Overview

• Coalition leaders agreed to rebrand the benefit as Grundsicherung and restore stricter conditionality, including a 30% cut after a second missed Jobcenter appointment, full payment stoppage after a third, and possible suspension of housing support if absence continues into the following month, with medical hardship exemptions.
• The package revives a placement priority over training in most cases and trims asset-protection rules by scrapping initial grace periods and tying allowable savings to age and contribution history.
• Chancellor Friedrich Merz defended the approach, saying no one will be left homeless, while Social Minister Bärbel Bas cautioned that compliant recipients have nothing to fear and criticized talk of abolishing the benefit for causing public anxiety.
• Legislation will be drafted swiftly, tabled in the Bundestag this year and targeted for approval early next year, with implementation planned for early 2026; the deal also finalizes an Aktivrente allowing retirees to earn up to €2,000 tax-free monthly from January 1, 2026.
• Unions, social groups, Greens and parts of the SPD warn of social harm and potential constitutional conflicts given 2019 court limits on sanctions; experts expect modest fiscal savings and greater burdens on Jobcenters, and some SPD lawmakers signal internal pushback.