Expense allowance
The purpose of the tax-free expense allowance is to enable Members of the Bundestag to cover expenses incurred in the fulfilment of their mandate. These expenses include money spent on the establishment and upkeep of one or more constituency offices, on travel within the Member’s constituency and on constituency business. The expense allowance also covers the Member’s expenditure on a second home at the seat of Parliament.
The expense allowance is an index-linked lump sum which is adjusted each year on the first of January. It currently amounts to €3,782 per month. Claims cannot be made for costs exceeding the amount of the allowance, nor can these be claimed as tax allowances, since Members of the Bundestag are not among the occupational groups that are entitled to deduct income-related expenses from their taxable earnings. The legislature opted for an expense allowance because it best matches the constitutionally enshrined principle of the independent mandate. In addition, a lump-sum allowance for all Members based on average expenditure is the fairest and cheapest solution, as a system based on submission of receipts would create a huge increase in administrative expenditure for the Bundestag. Moreover, granting a lump-sum allowance means that the budgetary cost can be calculated precisely from the outset on the basis of the number of Members.
