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Government Sends Major Wohngeld Reform to Bundestag

Cabinet draft seeks roughly €750 million in savings next year by tightening eligibility, suspending regular indexation, halving the heating allowance.

Overview

  • The Bundeskabinett approved a Wohngeld reform draft on 6 July and has sent it to the Bundestag for debate with the government aiming for the changes to take effect on 1 January 2027.
  • The draft changes how Wohngeld is calculated by suspending the two‑year indexation, halving the extra heating-cost component, and tightening income and eligibility thresholds.
  • Officials project about €750 million in federal savings next year rising toward roughly €1 billion in later years, while ministry estimates indicate around one third of the roughly 1.2 million current Wohngeld households could lose entitlement.
  • The bill foresees many affected households moving into basic social assistance, with the draft estimating hundreds of thousands losing Wohngeld and roughly 160,000 later qualifying for Grundsicherung or related benefits.
  • Tenant groups, welfare organizations and opposition parties have sharply criticized the plan and legal challenges are likely, while the government says already-issued Wohngeld decisions remain valid until their current expiry so the cuts will phase in over time.