic payment will apply starting with the second child. The rationale is obvious: If child benefit has already been established for an older sibling, the Family Benefits Office already has the family’s essential data on file—in particular, the bank account details and the parents’ personal information. This existing information will be reused in the future so that a separate application is no longer necessary for each additional child.
In the second phase, the procedure will be extended to include first-born children. Since no data from previous child benefit payments is available in these cases, the missing bank account information will be supplemented using the identification database of the Federal Central Tax Office.
How does the automatic process work?
The trigger for the automatic child benefit payment is the assignment of a tax identification number for the newborn child. As soon as this is issued by the Federal Central Tax Office, the Family Benefits Office automatically checks whether all requirements for a payment have been met. The key factors here are that all relevant data is available, there are no doubts regarding eligibility, and a valid bank account is on file.
If these conditions are met, the benefits are determined and paid out without any further action required from the parents. If automatic processing is not possible—for example, because information is missing or further clarification is needed—the parents will instead receive a welcome letter outlining the next steps.
What does this mean for families?
For most parents, the new regulation should be a noticeable relief. Especially in the weeks following a birth, when there are already numerous administrative procedures and organizational tasks to handle, this eliminates yet another bureaucratic step. At the same time, the automatic review is intended to ensure that no unauthorized payments are made.
Important to know: The draft bill is currently going through the parliamentary process. Details may still change before final adoption. Until the new rules take effect, the traditional child benefit application to the family benefits office remains required.
About Trimborn . Partner
Trimborn . Partner is a tax consulting and auditing firm with offices in Düsseldorf and Oberhausen. As experienced tax advisors, we support families, individuals, and businesses with all tax-related matters—from income tax returns to the optimal use of government benefits such as child benefits or child tax credits. Our tax advisory experts in Düsseldorf and Oberhausen will be happy to advise you on your individual entitlements.
