Parents of children born in Germany in 2007 will be entitled to a cash subsidy under new measures introduced in January designed to address its falling birth rate.

Germany currently has one of the lowest birth rates in Europe with an average of 1.3 children per woman: much lower than the replacement level of 2.1 births.

Under the new scheme one parent (mother or father) will be entitled to receive up to 1,800 Euros per month for a maximum period of 12 months whilst the other parent will be entitled to two months’ paid leave – an attempt to encourage fathers in particular to take parental leave. Only those parents who cease working altogether or who work less than 30 hours per week will be eligible to receive the maximum payment under the 12-month scheme. However, all parents will be entitled to at least 300 Euros per month, even if they were not working prior to the birth of their child. Single parents who have sole custody will be eligible for benefi ts for up to 14 months.

The new scheme only applies to babies born on or after 1 January 2007. This reportedly resulted in some German mothers going to extreme lengths to delay childbirth so as not to miss out on the generous cash subsidy. A number of other Member States have also taken steps to address the problem of declining domestic birth rates. Last year France introduced measures to encourage women to have more babies, including the payment of a monthly allowance for families with three children.