Staff members with dependent children receive a household allowance, a dependent child allowance and, under certain conditions, an education allowance. For adult children between the ages of 18 and 26, the continued payment of these allowances and further tax reductions are subject to the adult child receiving educational or vocational training. Moreover, courses must last three months (‘regular full-time attendance’) or more and lead to a diploma or certificate officially recognised by the public authorities. 

So much, so simple. But not in reality 

There are two additional aspects, which make things a bit messy. First of all, and still quite innocuously, JSIS coverage is connected to receiving the dependent child allowance. Or to put it more bluntly, if your adult child is no longer dependent on you, JSIS will no longer provide cover. So, an adult child doing compulsory military service or similar will generate no dependent child allowance during that period and so have no JSIS cover while an adult child under the age of 26 who gets married will have to declare a change in circumstances, have entitlements reevaluated and may or may not be covered by JSIS in the future. 

But this immediately raises another question: when does an adult child under the age of 26 count as dependent? In particular, how much is that adult child allowed to earn or receive – for instance through employment, a scholarship or stipend – to be still regarded as dependent? According to Conclusion 223-04, for adults aged between 18 and 26 who are still at school or receiving vocational training, the ceiling is 40% of the basic salary of an official in the first step of grade AST 1. Applying for instance the current correction coefficient for Germany, the ceiling is €1473.11 per month (or €17 677.32 per year).  

The calculation: where the line is drawn 

Importantly though, the potentially-dependent-adult-child earnings to be taken into account for the PMO are the sums that those individuals are paid after deduction of social security contributions, but before deduction of tax [1]. Again, in plain English: if the earnings are above the threshold, then any tax payments deducted from these earning will not bring them below the threshold. 

On the contrary, contributions to a pension scheme, to unemployment or to health insurance do lead to a reduction of the relevant earnings of the adult child. If large enough, these social security contributions may therefore bring the earnings below the threshold and thereby trigger the payment to the parents of the above benefits. 

But since the aforementioned ceiling is higher that the tax-free allowance for personal income in Germany [2], a young adult might earn or receive the maximum permitted by the JSIS while having earnings beyond the individual tax-free allowance and so having to pay tax. Consequently, that person may have less in the pocket after paying taxes than someone receiving a tax-free scholarship below the ceiling. Worse still, a person with a taxable income above the ceiling may have net earnings lower than someone with tax-free earnings below the ceiling while not being entitled to the dependent child allowance and JSIS cover. 

 What you need to look at 

That bring us to the first piece of advice: Every colleague with a dependent adult child having any sort of income while still being in full-time education and unmarried, should carefully check the relevant threshold and verify 1) whether the earnings are potentially above that threshold and 2) how social-security contributions might affect the picture.[3] 

Second piece of advice: Do not expect the PMO to explain this to you, nor to enquire how the situation is in the country where your adult child is educated. Generation2004 has seen a case where the above benefits were first granted, then after 2.5 years retroactively cut from one day to another, triggering a need to repay [4] and the withdrawal of JSIS cover. It was only because Generation2004 intervened that a deferral was granted during which the affected colleague had the time to prove the need and cost for health insurance for the adult child. Thereafter all rights were reinstated with no lessons learned or acknowledgement of any part of the system needing modification to avoid repetition. 

If you think this is all that there is, now comes the really tricky part: as already mentioned, receipt of the dependent child allowance is a prerequisite for JSIS cover. If an adult child’s scholarship (‘earnings’, but not in the traditional sense) are (even only just) above the PMO ceiling, they are considered to be no longer dependent and so full JSIS cover is lost. Why is this a problem? Well, a scholarship in Germany includes no health insurance. So, for that just-over-the-threshold and not-really-independent adult child, unless there is free healthcare in the Member State concerned, it is highly advisable, if not compulsory, to take out health insurance.  

Beware of falling between the lines 

This may lead to the following, rather absurd situation. Just imagine that the earnings of the adult child are €1 500 month after deduction of social security contributions, but before deduction of tax. Given the above threshold, the household, dependent child and education allowances would be lost and so would JSIS coverage. If now the adult child insures him/herself and pays for instance 14% of the earnings (the current statutory rate in Germany), then the earnings net of social security contributions would drop to €1 290. And Bingo: allowance entitlements are restored, together with JSIS membership.  

But then the German health insurance is no longer necessary, and nothing needs to be paid. Unfortunately, as soon as contributions are no longer paid and the income exceeds again the threshold, there are no more allowances and of course no coverage by the JSIS. 

Which brings us back to square one … 

Alternatively, the national health insurance remains the primary provider as you cannot be insured twice for the same thing [5]. But by paying for Member State cover, full JSIS cover is then downgraded to top-up cover. In the end, you may pay more and be worse off than with JSIS cover alone. 

As always, we would love to hear from you. Please do not hesitate to get in touch with us or leave a comment below. 

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Notes: 

[1] Why this is so, is not quite clear. After all, whether an adult child is dependent, should only be determined by the amount of money actually arriving in his or her pocket (net salary). While we acknowledge that the line has to be drawn somewhere, if taxes are not taken into account, then an adult child with less money in the wallet could cease to be dependent compared to an adult  child with more just because the former has to pay taxes on an earned salary while the latter doesn’t (such as someone with a German (tax-free) scholarship). Also, the unequal treatment of taxes and social security contributions doesn’t make much sense. After all, it could be argued that social security contributions entitle the adult child to some individual future benefits, while taxes do not. This is a good example for a set of rules which, while being quite complex, appear to miss the point they originally have been made for. 

[2] The tax-free allowance (Grundfreibetrag) for personal income is €12 096 in 2025.  

[3] PMO appears to take the view that only compulsory contributions (so the payment of additional voluntary pension contributions may not be accepted, for example) can be taken into account, but the aforementioned Conclusion 223-04 does not require this to be the case. 

[4] Recovery of overpayments, Article 85, staff regulations.  

[5] JSIS is clear on this topic: only top-up coverage is offered.