Intentional co-parenting and financial arrangements
Co-parenting means that an “equal” division of care has been agreed upon between parents (i.e., where the children are present with one legal parent for an average of 3 days). In this situation, children belong to two households (the household of one legal parent and the household of the other legal parent). If children belong to the household, there may be entitlement to allowances or tax credits. This is also in an intentional co-parenting/multi-parenting arrangement.
In this blog we talk about the legal parents, now that current legislation unfortunately does not allow for more than two legal parents. The parent who is not a legal parent unfortunately cannot claim these financial arrangements.
The legal parent with whom the child is registered is usually entitled to tax credits and or allowances. A child can only be registered at one address. So which parent is entitled to the levies and benefits?
Child benefit (Social Insurance Bank)
Child benefit is in principle paid to the legal parent applying for child benefit. However, in the case of intentional co-parenting/multi-parenting, child benefit can be paid divided between both legal parents upon request. The child support of each of the children can then be paid divided while the children are still registered with one legal parent.
Income-related combination discount (Tax Office)
Both legal parents are entitled to income-related combination discount if the conditions of co-parenting are met. This means that the children must live with you for more than 3 days (not counting vacations). When filing the (preliminary) income tax return, the tax credit can be claimed. Income-related combination you receive for children up to 12 years of age.
Childcare allowance (Belastingdienst)
In case of intentional co-parenting, both legal parents can apply for childcare allowance. Each can apply for this for their own share of the costs. If there is (still) a joint contract, then the payment of the costs determines the part for which the legal parents can apply for the allowance. A legal co-parent who wants to apply for childcare allowance for the child who is not registered with him or her but with the other legal parent can request this by letter to the Tax Office.
If either legal parent has a much lower income than the other, it may be financially beneficial to have the legal parent with the lowest income apply for the child care benefit. Note: The income of the legal parent’s partner is included in the income test, however.
Child budget (KGB) (Belastingdienst).
Only the legal parent who has applied for child benefit is entitled to Child Budget (KGB). The income of the legal parent where the children are registered determines the amount of the KGB. Even if the child benefit is divided between both legal parents on request. Thus, if there is one child, only the child benefit applicant is eligible for the KGB. With multiple children, both legal parents are entitled to KGB if the children are “divided” between the addresses. However, you can choose to transfer the KGB to a joint child account.
The KGB is income dependent and depends on the number of children. Are you a single parent? Then you can also claim additional KGB, regardless of the number of minor children.
Note: If your assets (Box 3) are above a limit to be determined annually, then you are not entitled to KGB.
It is a good idea to take these arrangements into account when drawing up the intentional co-parenting plan. Who applies for these allowances? Is it used in the own household or transferred to the joint account?
Do you have questions about this? Then feel free to contact Anouk Hansma or Janneke Mulder.