H e a d n o t e s

to the Order of the Second Senate of 10 November 1998

- 2 BvR 1057/91 -

- 2 BvR 1226/91-

- 2BvR 980/91 -

1. Article 6.1 of the Basic Law contains a special principle of equality. It prohibits placing marriage and the family on a worse footing in comparison with other partnerships and child-raising communities. This prohibition of discrimination opposes all differentiation imposing burdens linked to the existence of a marriage (Article 6.1 of the Basic Law) or to the exercise of parental rights in a marital child-raising community (Article 6.1 and 6.2 of the Basic Law).

2. Over and above the child’s existential material needs and the work-related care requirements, parents’ ability to pay is reduced in general terms by virtue of the care requirements. The care requirements must remain unburdened by income tax as a necessary element of the minimum family income (see Decisions of the Federal Constitutional Court (Entscheidungen des Bundesverfassungsgerichts – BVerfGE) 82, 60 (85); 87, 153 (169 et seq.)) without thereby making it possible to distinguish in what manner this requirement is met.

3. a) In the required revision of compensation for child-related expenses, the legislature must also allow for child-raising requirements regardless of civil status with regard to all parents who receive a child allowance or child benefit.b) Insofar as minimum family income is determined by personal data such as civil status, number of children and age, in accordance with the rule-of-law principle of predictability and calculability, this element must be worded such that the mere statement of these data makes it possible to apply the law.

FEDERAL CONSTITUTIONAL COURT

- 2 BvR 1057/91 -

- 2 BvR 1226/91 -

- 2 BvR 980/91 -

IN THE NAME OF THE PEOPLE

In the proceedings
on
the constitutional complaints

– 2 BvR 1057/91 –,

against

– 2 BvR 1226/91 –

and

against

– 2 BvR 980/91 –

the Federal Constitutional Court – Second Senate –

with the participation of Justices

President Limbach,

Kirchhof,

Winter,

Sommer,

Jentsch,

Hassemer,

Broß,

Osterloh

held on 10 November 1998:

1. § 33c subsections 1 to 4 of the Income Tax Act has been incompatible with Article 6.1 and 6.2 of the Basic Law since its introduction by virtue of Article 3 no. 19 of the 1985 Tax Correction Act (Steuerbereinigungsgesetz ) of 14 December 1984 (Federal Law Gazette I p. 1493), including all subsequent versions, insofar as it excludes parents unrestrictedly liable to income tax living in marital community from deduction of childcare costs resulting from gainful employment.

2. § 32.3 and 32.4 of the Income Tax Act has been incompatible with Article 6.1 and 6.2 of the Basic Law since the promulgation of the new version of the Income Tax Act of 24 January 1984 (Federal Law Gazette I p. 113), until the amendment by Article 1 no. 8 of the Act on Performance-Promoting Tax Reduction and on the Reduction of Family Burdens – 1986/1988 Tax Reduction Act (Gesetz zur leistungsfördernden Steuersenkung und zur Entlastung der Familie – Steuersenkungsgesetz 1986/1988 ) of 26 June 1985 (Federal Law Gazette I p. 1153), as well as § 32.7 of the Income Tax Act, since the promulgation of the new version of the Income Tax Act of 15 April 1986 (Federal Law Gazette I p. 441), including all subsequent versions, insofar as they exclude parents unrestrictedly liable to income tax living in marital community from the granting of the household allowance.

3. […]

4. […]

5. The legislature is obliged at the latest with effect as on 1 January 2000 to bring about a new regulation as to the provisions declared unconstitutional at 1. above, and at the latest with effect as on 1 January 2002 as to the provisions declared unconstitutional at 2. above. The previous provisions shall remain applicable until that time.

1. Insofar as no new regulation has yet entered into force with effect as on 1 January 2000, § 33c of the Income Tax Act shall continue to apply on the proviso that, from this time, childcare costs in the amount specified in § 33c.3 of the Income Tax Act shall be deducted from income within the meaning of § 2.4 of the Income Tax Act – regardless of gainful employment and of concrete expenditure – in ascertaining the taxable income of all parents entitled to child allowances or child benefit for the child.

6. […]

R e a s o n s:

A.

