Overview
- The cabinet approved a draft Wohngeld reform on July 6 that has been sent to the Bundestag and aims to cut federal housing-subsidy spending by about €1.5 billion in 2027 and €2 billion annually from 2028.
- Key measures in the bill include suspending the scheduled two‑year indexation, reducing the heating‑cost component by half, changing the benefit formula and removing entitlement where monthly Wohngeld would be under €15.
- Officials estimate roughly one third of current recipients—about 400,000 households out of roughly 1.2 million—could lose entitlement, with renters and many retirees among those most likely to be affected.
- Welfare groups and local officials warn the cuts will push many people into Grundsicherung (basic income support), which triggers stricter means tests and could raise costs and administrative burdens for municipalities.
- Existing decisions remain valid until they expire, the changes would apply to new or renewed awards from January 1, 2027, and current rules on asset thresholds and disability exemptions are not being changed in this draft.