Cabinet: Cuts in housing benefit: Cabinet approves draft
Who Housing benefit receives, must foreseeably prepare for cuts or the complete cancellation of state services. In Berlin, the Federal Cabinet launched a bill from Construction Minister Verena Hubertz (SPD) that is intended to save 1.5 billion euros in housing benefit next year and even two billion euros per year from 2028.
The draft now goes to consultation Bundestag. The changes are scheduled to come into force on January 1, 2027. Existing housing benefit notices remain valid. This means that the cuts will only take effect gradually when new notices are issued. As a rule, a new application must be submitted every twelve months.
No adjustment for inflation
Ultimately, as things stand, the cuts will affect all housing benefit budgets, according to government circles. On the one hand, the so-called dynamization is to be suspended, which means that housing benefit will not be adjusted to inflation and rent price developments for the time being. On the other hand, the so-called heating cost component is halved.
The third lever: The so-called housing benefit formula will be changed so that fewer households receive the aid. The benefit should be eliminated completely for households at the upper income limit of those who are currently eligible for housing benefit. So anyone who receives amounts of 50 to 60 euros a month today will have to do without it in the future, it was said in government circles.
Those who remain on housing benefit should receive lower amounts in the future. People with very little money should switch from housing benefit to basic security benefits.
Additional costs for basic security
This results in higher costs for basic security, as has been admitted in government circles. This means additional expenditure in the federal social budget as well as in the municipalities, which contribute to the costs of accommodation. If you take this into account, the bottom line is that the state can save around 1.16 billion euros in 2027, and then around 1.5 billion per year from 2028.
According to the Federal Statistical Office, the federal and state governments each paid around 4.7 billion euros in housing benefit to around 1.2 million households in 2024. At the beginning of 2023, the circle of those eligible was significantly expanded with the Housing Benefit Plus Act. According to the Ministry of Housing, 44 percent of recipients are families, and 52 percent of housing benefit households have pensioners.
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