Overview

• Coalition leaders agreed to rename the benefit ‘Grundsicherung’ and impose faster, harsher penalties, including a 30% cut after a second missed Jobcenter appointment and a full payment stop after a third.
• If recipients still fail to appear the following month, housing support can also cease, with hardship exemptions pledged for health and psychological cases and rent in some instances paid directly to landlords.
• The deal restores a placement‑first approach over longer training and tightens asset rules by ending initial grace periods, with protected savings to be tied to contributors’ work histories and age.
• SPD leaders defend the shift as enforcing cooperation, but party left, unions and social groups warn of constitutional risks and greater hardship; Merz counters that no one in Germany will be left without shelter.
• Officials promise a quick timetable, with Merz projecting enactment by spring 2026, and the package also bundles an ‘Aktivrente’ allowing retirees to earn €2,000 tax‑free monthly, new e‑car purchase subsidies and extra highway funding.