Germany scrapped planned cut to housing benefit

Germany's governing coalition has agreed to abandon the Wohngeld housing benefit cuts planned for 2027. At the same time, the planned increase in payments next year will not be implemented.

This was reported on 12 November by Deutschlandfunk following negotiations by the leadership of the governing coalition on the 2027 federal budget.

According to the chairman of the SPD parliamentary group, Matthias Miersch, the coalition has agreed to maintain the current rules for housing benefit. This means abandoning two key provisions of the previously proposed reform – halving the heating cost component and changing the calculation formula for the benefit.

The original government plan envisaged halving the heating component. Together with the change in the calculation formula, this could have significantly reduced the benefit for low-income households.

According to a preliminary estimate by the German Tenants' Association (Deutscher Mieterbund), up to 500,000 households could have lost their entitlement to Wohngeld if the reform had been implemented. These cuts will now not be introduced.

However, the indexation of housing benefit planned for 1 January 2027 will still be suspended. The amount of Wohngeld is normally reviewed every two years to take account of changes in rents and consumer prices. The next increase was due to take place in 2027.

The German Tenants' Association welcomed the abandonment of the cuts, but criticised the freezing of payments. The organisation believes that, given rising rents and the cost of living, the absence of indexation will effectively reduce the purchasing power of benefit recipients.

According to the association, 93% of households receiving Wohngeld rent their homes. Around 40% of recipients are families, including single parents, and 51% of households include pensioners.

Wohngeld is available to residents of Germany with low incomes who meet the eligibility criteria. Potential recipients may include Ukrainians living legally in the country. The coalition agreement does not provide for any special new rules for Ukrainian citizens.

For current benefit recipients, the decision means that no general reduction in payments due to the planned reform is expected. However, the individual amount of Wohngeld may still change depending on income, rent level and household composition.

The coalition agreements must be taken into account during the further consideration of the 2027 federal budget. Final legislative decisions have not yet been made.