Overview

• The agreement tightens sanctions: a 30% cut after a second missed Jobcenter appointment, full suspension of cash benefits after a third, and a halt to housing payments if contact remains absent the following month, with exemptions for health or psychological impairments.
• Immediate job placement regains priority through a reinstated Vermittlungsvorrang, and rules on protected assets and grace periods are tightened by linking allowances to age and contribution history.
• Leaders said the draft will be finalized quickly and introduced to the Bundestag this year, as part of a package that also includes an Aktivrente allowing retirees to earn up to €2,000 tax‑free monthly, new e‑car subsidies, and additional road funds.
• Opposition from Greens, Left, unions and SPD’s left wing warns of poverty risks and likely constitutional challenges, citing 2019 court limits on sanctions and questioning full benefit cuts.
• Ministers and independent analysts cautioned that immediate fiscal savings from tougher sanctions will be small, with meaningful budget effects dependent on later steps to improve work incentives.