The constitutional complaints relate to the question of whether it is compatible with the Basic Law for parents living in marital community to be excluded from the right to deduct childcare costs resulting from gainful employment as extraordinary expenses from the base for assessment for income tax, as well as from the granting of a household allowance.

I.

1. With regard to the definition and preconditions of the possibilities to offset childcare costs against tax, § 33c of the Income Tax Act contains the following provision in the versions relevant in the instant case:

Childcare costs of single parents

(1) Expenditure on services for the care of a child who is unrestrictedly liable to income tax, has not yet reached the age of 16 at the beginning of the calendar year, and who belongs to the household of a single parent (§ 32.4 sentence 1), shall be deemed to be an extraordinary expense within the meaning of § 33 insofar as the expenditure arises from gainful employment. The expenditure can only be allowed insofar as it is necessary according to the circumstances and does not exceed a suitable amount. Expenditure for teaching, imparting special skills, sports and other leisure activities shall not be allowed.

(2) Unmarried persons and married persons who are permanently separated from their spouse shall be deemed to be single parents. Married persons whose spouse is not unrestrictedly liable to income tax shall also be deemed to be single parents.

(3) The amount to be deducted in accordance with subsection 1 may not exceed 4,000 Deutsche Mark per calendar year for single parents with one child (subsection 1 sentence 1). This amount shall increase by 2,000 Deutsche Mark for each additional child. The maximum amount or additional amount allowable for the child shall be reduced by one-twelfth for each full calendar month in which the preconditions of subsection 1 were not met. If the child belonged to the household of two single parents at the same time, each of them shall be entitled to half the relevant maximum amount or additional amount.

(4) At least a flat-rate amount of 480 Deutsche Mark per calendar year shall be deducted for expenditure within the meaning of subsection 1 for single parents with one child (subsection 1 sentence 1). The flat rate shall increase by 480 Deutsche Mark for each further child. Subsection 3 sentences 3 and 4 shall apply mutatis mutandis .

This provision, which was introduced on the basis of Article 3 no. 19 of the Tax Correction Act 1985 of 14 December 1984 (Federal Law Gazette I p. 1493), was expanded by Article 1 no. 13 of the 1986/1988 Tax Reduction Act of 26 June 1985 (Federal Law Gazette I p. 1153), and then read as follows:

(1) Expenditure on services for the care of a child who is unrestrictedly liable to income tax, who belongs to the household of a single parent, and who is to be allowed in accordance with § 32.1 to 3, shall be deemed to be an extraordinary expense within the meaning of § 33 insofar as the expenditure arises from

1. gainful employment, or

2. physical, mental or emotional disability, or

3. illness

of the taxpayer. In the case of no. 3, the illness must have existed within a consecutive period of at least three months. Sentence 2 shall not apply insofar as the case of illness arises directly after gainful employment. The expenditure can only be allowed insofar as it is necessary according to the circumstances and does not exceed a suitable amount. Expenditure for teaching, imparting special skills, sports and other leisure activities shall not be allowed.

(2) Unmarried persons and married persons who are permanently separated from their spouse shall be deemed to be single parents. Married persons whose spouse is not unrestrictedly liable to income tax shall also be deemed to be single parents.

(3) The amount to be deducted in accordance with subsection 1 may not exceed 4,000 Deutsche Mark per calendar year for single parents with one child (subsection 1 sentence 1). This amount shall increase by 2,000 Deutsche Mark for each additional child. The maximum amount or additional amount allowable for the child shall be reduced by one-twelfth for each full calendar month in which the preconditions of subsection 1 were not met. If the child belonged to the household of two single parents at the same time, each of them shall be entitled to half the relevant maximum amount or additional amount.

(4) At least a flat-rate amount of 480 Deutsche Mark per calendar year shall be deducted for expenditure within the meaning of subsection 1 for single parents with one child (subsection 1 sentence 1). The flat rate shall increase by 480 Deutsche Mark for each further child. Subsection 3 sentences 3 and 4 shall apply mutatis mutandis .

(5) With spouses who are both unrestrictedly liable to income tax are and not permanently separated, subsection 1, subsection 3 sentences 1 to 3 and subsection 4 shall apply mutatis mutandis insofar as the expenditure arose from

1. physical, mental or emotional disability, or

2. illness

of a spouse if the other spouse is in gainful employment or also ill or disabled.

