Working parents could get €200 more per child, non-working €100

Finance minister unveiled the first part of what he calls the tax revolution.

Finance Minister Igor Matovič presenting his plan: "Tax revolution fulfils dreams."Finance Minister Igor Matovič presenting his plan: "Tax revolution fulfils dreams." (Source: TASR)

The state plans to pour more cash on families with children, Finance Minister Igor Matovič (OĽaNO) said on Sunday.

Financial support for families with children is the first announced part of the tax levy reform, which Matovič has called a tax revolution. Originally, the minister announced the reform in spring 2021, but the public didn't learn the details of the reform until mid-November. Matovič scheduled three press conferences to unveil his tax reform; each day is dedicated to a different part of the reform.

Money for children's leisure time

He proposed to increase the child allowance from €25.50 per month to €30 for every child younger than 18 years and €50 per month for a child older than 18 if they are still at school until they finish their full-time university education.

Another change should be an increase of the allowance for leisure activities and extra school lessons from €12 to €70 per child. This does not mean that families will receive €12 in cash at the moment; it is merely what the ministry's analysts calculated as the state expenditure for this purpose.

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“Hundreds of thousands of children do not attend any free time activities,” the minister said, as quoted by the TASR newswire. He attributes this mainly to financial reasons.

The allowance would not be given to parents in cash, but rather on a card or through an electronic account where a child could use it for a given purpose, the minister explained. He said that besides clubs and extra lessons, a child could use it to pay for tickets to the theatre, galleries or the gym, for example.

Tax bonus

The tax bonus should also be increased from €23-46 to €70 per child under 18. This applies only to parents who are working.

The change will also take into consideration how much the child's parents earn a year.

“We propose that a parent starts to earn a tax bonus in a double tax rate that is 38 percent of the gross salary of a parent from the first euro,” the minister said, adding that he believes this will motivate parents who are not working to start working.

Bonus for recreation

The recreational bonus for children should be increased from €6 to €30. These benefits are dependent on whether the parents of a child are working or not. The money cannot be obtained in cash and must be spent in Slovakia to support domestic tourism.

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In a family where at least one parent works, all of these measures amount to €200 per child per month. Families in which neither parent works get €100 per month per child.

How will it be financed?

The proposed measures should cost a total of €1.2 billion.

Matovič plans to introduce a "millionaire tax" of 0.1 percent per year on assets over one million euros to cover these costs. The new tax will, however, require a property declaration of everyone who has assets worth more than one million euros.

Other measures financing the reform included, for example, a two-percent reduction in public administration staff and a reduction in armaments spending.

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