Estimating the effects of a major reform in additional child benefits granted to German low-income households

This research note provides a short overview of the difficulties associated with the estimation of the short-term fiscal effects of a major reform in additional child benefits granted to German low-income households. We briefly discuss the methodology used to construct both an appropriate database and to operationalise the microsimulation model. Of particular note are the imputation of heating costs and the conversion of that part of household incomes used to determine past entitlement to additional welfare benefits (accountable income) into gross household incomes. Finally, the role of the model within the legislative process is roughly outlined.