[…]

2. To compensate for the disadvantages of single parent taxpayers with children, the Income Tax Act furthermore provides for a special allowance for increased housing- and household-related expenditure.

The provision contained in § 32.3 and 32.4 of the Income Tax Act applied in the version of the promulgation of the new version of the Income Tax Act of 24 January 1984 (Federal Law Gazette I p. 113) for the assessment years 1983 and 1984:

Subsection 3:

A taxpayer to whom the preconditions of § 32a.5 or 32a.6 do not apply, and who is not to be assessed separately for income tax in accordance with §§ 26 and 26a, shall be granted a household allowance of 4,212 Deutsche Mark insofar as he or she has at least one child during the assessment period.

Subsection 4:

Children within the meaning of subsection 3 shall be:

1. children who are first-degree relatives of the taxpayer,

2. foster children,

3. stepchildren who the taxpayer has taken into his or her household, as long as the marriage exists by means of which the stepchild relationship has been established.

A child of a parent couple unrestrictedly liable to income tax to whom the preconditions of § 26.1 sentence 1 do not apply shall be allocated to the parent in whose home his or her main residence was first registered in the calendar year. If the child was not registered in a home of a parent, or if his or her main residence was registered in a joint home of the parents, he or she shall be attributed to the mother; he or she shall be attributed to the father if the latter proves by a certification of the competent authority that the child has belonged to his household.

In the assessment years 1986 and 1987, § 32.7 of the Income Tax Act applied in the version of the promulgation of the new version of the Income Tax Act of 15 April 1986 (Federal Law Gazette I p. 441):

A household allowance of 4,536 Deutsche Mark shall be deducted from income in the case of a taxpayer who does not meet the preconditions of § 32a.5 or 32a.6, and who is not to be assessed separately for income tax in accordance with §§ 26 and 26a, insofar as he or she receives a child allowance. If the other parent is also unrestrictedly liable to income tax, the taxpayer shall receive the household allowance only if the child for whom a child allowance is deducted is to be attributed to him or her. A child of a parent couple unrestrictedly liable to income tax to whom the preconditions of § 26.1 sentence 1 do not apply shall be allocated to the parent in whose home his or her main residence was first registered in the calendar year. If the child was not in a home of a parent, or if his or her main residence was registered in a joint home of the parents, he or she shall be attributed to the mother; he or she shall be attributed to the father instead of to the mother if the father proves by certification of the competent authority that the child has belonged to his household.

II.

1. In the contentious assessment years 1983, 1984, 1986 and 1987, the complainants lived in a marital family community with their children, who were under 16 years of age. Both parents were gainfully employed for at least some of this period, and were assessed jointly for tax. The complainants applied for the expenditure incurred in these periods for the care of their children to be allowed in accordance with § 33c of the Income Tax Act in the respectively applicable version. These requests were rejected by the competent tax offices. The actions lodged against this were unsuccessful. The finance courts considered themselves prevented from including the complainants in the regulation on the deduction of childcare costs in accordance with § 33c of the Income Tax Act and in the regulation on the household allowance because the respective provisions exclusively entitled single parents with children. […]

2. The […] appeal on points of law lodged […] against this was rejected as unfounded by judgment of the Federal Finance Court of 15 March 1991. […]

[…]

3. […]

III.

With their constitutional complaints the complainants […] [i]ndirectly […] [also] object to § 33c of the Income Tax Act in the respectively applicable versions.

1. They complain of a violation of their fundamental rights under Article 3.1 in conjunction with Article 6.1 of the Basic Law. […] They argue that the legislature may not create unrealistic boundaries to tax allowance for necessary maintenance expenditure. […] Further, in tax allowance for necessary childcare expenditure, it may not favour single parents over parents living in marital community.[…]

[…]

Also, only granting the household allowance to unmarried parents was said to give rise to unconstitutional discrimination against spouses with children as against other parents.

2. […]

3. […]

IV.

The President of the Federal Finance Court submitted to the proceedings statements by two Senates. The Federal Minister of Finance made a statement for the Federal Government.

[…]

B.

