Anyone moving abroad with their whole family, or with just the children, often assumes that child benefit (Kindergeld) will simply continue as before – after all, nothing changes about the child itself. Legally, however, the question is framed much more narrowly: under Section 62 of the German Income Tax Act (Einkommensteuergesetz, EStG), entitlement to child benefit generally requires the entitled person to have a residence (Wohnsitz) or habitual abode (gewöhnlicher Aufenthalt) in Germany. Where this connecting factor falls away, entitlement generally lapses as well – subject to exceptions that differ significantly depending on whether the move is within the EU/EEA or to a third country. This article sets out when child benefit lapses on emigration, what special rules apply for a move within Europe, what happens where children live or study abroad while a parent remains in Germany, and what repayment risk arises from late notification to the Family Benefits Office (Familienkasse).
The statutory starting point: residence and habitual abode under Section 62 EStG
Under Section 62(1) sentence 1 no. 1 EStG, entitlement to child benefit first requires having a residence or habitual abode in Germany. The same tax-law standards apply for determining when a residence within the meaning of Section 8 of the German Fiscal Code (Abgabenordnung, AO), or a habitual abode within the meaning of Section 9 AO, is given up, as apply generally to unlimited income tax liability – this aspect is covered in detail elsewhere on our blog and is deliberately not repeated here. What matters for the child benefit entitlement is this: on final emigration and complete relinquishment of the German home, the connecting factor under Section 62(1) sentence 1 no. 1 EStG generally lapses, regardless of whether the children emigrate too or remain in Germany.
Anyone who keeps a home in Germany – for example, because the move happens gradually or an option to return is to be kept open – may, in certain circumstances, still be regarded as resident in Germany. There is no blanket formula that applies reliably to every individual case; what matters is always an overall assessment of the actual living and life circumstances, not merely registration or deregistration with the residents’ registration office.
Exception: unlimited tax liability on application under Section 1(3) EStG
In addition to the standard case of German residence, Section 62(1) sentence 1 no. 2 EStG also preserves the child benefit entitlement where the entitled person has no residence or habitual abode in Germany, but is treated as subject to unlimited income tax liability under Section 1(2) EStG or Section 1(3) EStG. For emigrated families, the second variant is of particular practical relevance: an application for unlimited tax liability under Section 1(3) EStG.
This provision is aimed at individuals living abroad who continue to earn German-source income within the meaning of Section 49 EStG – for example, from continuing German employment, from letting a property remaining in Germany, or from a German pension. On application, they are treated as subject to unlimited tax liability if either at least 90 percent of their total income is subject to German income tax, or their income not subject to German tax does not exceed the basic tax-free allowance under Section 32a EStG. The amount of foreign income not subject to German tax must be evidenced by a certificate from the competent foreign tax authority. If the application is granted, this also reopens access to child benefit via Section 62(1) sentence 1 no. 2(b) EStG – a route that, in practice, is mainly relevant for cross-border commuters, for people continuing German employment while working remotely from abroad, or for emigrants with significant German-source income, but which is subject to application and evidence requirements and is reassessed each year.
A closely related but considerably rarer category is governed by Section 1(2) EStG in conjunction with Section 62(1) sentence 1 no. 2(a) EStG: German nationals living abroad who are employed by a domestic legal entity under public law and receive their salary from a German public fund – such as diplomats or seconded overseas civil servants – are deemed subject to unlimited tax liability by operation of law, without needing to apply. For the vast majority of emigrants, however, this category does not apply.
Moving within the EU, the EEA, or to Switzerland: coordination under Regulation (EC) 883/2004
The position is markedly different where the move is within the European Union, to a state of the European Economic Area (Iceland, Liechtenstein, Norway), or to Switzerland. Here, German tax law alone does not apply; instead, Regulation (EC) No. 883/2004 on the coordination of social security systems applies, which expressly covers family benefits such as child benefit. Its basic principle: under Article 67 of Regulation (EC) 883/2004, a person employed in one Member State is entitled to family benefits from that state as if the family members resided there – even where the family in fact lives in a different Member State.
