Duration and amounts of payment of child care benefits
The amount of the child care allowance and the payment procedure differ depending on whether the child’s mother or father uses non-transferable or transferable months of leave to care for the child.
Non-transferable months are a minimum period of at least two months (60 calendar days) of child care for each of the child’s parents, which they must use and cannot transfer to each other.
In non-transferable childcare months, 78% is paid. amount of compensatory earnings of the recipient. This amount is calculated based on the person’s insured income received during the 12 consecutive months preceding the month preceding the month of entitlement.
For example, parental leave started in 2024. in the month of September. When calculating the payment, 2023 will be evaluated. in August – 2024 income in July.
In the remaining months of childcare leave, the amount of the payment depends on the duration of the payment of the childcare allowance. If it is chosen to take care of the child until he turns 18 months, the amount of child care allowance will be 60 percent. amount of compensatory earnings of the recipient of the benefit.
If you choose to receive childcare allowance until the child turns 24 months, the amount of childcare allowance until the child turns 12 months will be 45%. the amount of compensatory earnings of the recipient, and from 12 months until the child reaches 24 months – 30 percent. amount of compensatory earnings.
First, the payment begins for a non-transferable period of two months. It is important to remember that when one parent does not use the non-transferable months, they cannot be used by the other parent. In this case, the benefit payment period is shortened by the unused period.
Child care allowance and other income in non-transferable months
You are allowed to receive additional income while receiving Childcare Benefit, but in some cases it may reduce the amount of Childcare Benefit you receive.
Persons receiving childcare allowance for non-transferable months and having income from which social insurance contributions are calculated are paid the difference between childcare allowance and the income received.
In cases where a child is raised by one parent and receives childcare allowance for an additional two-month parental leave and has additional income, childcare allowance is paid regardless of the additional income received at that time.
Case of Dovil (in non-transferable months). It is important to note that all examples are illustrative in nature, show preliminary results, and the size of each person’s payment is calculated individually.
Dovilė (architect, 30 years old) had a daughter and chose to receive childcare allowance until the child is 18 months old. Dovila’s average income from which the benefit is calculated was 2,500 euros on paper. Based on this income, the amount of the benefit calculated in non-transferable months amounts to 1,950 euros (78 percent of income) before taxes.
Let’s say Dovilė works part-time during childcare leave and receives an additional 1,000 euros of work income in both non-transferable and transferable months.
In the non-transferable months, Dovilė’s child care allowance amounts to 950 euros. Since the amount of the calculated benefit is 1,950 euros and she received 1,000 euros of work income, she is paid the difference between the child care benefit and the income received:
1950 euros – 1000 euros = 950 euros before taxes.
Child care allowance and other income in transferable months
During the transferable childcare months, income from working activities does not reduce the child care allowance received, if the sum of the allowance and additional income does not exceed 100 percent. of the former average monthly salary, according to which the child care allowance was calculated.
Generally speaking, a person can earn so much that the benefit and their additional earned income are no more than their previous average salary. If the earned income and the benefit exceed the former average salary, the child care benefit is reduced accordingly.
If the income is not calculated for the whole month – for example, the person had income only on certain days of the month, the period of income generation and the amount of the child care benefit are assessed during the period when the person had additional income.
The case of Dovilė (in transferable months). Let’s remember that Dovilė’s average income, from which the childcare allowance is calculated, was 2,500 euros. Thus, the amount of the payment calculated for her in the transferred months is 1,500 euros (60 percent of income).
During the transfer months, Dovilė continues to work and her salary reaches 1000 euros.
During the transfer months, Dovilė’s child care allowance is not reduced. This is due to the fact that the amount of the woman’s calculated benefit (1,500 euros) and additional income (1,000 euros) amounts to 2,500 euros before taxes. This amount is the amount of the woman’s average salary on which the benefit was calculated, so the benefit is not reduced.
How much can be earned during parental leave if the average income is extremely low
Residents who receive the minimum child care benefit and other income or benefits have the opportunity to work and their benefits are not reduced, if the child care benefit and other income or benefits together do not exceed the minimum monthly wage (MMA).
If the average wage on which the child care benefit was calculated is lower than the MMA in effect in the month of receipt of income or benefits, the average wage is considered to be equal to the MMA.
Anton’s case. Antanas (salesman, 33 years old). After the birth of his son, Antanas chose to receive child care allowance until the child is 24 months old. Antanas’ average income from which the child care allowance is calculated was 850 euros before tax, which is less than the current MMA (924 euros). Antanas was awarded the lowest possible payment – 440 euros. If the benefit floor had not been applied, the benefit calculated based on the husband’s income would have been even lower: by the time the child reaches 12 months, it would amount to 382.50 euros, by 24 months – 255 euros.