The […] constitutional complaints are admissible and well-founded insofar as they oppose exclusion of the complainants from deduction of childcare costs and from a household allowance. In this scope, the impugned court rulings and the statutory provisions on which they are based in this respect are incompatible with Article 6.1 and 6.2 of the Basic Law.

[…]

I.

1. a) The care and upbringing of children is the natural right of and a duty primarily incumbent on the parents (Article 6.2 sentence 1 of the Basic Law). The parents perform this duty within the family, which is above all a child-raising community (see BVerfGE 80, 81 (90 et seq.)), but also an economic community (see BVerfGE 80, 81 (90); 82, 60 (87)). The parents owe to the children benefits in kind covering the children’s economic requirements, as well as care and upbringing meeting the child’s need for support, instruction and provision of practical and cultural experience. Article 6 of the Basic Law establishes a comprehensive parental responsibility for the development of the child enabling him or her to live a responsible life in this society (see BVerfGE 57, 170 (178); 80, 81 (91)).

b) The duty of bringing up their children (Article 6.2 sentence 1 of the Basic Law) affects the parents as a highly personal responsibility which however does not have to be performed by them exclusively in their own person. Article 6.1 of the Basic Law guarantees as a protective right the freedom to decide personally on the shape of marital and family co-habitation (see BVerfGE 61, 319 (347) with further references). For this reason, the state must respect the family community both in the immaterial-personal and in the material-economic sphere with regard to its respective independent, autonomous decisions (BVerfGE 61, 319 (347) with further references). Accordingly, parents may plan and realise their family life ideas as they see fit, and in particular may decide within their responsibility for bringing up their children whether and at what stage of development the child is to be taken care of largely by one parent alone, by both parents in alternation or by a third party. In particular, the parents determine within their responsibility, on proviso of Article 7 of the Basic Law, whether and to what degree they wish to commission others to exercise their mandate for bringing up their children (see BVerfGE 47, 46 (70)).

c) In accordance with Article 6.1 of the Basic Law, the family enjoys the special protection of the state. The state’s watchdog function (Article 6.2 sentence 2 of the Basic Law) however does not entitle the state to enforce on parents a specific manner of bringing up their children. The Basic Law leaves it to the parents to decide on the model for bringing up their children (see BVerfGE 24, 119 (143); 47, 46 (69-70)), to determine the manner in which the child is cared for, his or her opportunities for social contact or experience, and the content of his or her education. This primary responsibility of the parents for decision-making is based on the consideration that the interests of the child as a rule are best satisfied by the parents (see BVerfGE 72, 122 (139-140)).

2. a) Article 6.1 of the Basic Law also contains a special principle of equality. It prohibits placing marriage and the family on a worse footing in comparison with other partnerships and child-raising communities (prohibition of discrimination, see BVerfGE 76, 1 (72)). Article 6.1 of the Basic Law prohibits discrimination of spouses as against unmarried persons (see BVerfGE 28, 324 (347); 69, 188 (205-206)), of parents as against the childless (see BVerfGE 82, 60 (80); 87, 1 (37)) as well as of marital as against other child-raising communities (see BVerfGE 61, 319 (355)). This prohibition of discrimination opposes all differentiation imposing burdens linked to the existence of a marriage (Article 6.1 of the Basic Law) or to the exercise of parental rights in a marital child-raising community (Article 6.1 and 6.2 of the Basic Law).

b) Discrimination also exists if spouses or parents are excluded from tax relief because of their marriage or family and the manner in which same is arranged (see BVerfGE 12, 151 (167)). The principle of fiscal equality requires at least for direct taxes a burden that is related to financial ability to pay (see BVerfGE 43, 1 (8 et seq.); 61, 319 (343); 66, 214 (222); 82, 60 (86); 89, 346 (352)). The Federal Constitutional Court makes clear the constitutional principle of income taxation by ability to pay in the duty incumbent on the legislature enacting tax laws to exempt from taxation that non-disposable income which is necessary for the minimum family income.

