How are multiple training courses assessed as a single measure?

Multiple training phases as a single measure

Many children complete several training phases, e.g. apprenticeship and university. For child benefit entitlement, it was previously decisive whether it was a first or second training. While the first training offers limited tax advantages, expenses for a second training are fully deductible – but only with a maximum of 20 working hours per week.

Multi-phase vocational training: New legal situation

According to the case law of the BFH (judgment of 15.04.2015, V R 27/14), further training can still count as first training if:

• there is a close temporal and subject-related connection to the first training and
• the career goal has not yet been achieved.

This situation is referred to as multi-phase vocational training.

Advantages of multi-phase vocational training

For parents:
The entitlement to child benefit remains – regardless of the child's employment.

For children:
The costs for further training can be claimed as expenses without limit once a first training has been completed.

Expenses: Distinction remains

For the deduction of expenses, only training that:

• lasts at least 12 months full-time,
• is completed with an exam.

From the second training onwards, all costs are fully deductible; losses can be carried forward.

Example: Multi-phase training

Hans completes an apprenticeship as an electrician in February 2012 and attends a technical college from August to prepare for a degree. Although he works full-time in the meantime, the BFH recognises a close temporal and subject-related connection – the entire training is considered a single measure. Result: Child benefit entitlement remains.

BFH rulings: No child benefit for part-time training alongside a job

The BFH has clarified in several rulings:
Child benefit is forfeited if further training is alongside a full-time job and the job takes precedence. Typical cases:

• Part-time study with a 40-hour week
• Evening master school, full-time employment during the day
• Training as a business administrator alongside a full-time job

Even if the decisions were partially referred back to lower courts, the BFH indicates a clear line: Full-time job = no child benefit if training is alongside.

Examination scheme: When is there a single training measure?

1. Subject-related connection: Is the second training based on the first?
   → If no: Only entitlement with max. 20 working hours per week.
2. Temporal connection:
   Does the second training follow shortly after?
   → If no: Also observe max. 20-hour rule.
   Note: A few months' transition is unproblematic (BFH, III R 32/17).
3. Employment after the first qualification:
   Is the qualification already being used professionally?
   → If yes: No child benefit, as the job takes precedence.
   → If no: Child benefit entitlement possible if training predominates.
4. Overall assessment:
   Does the training objectively take precedence or is it only alongside the job?
   - With part-time job with training focus → Child benefit entitlement more likely.
   - With full-time job with evening courses → Child benefit entitlement more likely to be denied.
   - Borderline case: Slight exceeding of the 20-hour limit may be harmless if the training clearly takes precedence.

Note: Child allowance

The same criteria apply for the entitlement to the child allowance in income tax. 

Conclusion: Whether multiple training phases are considered a single vocational training depends on the subject-related and temporal connection as well as the role of any employment. Child benefit is only available if the training takes precedence – not the employment.