This regularly leads to situations where more than one state would be responsible for the same family – for example, where one parent remains employed in Germany while the family has moved to another Member State, and the other parent is also employed there. For this situation, Article 68 of Regulation (EC) 883/2004 contains priority rules: primary responsibility lies with the state where employment is carried out and where the child also resides; secondary responsibility lies with the state where employment is carried out without the child residing there. Where the foreign state of residence of the child has primary responsibility and the family benefit paid there is lower than German child benefit, an entitlement to the difference – so-called differential child benefit (Differenzkindergeld) – exists against the German Family Benefits Office. Conversely, where Germany has primary responsibility, for example because the relevant employment is carried out there, full German child benefit is paid, potentially with a foreign benefit credited against it.
The following overview summarises the key differences between a move within the EU/EEA/Switzerland and a move to a third country:
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| Criterion | EU, EEA, or Switzerland | Third country without a coordination agreement |
|---|---|---|
| Legal basis for child benefit/family benefits | Regulation (EC) 883/2004 (coordination), in addition to Sections 62 et seq. EStG | Sections 62 et seq. EStG alone, no supranational coordination law |
| Entitlement where the whole family moves away | May be preserved via the primarily responsible employment, potentially as differential child benefit | Generally lapses, exception only where unlimited tax liability applies under Section 1(2) or (3) EStG |
| Children resident in the target country | Remain a “child” within the meaning of Section 63 EStG, regardless of the EU/EEA state of residence | Generally not taken into account (Section 63(1) sentence 3 EStG), narrow exception for households of certain overseas civil servants |
| Overlap with a foreign family benefit | Priority rules under Article 68 of Regulation (EC) 883/2004, potentially differential child benefit | Exclusion or credit under Section 65 EStG |
| Reporting burden vis-à-vis the Family Benefits Office | Annual review, immediate notification of changes | Likewise, plus evidence of unlimited tax liability where applying under Section 1(3) EStG |
Children abroad: residence and studies while a parent remains in Germany
A distinct category concerns not the emigration of the entitled person, but that of the child: one parent remains resident in Germany, while the child lives or studies abroad. Here, Section 63(1) sentence 3 EStG sets its own limit: children who have neither a residence nor their habitual abode in Germany, in an EU Member State, or in an EEA state are, in principle, not taken into account as a child relevant for child benefit purposes – regardless of where the person entitled to child benefit themselves resides. An exception applies only where the child lives in the household of a person entitled under Section 62(1) sentence 1 no. 2(a) EStG, that is, within the narrow category of overseas civil servants described above – not a practicable exception for the vast majority of cases.
Within the EU and the EEA, this restriction does not apply: a child who, for example, lives or studies in France, the Netherlands, or Austria remains eligible for child benefit purposes, provided the other requirements – in particular age and, where applicable, education under Section 32 EStG – are met; in many such cases, the coordination described above under Regulation (EC) 883/2004 also additionally applies.
More common in practice is the scenario of several years of study in a third country outside the EU/EEA, for example in the USA, Canada, or Australia, while the child remains formally registered at the parental home in Germany. Here, the decisive question is not Section 63(1) sentence 3 EStG, but whether the child has retained their domestic residence within the meaning of Section 8 AO at all. According to the case law of the Federal Fiscal Court (Bundesfinanzhof, BFH), a child studying abroad for several years generally only retains their residence at the parental home if they continue to use that home predominantly during periods free of study (BFH, judgment of 23 June 2015 – III R 38/14; confirmed, among others, by BFH, judgment of 21 June 2023 – III R 11/21). Where it already becomes apparent during ongoing studies that the child will no longer predominantly spend study-free periods at the parental home, the domestic residence is lost, under this case law, from that point in time – not only at the end of the academic year. Parents wishing to preserve the child benefit entitlement during an extended course of study in a third country should therefore carefully document the child’s actual stays in Germany, for example through entry records, rather than relying on the mere registered address.
In addition, Section 65 EStG excludes German child benefit, or credits it, insofar as a comparable foreign family benefit, or a benefit from an inter- or supranational institution, is paid for the same child, or would be payable on application – regardless of whether the benefit has actually been applied for.