3. a) The constitutional precept follows from Article 1.1 of the Basic Law in conjunction with the principle of the social welfare state contained in Article 20.1 of the Basic Law that the state must exempt the income of the taxpayer from tax insofar as it constitutes a minimum precondition of dignified existence – “minimum income” – (see BVerfGE 82, 60 (85)). When it comes to the taxation of a family, this applies – Article 6.1 of the Basic Law also being allowed for – to the minimum income of all family members (see BVerfGE 82, 60 (85); 87, 153 (169)). In judging fiscal ability to pay, the state must hence leave out of consideration as taxable income the taxpayer’s maintenance expenditure for children insofar as this is necessary to guarantee the minimum income of the children (see BVerfGE 82, 60 (87)). This minimum income is measured by the requirement, not by actual expenditure (see BVerfGE 82, 60 (91); 87, 153 (170)). Over and above this, the court stresses that child maintenance is not to be placed on an equal legal footing with the private meeting of needs, which is why the legislature enacting tax law may not encroach on the indispensable means for the care and upbringing of children such as on financial means used to meet any other needs (see BVerfGE 82, 60 (87); 84, 348 (359-360); 87, 1 (38); 87, 153 (170)).

Over and above the child’s existential material needs and the work-related care requirements, parents’ ability to pay is hence reduced in general terms by virtue of the care requirements. These care requirements are to be fiscally subsidised as an element of child-related minimum income. Because of the care obligations, which affect their work or their ability to pay, taxpayers with children are able to pay less tax in comparison with childless taxpayers. If this requirement, based on parents’ duty to bring up, and care for, their children, were not to be allowed in assessing income tax, the parents would be placed at a disadvantage as against childless taxpayers whose ability to pay is not reduced by meeting parental obligations. The principle of horizontal equality (see BVerfGE 82, 60 (89-90)) would be violated.

b) As a necessary element of minimum family income (see BVerfGE 82, 60 (85); 87, 153 (169 et seq.)), the care requirements must remain exempt from income tax without it being permissible to distinguish how this requirement is met. The Income Tax Act has always to subsidise the care requirements of a child, whether the parents consider it to be correct in pedagogical terms to care for the child personally, to avail themselves of third-party care for the child for a time, for instance at a kindergarten, or if both parents opt for gainful employment and hence avail themselves of third-party care.

4. In addition to the duty to recognise the decisions made by parents in the service of the child’s best interests and not to impose on them any disadvantageous legal consequences, the task of the state to actually facilitate and support childcare in the form respectively selected by the parents also emerges from the duty of protection contained in Article 6.1 of the Basic Law. Childcare is a service also in the interest of the community and which demands to be recognised by the community (see BVerfGE 87, 1 (38-39); 88, 203 (258-259)). Accordingly, the state must ensure that parents are equally able to forgo their own gainful employment, in part and temporarily, in favour of personally taking care of their children, as well as to reconcile work within the family and gainful employment. The state must also create a situation in which the exercise of bringing up children within the family does not lead to disadvantages at work, in which it is possible to return to work, as well as to reconcile the bringing up of children and gainful employment for both parents, including professional advancement during and after times of bringing up children, and in which the services provided by institutional childcare are improved (see BVerfGE 88, 203 (260)).

II.

1. a) In accordance with this standard, the provisions of § 33c.1 to 33c.4 of the Income Tax Act on the fiscal accommodation of childcare costs resulting from gainful employment violate the complainants’ right under Article 6.1 and 6.2 of the Basic Law. They place the marital child-raising community of working parents at a disa-^^dvantage when compared to other child-raising communities, and hence run counter to the prohibition of discrimination contained in Article 6.1 and 6.2 of the Basic Law.

§ 33c of the Income Tax Act permits “single parent” taxpayers (§ 33c.2 of the Income Tax Act) to deduct childcare costs resulting from gainful employment. Here, § 33c.2 of the Income Tax Act defines as single parents those who are unmarried, or spouses who are married but permanently separated, as well as married persons whose spouse is not unrestrictedly liable to income tax. Unmarried persons are also “single parents” if they live in a non-marital community. The distinction of § 33c.2 of the Income Tax Act between “single parents” able to deduct and married persons not able to do so can hence not be traced back to a different ability to pay taxes on the part of the two groups. The determination of the party entitled to deduct from tax goes beyond the group of single parents exclusively relying on themselves, and also includes in the fiscal exemption co-habiting and unmarried parents paying maintenance to one another. Apart from cases falling under § 33c.5 of the Income Tax Act, it is only the care costs incurred by parents who are unrestrictedly liable to income tax, and who live in a marital community, that are subject to income tax.

