Federal Minister for Construction, Verena Hubertz (SPD), plans to implement savings concerning housing benefits (Wohngeld) in the coming year that are less substantial than initially anticipated. This information comes from a draft bill put forward by her ministry, which was cited in the Friday edition of the “Tagesspiegel”.
Under the new plan, Hubertz aims to cut spending on housing benefits by 738 million euros compared to previous levels. The states and federal governments, which jointly finance the social benefit, would reduce their respective contributions by this amount. Currently, the federal government and the states collectively spend nearly five billion euros annually on housing benefits.
Previously, Finance Minister Lars Klingbeil (SPD) had expressed a desire for a billion-euro saving for the federal budget regarding housing benefits as early as 2027. Under the current plan, both the federal government and the states will only begin saving one billion euros each, compared to 2026 levels, starting in 2028. This change affects all existing recipients-approximately 1.2 million households across Germany.
The Minister for Construction is targeting cuts in three specific areas: she plans to halve the heating cost allowance, phase out a planned increase in housing support scheduled for January 1, 2027, and, most significantly, she intends to alter the calculation formula for the housing benefits. This regulatory change has the largest consequences. Simplified, it means that a greater portion of eligible households’ income will be counted, making them appear less financially needy and thus resulting in lower housing benefit payments. Last week, Hubertz told the “Rheinische Post” that this measure could mean that roughly one-third of current eligible recipients may no longer receive benefits.
These cuts to housing allowances are projected to push more people into the basic security or social assistance programs. Hubertz’s officials estimate that the federal government will incur additional costs of 192 million euros for basic security in the coming year, while municipalities will need to spend an extra 33 million euros. Furthermore, social assistance under Social Code 12 is expected to create additional costs for the federal government amounting to 114 million euros.
Mayra Vriesema, a Green party spokesperson on housing benefits, strongly criticized the proposals. She told the “Tagesspiegel” that this draft bill represents one of the most significant social cuts experienced in recent years. She argues that the black-red coalition is planning a massive assault on the social security of over a million households under the guise of budget consolidation. The proposed measures-halving the heating component, increasing the income calculation factor, and postponing the housing benefit adjustment for 2027-will hit the most vulnerable populations of society the hardest. Vriesema pointed out that the federal government is knowingly accepting that around 163,000 households will lose their housing benefit claim by 2029 alone, forcing them directly into secondary basic security systems because they can no longer overcome their need for aid on their own. She stressed that no money is actually being saved in this process; rather, funds are being deliberately shifted from one pot to another.
Adding to her concerns is the alleged political opaqueness of the federal government. In its response to a parliamentary inquiry on June 17, 2026, the government claimed that the concrete effects of the savings were still being determined and that no statements could yet be made regarding the consequences for housing costs. However, just six days later, a detailed draft bill was released, meticulously calculating how many billions would be saved from the poorest households. While the government claimed to be working on concepts to preserve the social protection level in its response to Parliament, it was already creating the facts for massive cuts on its desk starting January 1, 2027. This discrepancy between the vague promises made in the government’s response and the hard-line cut dictates in the draft bill is described as a major breach of trust.
