Overview

• CDU and SPD agreed on an overhaul that rebrands the welfare system as Grundsicherung and centers it on a strict penalty cascade for non‑cooperation.
• Missing a second jobcenter appointment would cut the standard rate by 30%, a third miss would stop cash benefits, and continued absence the following month could halt housing and heating payments, with hardship exceptions for health issues.
• Refusing work would trigger cash benefit cuts in line with court rulings, while accommodation costs could be paid directly by jobcenters to landlords to keep a roof over recipients’ heads.
• The package also ends the asset-protection grace period, speeds required moves from overly expensive housing, restores job-placement priority over training in most cases, and pledges tighter action against organized welfare fraud.
• Chancellor Friedrich Merz said a bill will be introduced this year for passage early 2026 with the law taking effect by spring, projected savings if more people return to work, and he insisted no one will become homeless as SPD’s left, unions and opposition parties decry the plan and foresee constitutional challenges.