[…]

b) Moreover, care costs – beyond the flat rate – can only be claimed in accordance with § 33c.1 sentence 2 (later: § 33c.1 sentence 4) of the Income Tax Act insofar as they are necessary according to the circumstances. This element is alleged not to apply if the taxpayer co-habits with the other parent of the child and the other parent is not in gainful employment … What is more, a need for the care costs is denied if and to the extent that the child cared for or the single parent receive remuneration with which childcare costs are to be paid … Also with this interpretation, single parent taxpayers within the meaning of § 33c.2 of the Income Tax Act may however also deduct childcare costs from the base for assessment for income tax if they are not forced to take up gainful employment because they receive sufficient payments from the other parent for their own maintenance. The childcare costs of such “single parents” are however not more or less necessary than those of parents living in a marital community.

Rather, according to the area protected by Article 6.2 of the Basic Law, it is constitutionally necessary to allow the care expenditure for children with all parents in terms of fiscal law. It arises regardless of whether and if so in what timeframe childcare is provided by third parties. This already finds expression in the statutory provisions on child-raising allowance, on child-raising leave and on the allowance of child-raising periods under pension law. Care expenditure is to be included in the child’s minimum income in the same way as material expenditure. This concept also forms the basis for the provisions contained in §§ 1570 and 1615l of the Civil Code (Bürgerliches Gesetzbuch – BGB). These provisions afford maintenance to the caring parent with which the latter is not supposed to be able to dispense […].

The restriction of the deductibility of childcare costs (§ 33c.1 of the Income Tax Act) and the imposition of a flat rate on these costs (§ 33c.4 of the Income Tax Act) to single parents within the meaning of § 33c.2 of the Income Tax Act hence violates the marital child-raising community – unrestrictedly liable to income tax – in terms of its claim to be treated equally under Article 6.1 and 6.2 of the Basic Law. The law denies deduction solely because of the element of marriage, and in this respect violates the prohibition of discrimination contained in Article 6.1 of the Basic Law.

c. […]

d) Nothing has changed as to the unconstitutionality of the impugned legal situation by virtue of the introduction of the deduction amount in accordance with § 10.1 no. 8 of the Income Tax Act. In accordance with this provision, a marital child-raising community could claim expenditure of up to DM 12,000 per calendar year for household employment as special expenditure if there were two children who had not yet reached the age of ten at the beginning of the calendar year. Single parents within the meaning of § 33c.2 of the Income Tax Act could already make use of this deductibility if they only had one child under ten years of age. In this way, this provision too placed marital child-raising communities with one child at a disadvantage in comparison with other child-raising communities with one child.

This differentiation has been abolished in the version of § 10.1 no. 8 of the Income Tax Act applicable since 28 December 1996. By contrast, this deductibility is now equally open to parents liable to tax and to childless taxpayers. It is therefore for this reason not to be regarded as compensation for childcare costs.

2. Also the provision contained in § 32.3 and 32.4 of the 1984 Income Tax Act (later: § 32.7 of the Income Tax Act) regarding the deduction of a household allowance violates Article 6.1 and 6.2 of the Basic Law because it places marital communities at a disadvantage in comparison with other child-raising communities. The legislature grants a household allowance to non-marital child-raising communities, even if each parent has a right to a basic allowance, whilst the household allowance is in principle denied to spouses.

The household allowance is to compensate for the increased expenditure of single parent taxpayers who are forced to expand their home and their household because of their children. Single parents with children are to receive an additional allowance similar to a further basic allowance, and hence are to be taxed in the proportional area of income tax in an identical manner to spouses who are assessed jointly (see Bundestag printed paper (Bundestagsdrucksache – BTDrucks) 7/1470, p. 283 re § 79 and § 80 of the draft, as well as p. 222). The household allowance is linked solely to the household of the single parent taxpayer, but does not increase with the number of children.

The second basic allowance for unmarried parents is not compatible with Article 6.1 and 6.2 of the Basic Law because it is withheld from marital child-raising communities, but is granted to unmarried parents even if they form a child-raising community and both are liable to tax. In this case, the respective income is already fiscally subsidised in the amount of the basic allowance (see § 32a.1 sentence 2 no. 1 of the Income Tax Act). The household allowance, as a “third basic allowance”, favours such child-raising communities over marital child-raising communities.

