Priority entitlement to child benefit

The parties involved are in dispute about the entitlement to child benefit for a foster child in the month of December 2020 following its birth and about the child bonus for 2020.
On December 7, 2020, the claimant and his partner took the child, who was born to a homeless mother in November 2020, into their household. They thus became its foster parents. In their relationship with each other, the foster parents designated the claimant as the beneficiary. The family benefits office granted him child benefit from January 2021, but refused it for the months of November and December 2020. As a result, the family benefits office also denied the claimant the child bonus for 2020.
The claimant's appeal was unsuccessful. The tax court (Finanzgericht, FG) considered the appeal to be well-founded with regard to the child benefit for the month of December 2020 and also with regard to the 2020 child bonus. The BFH did not share this view and therefore overturned the judgment of the tax court insofar as it had upheld the claim.

Because the biological parents were primarily entitled to child benefit at the beginning of the month in question, the claimant is not entitled to child benefit for the month of December.
According to the BFH ruling, the decisive factor is that the actual circumstances existing at the beginning of the month are and remain decisive for the assessment of the competition for entitlement. In the case in dispute, only the child's biological parents were still entitled to child benefit at the beginning of December 2020. Unlike foster parents, their entitlement to child benefit does not require them to take the child into their household.
For this reason, they remained entitled to child benefit for this month in preference to the foster parents who only joined the household in the course of December 2020. The plaintiff's priority entitlement pursuant to Section 64 (2) of the German Income Tax Act (Einkommensteuergesetz - ITA) as a result of taking up residence with the foster parents on 7 December 2020 is only to be taken into account from the following month, in this case from January 2021. For this reason alone, the plaintiff's entitlement to the child bonus for 2020 was also ruled out, as this would have required an entitlement to child benefit in 2020.