Monday , March 1 2021

Change in income limits: Will you receive more or less child allowance?

As of February 1, annual income limits on public fund entitlements, such as maternity aid, state grants, wage reductions, and light meal allowances, will be changed. Thus, at the Ministry of Labor, Family, Social Affairs and Equal Opportunities (MDDSZ), they respond to the invitation of the Association of Free Trade Unions of Slovenia (ZSSS) to amend the law on the exercise of public funds rights, which would removal of the effects of the increase in the minimum wage.

"Minister Ksenija Klampfer issued a decree on the harmonization of annual income limits for annual entitlements for 2019 ", The Ministry of Foreign Affairs reported today, adding that as of February 1, they will harmonize the income limits for individual rights by 1.4 percent. "The income limits are thus harmonized with the right to child allowance, state grants, reduced kindergarten payment and the right to a student allowance for students"they wrote the MDDSZ.

This means, for example, that a family that currently receives a monthly average income per person of 310 euros is currently classified in the 3rd income bracket and, as a result of raising the income limit, will now be classified in the 2nd income class and, consequently, greater family allowance.

The disparities increase proportionally to the highest income bracket in which, according to the new ones, they will have average incomes per person from 856 to 1034 euros (from 844 to 1019 euros).

Do not send new requests because "raising yield limits is not a statutory change"

"In this regard, we note that this is only taken into account when a new application for child allowance or a possible change is made between receipt of the child allowance, but not only during eligibility for the child's benefit, as increasing the income limits is not a statutory change can issue a new decision " added to MDDSZ.

The Ministry of Finance is still in the process of amending the law

At the same time, the ZSSS also cautioned the Ministry of Finance that the scale for assessing income tax and personal relief remains unchanged for the third consecutive year, which "to increase gross salary increases by increasing gross wages, thereby increasing gross salary in the budget rather than in the net salaries of employees".

The ministry is calling for the amendment of the Income Tax Law and the harmonization of the scale for assessing income tax and relief for the years 2019 and 2020 in order to achieve the purpose and objectives of the amendment to the Minimum Wage Law. Without changing the Income Tax Law and the scale for assessing income tax and personal relief, the net salary of employees receiving a minimum wage will be lower, which is basically not the purpose of this law and the legislature.

Minister of Finance Andrej Bertoncelj already announced a week ago that the proposed tax optimization will be prepared and submitted within a month. Nine measures are foreseen, which will also be presented at the Economic and Social Council. He said they would also take into account the ZSSS proposal, "to the extent that public finances will allow this".

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