Reporting obligations to the Family Benefits Office
Anyone receiving child benefit is obliged, under Section 68(1) EStG, to notify the Family Benefits Office (Familienkasse) without delay of changes to the circumstances relevant to the benefit. Where there is a foreign connection, this particularly includes the entitled person’s own emigration, a child’s emigration, a change in employment in Germany or abroad, the start or end of education, and – for children in a third country – any change that could call into question the continued existence of the domestic residence. Children who have reached the age of 18 are also required, at the Family Benefits Office’s request, to cooperate personally in clarifying the facts.
In cross-border cases, the Family Benefits Office also regularly reviews the entitlement requirements – in practice, usually once a year – by means of a review form, which must be returned fully completed together with supporting evidence. Anyone who ignores this form, or answers it late, risks not only an evidentiary problem but a formal revocation of the award.
Repayment risk from late notification
Anyone who fails to report a relevant change in good time bears an asymmetric financial risk. Where child benefit is newly applied for following emigration – for example, after a successful application for unlimited tax liability under Section 1(3) EStG – it has, since the legislative change of 1 January 2018 (at the time Section 66(3) EStG old version, substantively unchanged since the 2019 recast by the Act to Combat Illegal Employment and Social Benefit Abuse and now found in Section 70(1) sentence 2 EStG), only been paid retroactively for the last six months before the application was received. This short period does not, however, apply in the other direction: where entitlement lapses – for example because the domestic residence has been given up, or a child no longer meets the requirements of Section 63 EStG – the child benefit award must, under Section 70(2) EStG, be revoked retroactively to the date the circumstances changed, regardless of how far back that date lies.
Because child benefit is paid as a tax refund (Steuervergütung) under Section 31 sentence 3 EStG, the limitation provisions of the Fiscal Code apply correspondingly to revoking the award. The standard assessment period under Section 169(2) sentence 1 no. 2 AO is four years; it is extended under Section 169(2) sentence 2 AO to five years in the case of reckless tax evasion and to ten years in the case of intentional tax evasion. In practice, this means: anyone who fails to report emigration, or the lapse of the requirements for a child, risks a repayment claim covering a period of up to four years – longer still in the case of gross negligence or intent – while a late reapplication in the reverse situation is only honoured retroactively for six months. This asymmetry is the central reason why prompt, documented notification to the Family Benefits Office carries considerably more economic weight than it may appear at first glance.
The following example is entirely fictitious and serves illustrative purposes only; it does not describe any real case or real person. A family with two minor children moves to Spain because one parent takes up new employment there; the other parent initially continues working for a few more months under a fixed-term German remote-work contract. The Family Benefits Office is not informed of the move, and German child benefit continues to be paid in full. Only two years later does a routine review reveal that the Spanish family benefit would have had priority, and that at most a differential child benefit under Article 68 of Regulation (EC) 883/2004 would have been payable. The Family Benefits Office retroactively revokes the award and reclaims the difference between the German child benefit paid and the notional differential child benefit for the entire period – an amount that would have been considerably smaller, or avoidable altogether through correct classification, had it been reported in good time.
Conclusion
Child benefit on emigration is not an all-or-nothing question, but depends on several factors that must be assessed independently of one another: whether the domestic residence under Section 62(1) EStG continues or has been given up; the possibility of unlimited tax liability on application under Section 1(3) EStG; whether the target country belongs to the EU, the EEA, or Switzerland and thereby opens up coordination under Regulation (EC) 883/2004 with a possible differential child benefit; and, for children living or studying abroad, the narrow special rule of Section 63(1) sentence 3 EStG for third countries. Anyone who clarifies these points before emigrating and promptly notifies the Family Benefits Office of any changes avoids not only formal queries, but above all the economic risk of a multi-year repayment claim, which weighs considerably more heavily than the loss of a few months of retroactive payment in the case of a late reapplication.
When is legal advice worthwhile for child benefit after emigration?
A need for advice typically arises where the family does not emigrate together, where income from several states overlaps, where a child goes abroad to study in a third country, or where, following an emigration some time ago, it is unclear whether and to what extent child benefit is still owed or could be reclaimed. The Fiala law firm has published extensively on international child benefit and family benefits law and supports clients in reliably assessing their own entitlement before and after emigration, clarifying EU coordination questions relating to differential child benefit, and meeting reporting obligations to the Family Benefits Office in a way that avoids repayment claims wherever possible. If you have any uncertainty about your personal situation, please contact the firm at an early stage.