This different treatment can also not be traced in this case to a greater child-related increase in household expenditure of the deducting non-marital child-raising community as against a married child-raising community. In principle, the addition of a child increases parents’ housekeeping expenditure. This expenditure is the same for each joint household of the parents. If the expenditure to establish a household was also related to marriage with married parents, whereas with single parents by contrast it was at least partly child-related, this one-off requirement is neither the subject nor the reason for the provision contained in § 32.7 (earlier: § 32.3 and 32.4) of the Income Tax Act. The fiscally relevant general additional household requirement recurring in each assessment year, by contrast, which is permitted for deduction here, is the same with married and unmarried parents, so that no different fiscal accommodation is justified.

If a child does not live with his or her parents, but in a third place, it is also not evident why additional child-related expenditure nevertheless arising is not incurred in the same manner in a marital child-raising community. The objection that accommodation of a child in a boarding school, or in medical or other care facilities is avoidable in a marital community of the parents is not compatible with the parents’ right to freely shape family co-habitation emerging from Article 6.1 and 6.2 of the Basic Law.

3. Also the possibility of joint assessment (§§ 26 and 26b of the Income Tax Act) which is available to the parents living in a marital community does not reduce their discrimination by virtue of the impugned provision. The joint assessment can be claimed by all spouses, regardless of whether they have children entitled to maintenance or not; the joint assessment is conditional on a marriage, but not on a child-related requirement. Taking into account the legal consequences of §§ 26 and 26b of the Income Tax Act to compensate for the less advantageous fiscal position hence can already not be considered because it would place unmarried parents at a disadvantage as against spouses without children having a maintenance claim. Moreover, the relief provided by joint assessment depends on the amount of the respective income of both spouses, and on the progression rate. Joint assessment has virtually no impact if both spouses are in gainful employment and have similar income amounts.

C.

In addition to this discrimination of marital as against other child-raising communities, which is not compatible with Article 6.1 and 6.2 of the Basic Law, the fiscal allowance of parents’ reduced ability to pay is as a whole less than what is constitutionally required in accordance with Article 6.1 and 6.2 of the Basic Law, and places parents at a disadvantage who are unable to claim the tax relief under § 33c and § 32.7 of the Income Tax Act, including in comparison with childless taxpayers.

I.

Child allowances and child benefit cover in the main only the child’s minimum material income. The care requirements of each child are to date only allowed – in violation of equality (see above B.II.1.) – if they arose with single parents within the meaning of § 33c.2 of the Income Tax Act in connection with gainful employment, with illness or disability, or if a parent living in a marital community is ill or disabled and the other is either in gainful employment or is also ill or disabled (§ 33c.1 to 3 and 33c.5 of the Income Tax Act). These provisions do not allow for the fact that the child’s care requirements exist regardless of the illness, disability or gainful employment of the parents, and also do not depend on the nature of the provision of the care services.

In the new version of subsidy of the care requirements under the law on income tax, the legislature will hence have to accommodate the same care-related reduction in the fiscal ability to pay with all parents – regardless of the nature of the care and of concrete expenditure – and accordingly increase the child allowance or the child benefit.

II.

In addition to the care requirements (§ 33c of the Income Tax Act), the Income Tax Act also neglects the expenditure of the parents who facilitate the child’s personal development and his or her development to become independent and take responsibility (child-raising requirements). It allows in the “household allowance” – incorrectly designated and imposing restrictions constituting a violation of equality (see above B.II.2.) – a child-related additional requirement covering this requirement of the child in the mathematical result. It is not considered here, however, that all parents must meet this additional requirement of the child. In the necessary review of compensation for child-related expenses, the legislature must hence (see … [BVerfGE 99, 246]) take account of this child-raising requirement of the child regardless of civil status for all parents who receive a child allowance or child benefit.

