Overview

• Merz proposed capping rental subsidies at a set rate after citing costs of €20 per square meter that can amount to €2,000 monthly for a 100 sqm apartment in major cities.
• The reform of Bürgergeld into a new Grundsicherung is projected to generate more than €2 billion in savings through stricter housing controls and tougher benefit rules.
• The plan will phase in adjustments to work-acceptance requirements and introduce checks on living space allocations to curb welfare topping-up and undeclared labor.
• Merz pledged that people facing sudden unemployment would continue to receive adequate benefit rates, with possible temporary increases for those in genuine need.
• The coalition intends a gradual rollout of the overhaul ahead of its 2026 implementation, with ongoing recalibrations to maintain both sustainability and social support.