German government plans €2 billion cut to housing benefit, one third of recipients to lose eligibility

Cuts announced

Federal Building Minister Verena Hubertz confirmed on 19 June 2026 that the German government is moving ahead with deep cuts to the Wohngeld housing benefit. The draft law, titled “Gesetz zur Vereinfachung und Fortentwicklung des Wohngeldgesetzes”, has been sent for Ressortabstimmung (inter-ministerial coordination), after which the cabinet will vote. Total annual spending by the federal government and the states is to fall from around €5 billion to about €3 billion, split evenly: €1 billion saved by the federal level, €1 billion by the Länder.

“Jedes Ministerium muss sparen, damit wir in Zukunft wieder größere Handlungsspielräume haben.”

Who is affected

All current recipients will feel the cuts. One third of the approximately 1.2 million Wohngeld households – roughly 400,000 – will lose their entitlement altogether once the new rules take effect. Many of those are households whose income was only just low enough to qualify under the current system. Existing approval notices will remain valid until they expire, typically after 12 or 24 months.

“Die Kürzungen beim Wohngeld werden leider alle bisherigen Empfänger betreffen. Ein Drittel der bisherigen Wohngeldhaushalte wird rausfallen.”

According to the Federal Statistical Office, 1.2 million households received the benefit in 2024, at a total cost of €4.7 billion. The Building Ministry states that 44 percent of recipients are families and 52 percent are pensioner households.

Families44%

Pensioners52%

Other4%

Families

44 %

Pensioners

52 %

Other

4 %

Data from the article text

Political reaction

Hubertz described the step as painful, particularly for a Social Democrat, but said the budget of her ministry left no alternative. The party Die Linke attacked the plan.

“Wieder kürzt die Merz-Regierung bei denen, die schon wenig haben.”

The Berlin SPD’s lead candidate for governing mayor, Steffen Krach, had earlier criticised the broader savings package that includes cuts to parental benefit, higher Deutschlandticket costs, and a freeze on Bafög increases.

Budget pressure

Hubertz cited the difficult fiscal situation – crises, weak economic growth, and a reform backlog – as forcing every ministry to contribute. The required €1 billion reduction in her portfolio could not be achieved otherwise, she said.

“Der Etat meines Hauses gibt leider keine andere Möglichkeit her, um die geforderte Milliarde zu erbringen. Insofern führt da leider kein Weg daran vorbei.”

Current5

Planned3

Current

5 € billion

Planned

3 € billion

Data from the article text

What comes next

The draft is now being reviewed by other ministries. Once the Ressortabstimmung is complete, the cabinet will decide on the bill. No date has been set. The reform follows the 2023 Wohngeld-Plus law, which had significantly expanded eligibility.