Unions and welfare groups oppose German care insurance cuts as cabinet aims to plug 8 billion euro deficit

Cabinet measures and fiscal targets

On Wednesday, Germany's black-red federal cabinet approved a package of reforms to the statutory long-term care insurance system aimed at averting an estimated €8 billion deficit projected for 2027. Under the draft legislation, the government plans to eliminate the €131 monthly relief allowance for Care Grade 1 allocated for everyday household assistance, replacing it with an entitlement to care companionship. In addition, the assessment criteria for Care Grades 1 through 3 will be tightened to manage the growing number of benefit recipients. Contribution rates will rise by 0.3 percentage points for childless policyholders, while the annual income threshold for contribution assessments will increase by €3,600. Co-insured spouses and civil partners will pay a new 0.52% contribution surcharge, though exemptions will apply to parents of children with disabilities and family caregivers. Contributions will also be levied on mini-jobs for the first time, while baseline rates for the majority of contributors remain unchanged.

Alliance opposition and democratic concerns

A coalition of 14 trade unions, welfare federations, and advocacy groups responded to the cabinet decision by calling on the federal government to reverse austerity measures across the social sector. The alliance includes the German Trade Union Confederation (DGB), IG Metall, Verdi, Caritas, Diakonie, the VdK social association, the Social Association of Germany (SoVD), the Paritätische Gesamtverband, BUND, and the German Women's Council. The groups expressed concern that altering the care grading classifications will restrict or block access to statutory care benefits for those in need. In a joint appeal, the signatories warned that reducing social protections damages public trust.

Social cohesion is a prerequisite for democratic stability.

The alliance further cautioned that shifting the mix of care grades within residential facilities could destabilize staffing ratios that were established through protracted regulatory negotiations.

Broader budget cuts and alternative funding

Beyond the care insurance sector, the alliance flagged proposed reductions in several other federal welfare programs, including housing allowance, the child supplement, advance maintenance payments, and youth and integration assistance. The organizations argued that social welfare systems must deliver stability in daily life, the workplace, and the home, rather than creating coverage gaps that force individuals into private commercial products. Instead of reducing statutory services, the coalition urged the government to finance safety nets through higher taxation on high personal wealth and inheritances.

People should make early provisions for this.

Despite the consumer warning, the Bund der Versicherten noted that many households neglect private long-term care coverage in favor of supplementary dental or legal insurance policies.

Commission mandate and patient advocate criticism

The draft law now proceeds to the Bundestag and Bundesrat for legislative debate ahead of its scheduled implementation in January. An expert commission has been tasked with evaluating additional structural reforms by January 2027, with dynamic adjustments to price increases scheduled to begin in 2029 alongside expanded benefits for young recipients under 25 years old. However, the commission's scope drew criticism from patient protection organizations after Health Minister Carsten Linnemann ruled out specific policy options, including capping co-payments for inpatient nursing home care and merging statutory and private care insurance systems.

The Federal Health Minister wants to impose thought taboos on the care commission regarding key issues.

Brysch demanded that all viable solutions remain under active consideration rather than being dismissed before the commission convenes.