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German Cabinet Draft Would Cut Wohngeld and Change How Social‑Benefit Rates Are Updated

Lawmakers must decide whether cuts that could push many households into other safety‑net programs will become law.

Overview

  • The cabinet approved a draft Wohngeld reform on July 6 that would suspend the planned 2027 increase, halve the permanent heating‑cost component and change the calculation so income reduces payouts more strongly.
  • Modelled estimates tied to the draft show about 381,000 of roughly 1.2 million current Wohngeld households could lose entitlement if the law is passed, but that figure is a provisional projection not a final count.
  • Existing Wohngeld decisions would generally remain paid through the end of their current approval periods under the proposal, creating a phased effect as cases come up for renewal.
  • The new Grundsicherung for work‑seekers took effect on July 1 and the government has confirmed Pflegegeld is not counted as income under that scheme, which shapes who must seek SGB II or SGB XII support if Wohngeld ends.
  • Key outcomes still depend on parliamentary changes, a statutory re‑calculation of rule rates using the EVS 2023 data for 2027 and administrative rules, so affected households should track their award end dates and be ready to apply for alternative benefits.