Antanas continues to work during parental leave and earns an average of 600 euros per month. In the transferable months of childcare leave, the childcare allowance is reduced to 324 euros so that Antanas’ earned amount and childcare allowance combined do not exceed the minimum monthly salary: 324 euros + 600 euros = 924 euros.
If this minimum amount were not established, the child care benefit would decrease more – to 250 euros. Then the amount of child care benefits and work income awarded to Antanas would not be higher than his average salary – 250 euros + 600 euros = 850 euros before taxes.
What is the maximum amount you can earn while receiving Childcare Benefit in transferable months
This is relevant for residents with high incomes who receive the maximum childcare allowance and wages. The average monthly salary, based on which the child care allowance was calculated, cannot exceed 5 average monthly salaries of the country valid for the previous quarter before the date of receipt of income or benefits.
Therefore, in the last quarter of this year, the amount of benefits and income received by people receiving the maximum child care allowance is compared with their average monthly salary, based on which the child care allowance was calculated, but not exceeding 10,918 euros.
The case of spruce. Egle (company manager, 36 years old). After the birth of her son, Eglė chose to receive child care allowance until the child is 18 months old. Eglė’s average working income, from which the childcare allowance is calculated, was 12,000 euros.
The child care allowance calculated for Eglei in the transferable months amounts to 2,620.32 euros – this is the maximum allowance that can be received, even if the person’s income was higher.
While working during childcare leave, Eglė, in order to receive the full childcare allowance, will be able to earn at most so that the sum of her childcare allowance and earned income does not exceed 10,918 euros, which is 5 average wages. Thus, although Eglė’s average insured income was higher – 12,000 euros – due to the set ceiling, the child care allowance and work income added together will not be able to exceed the amount of 10,918 euros set in the last quarter of 2024.
The childcare allowance for Egle would not be reduced if her monthly income did not exceed 8,297.68 euros (10,918 euros – 2,620.32 euros).
If you are self-employed, the benefit will not be reduced
Self-employed income does not reduce Child Care Benefit in both non-transferable and residual months. The self-employed can have income from self-employment and this does not reduce the childcare allowance.
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**Interview with Childcare Benefits Expert**
**Editor:** Welcome! Today, we’re discussing the intricate world of childcare benefits, particularly how they vary depending on parental leave choices. Joining us is Alex Johnson, a family policy expert. Alex, thank you for being here.
**Alex Johnson:** Thank you for having me!
**Editor:** To kick off, can you explain the difference between non-transferable and transferable months of child care leave?
**Alex Johnson:** Absolutely. Non-transferable months are a minimum of two months that each parent must use independently. This means one parent can’t transfer these months to the other. During these months, the payment is set at 78% of the recipient’s previous earnings. In contrast, transferable months can be shared, and the payment varies based on how long the parents choose to take it. For example, caregivers might receive 60% of their past earnings if they take leave until their child is 18 months.
**Editor:** That sounds quite structured. What happens if one parent doesn’t take their non-transferable months?
**Alex Johnson:** Excellent question. If one parent opts out of their non-transferable months, the total duration of the benefit gets shortened by that unused period. So, it’s crucial for each parent to actively plan for these months.
**Editor:** On the subject of income during these months, can parents earn additional income while receiving childcare benefits?
**Alex Johnson:** Yes, they can! However, there are stipulations. During non-transferable months, any income earned could reduce the benefits received. For instance, if a parent earns income that is counted toward social insurance, the childcare benefit will be the difference between what they would receive and that income. Yet, in transferable months, parents can earn additional income without affecting their benefit unless it exceeds their previous average salary.
**Editor:** Interesting! Can you give us an example of how this works for someone in a lower income bracket?
**Alex Johnson:** Certainly! Take the case of Antanas, who received the minimum childcare benefit and had an average income lower than the minimum monthly wage. In his situation, he can earn income without a reduction in his childcare benefit, as long as the total doesn’t exceed the minimum wage threshold. This ensures that families in lower income brackets are supported while enabling them to work.
**Editor:** That’s vital for economic stability. Now, regarding higher earners, is there a cap on what they can earn while receiving benefits?
**Alex Johnson:** Yes, there is. For high-income earners, the combined total of their childcare benefit and salary cannot exceed five times the average monthly salary previously calculated for the benefit. This regulation maintains a balance and prevents potential abuses of the system.
**Editor:** Thank you, Alex, for shedding light on such a complex but essential topic. It seems the structure in place for childcare benefits is designed to ensure both support for families and fairness within the labor market.
**Alex Johnson:** It certainly aims to do just that! Thank you for having me.
**Editor:** Thank you, Alex! And thank you to our audience for tuning in. Until next time, stay informed!
