Overview

• Union and SPD leaders agreed on a sanction cascade: a 30% cut after a second missed Jobcenter appointment, full suspension of cash benefits after a third, and a halt to housing payments if the recipient remains unreachable the following month.
• Placement priority over training will be reinstated, with limited exceptions for younger people, and rules on protected assets and initial grace periods will be tightened to narrow eligibility.
• Chancellor Friedrich Merz said the bill will be introduced to the Bundestag this year with the goal of it taking effect by spring 2026, while Labor Minister Bärbel Bas confirmed the measures will be drafted to the edge of what courts permit.
• Bas said people with serious health or psychological impediments should be exempt from harsher penalties, and both she and Merz tempered savings claims, citing at best around €1 billion if 100,000 recipients move into work.
• The package also includes an ‘Aktivrente’ allowing retirees to earn €2,000 per month tax-free targeted for January 1, 2026, a new e‑car subsidy funded with €3 billion, and an additional €3 billion reallocated for federal roads, as unions, Greens and social groups mount strong opposition.