Federal government plans major cuts to housing benefits

Federal Building Minister Verena Hubertz announced cuts that will affect all recipients. One third of households could lose eligibility.

Federal Building Minister Verena Hubertz (SPD) told the Rheinische Post that the planned cuts to housing benefits will affect all current recipients. One third of housing benefit households are set to lose eligibility entirely.

Hubertz stressed that existing approvals will not be changed. Housing benefits are typically granted for twelve months, in some cases for 24 months. A new application is then required.

The federal government aims to save a total of two billion euros, one billion each from the federal level and the states. Hubertz called the step painful as a Social Democrat and cited the economic situation as the reason.

The Left party criticized the plan. Party leader Ines Schwerdtner accused the Merz government of cutting benefits for people with low incomes.

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Politicians Manuela Schwesig and Markus Söder advocating for tax reform in the German parliament following the rejection of a relief premium.
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Politicians call for tax reform after Bundesrat rejects relief premium

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After the Bundesrat blocked the planned tax-free relief premium of up to 1,000 euros, leading politicians are urging a comprehensive income tax reform instead. Manuela Schwesig (SPD) and Markus Söder (CSU) described the premium as failed.

Minister President Sven Schulze has called for stronger pressure on welfare recipients. The CDU politician criticised that many benefits are received without any return contribution.

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The SPD parliamentary group has opposed flat cuts to parental allowance. Family Minister Karin Prien of the CDU faces pressure to save 500 million euros.

Several CDU politicians have distanced themselves from Chancellor Friedrich Merz’s comments on statutory pensions. Merz described pensions as at most a “basic security” for old age. Saxony-Anhalt’s premier Sven Schulze particularly urges consideration of the East German situation.”

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Germany currently spends 751 billion euros on social benefits. Spending is rising particularly for unemployment benefit I, care allowances and social assistance.

Germany's black-red federal government aims to pass a package of reforms covering taxes, the labor market, pensions and bureaucracy reduction before the summer break. A further coalition committee meeting shortly before the parliamentary summer recess in early July is set to make the decisions. Chancellor Friedrich Merz will invite social partners to the chancellery in early June.

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Top representatives of Germany's black-red coalition from CDU, CSU and SPD concluded their two-day talks on energy prices and social-tax reforms late Sunday night at Villa Borsig near Berlin. No results were disclosed immediately. It remains unclear if announcements will follow on Monday.

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