Also this child-raising requirement is not sufficiently complied with by child allowance and child benefit. Whilst the maintenance necessary for the granting of social assistance, and hence relevant for determining the general fiscal minimum income, also includes personal needs of daily life, in addition to food, accommodation, clothes, physical hygiene, household goods and heating (§ 12.1 sentence 1 and § 22.1 of the Federal Social Assistance Act (Bundessozialhilfegesetz – BSHG) in conjunction with § 1.1 sentence 1 of the Ordinance on the Implementation of § 22 of the Federal Social Assistance Act (Verordnung zur Durchführung des § 22 des Bundessozialhilfegesetzes – Regelsatzverordnung ) of 20 July 1962 (Federal Law Gazette I p. 515), most recently amended by Article 11 of the Act Reforming the Law on Social Assistance (Gesetz zur Reform des Sozialhilferechts ) of 23 July 1996 (Federal Law Gazette I p. 1088)). This minimum also includes to a justifiable degree social relationships and participation in cultural life (see § 12.1 sentence 2 of the Federal Social Assistance Act). For children and juveniles, the necessary maintenance also includes special requirements, above all those necessitated by their development and growth (see § 12.2 of the Federal Social Assistance Act in the version of the Act Reforming the Law on Social Assistance of 23 July 1996 (Federal Law Gazette I p. 1088) as well as the reasoning of the draft Bill on this (Bundestag printed paper 13/3904, p. 44)).

In quantifying this requirement, however, the general costs incurred by parents in order to facilitate the child’s development enabling him or her to live responsibly in this society are not yet sufficiently allowed (see BVerfGE 57, 170 (178); 80, 81 (91)). This includes today for instance – in contradistinction to § 33c.1 sentence 5 of the Income Tax Act – membership of associations as well as other forms of social contact with other children or juveniles outside the domestic sphere, learning and trying out modern communication technologies, access to culture and language, responsible use of free time and the planning of holidays.

To assess this child-raising requirement of children to be met by all parents, the previous household allowance provides a quantitative orientation which is however to be graduated in line with the number of children.

III.

[…]

D. – I.

The unconstitutionality of the provisions on the deduction of childcare costs resulting from gainful employment, and on the household allowance (§ 32.3 and 32.4 of the Income Tax Act 1984; later: § 32.7 of the Income Tax Act), on which the impugned court rulings were based (§ 33c.1 to 4 of the Income Tax Act) covers these provisions in the respective versions.

The unconstitutional provisions on which the rulings impugned with the constitutional complaints are based are only to be declared incompatible with the Basic Law (see § 95.3 sentences 2 and 3, § 79 of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz – BVerfGG)). A declaration of nullity would make the constitutionally required allowance of care expenditure and of a household allowance entirely cease to apply, and would hence create a legal situation which would be even less compatible with Article 6.1 and 6.2 of the Basic Law than the provisions of § 33c.1 to 4 and of § 32.3 and 32.4 of the 1984 Income Tax Act (later: § 32.7 of the Income Tax Act). The unconstitutional provisions hence remain temporarily applicable.

1. The provisions of § 33c of the Income Tax Act which have been declared unconstitutional continue to apply until 31 December 1999. […] In the framework of this new regulation, the legislature must expand allowance of this care requirement to all parents, regardless of how they provide for this requirement of their children.

2. The provision on the household allowance remains applicable until 31 December 2001. Until this time, the legislature must correct the discrimination of the marital child-raising community by excluding the deduction of a household allowance. […]

II.

[…]

III.

[…]

In view of the constitutionally required gradual adjustment of the applicable law, the complainants in the proceedings 2 BvR 1057/91, 2 BvR 1226/91 and 2 BvR 980/91 have a right to the success of their constitutional complaints also having an effect for them, for the respectively pending assessment periods, such that income tax relief should correspond to the constitutional requirements. The Federal Finance Court, to which the proceedings are referred, must hence examine whether by expanding application of the impugned provisions of the Income Tax Act, or by corresponding application of the legal concept of §§ 163 and 227 of the Tax Code, […] it can be ensured that the relief envisioned in § 33c, § 32.3 and 32.4 of the 1984 Income Tax Act and § 32.7 of the 1986 Income Tax Act benefits the complainants in the concrete cases. Otherwise, the legislature would have to hand down a retroactive regulation in this respect.

E.

[…]

F.

This decision was passed with 7:1 votes re no. 5 of the ruling, in other respects unanimously as concerns the result.