Reform on the brink
But no reduction in housing benefit? Committees stand in the way
09/22/2026 – 12:34 p.mReading time: 4 minutes
The federal government wants to save billions on housing benefit, but the Federal Council still has to agree. And the signs point to resistance.
It’s about a lot of money and hundreds of thousands of households: next Friday it will be discussed Federal Council with the federal government’s planned housing benefit reform. Even before the meeting, however, it became clear that the states did not want to support the plans in their current form. Two committees recommend rejecting the bill.
Both the lead committee for urban development, housing and spatial planning and the social committee advise the Federal Council to reject the draft. Their reasoning: Although the need for reform and savings in the federal budget are fundamentally understandable, the social and housing policy consequences for those affected are “disproportionate”.
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Housing benefit reform: Over 380,000 households affected
According to the committees’ calculations, the cuts would result in more than 380,000 households no longer receiving housing benefit: around 238,000 would lose their entitlement completely, and around 143,000 more would have to switch to basic income support. In addition, around a million households would receive less in the future. A central point of criticism is that the costs would be shifted “disproportionately to the municipal level” if previous housing benefit recipients receive other social benefits in the future.
However, the Federal Council committees do not agree. The Finance Committee, for example, recommends not raising any objections.
What exactly is the federal government planning?
- Suspension of the dynamization: Housing benefit should no longer be paid to the people for the time being inflation and the rental development can be adjusted.
- Halving the heating cost component: The surcharge, which is intended to cushion the increased energy costs, will be reduced.
- Change in the housing benefit formula: Income is taken into account more, so fewer households are eligible. The benefit should be eliminated completely for households at the upper income limit.
The federal and state governments want to save around 1.5 billion euros in 2027 and a good two billion euros per year from 2028. Hubertz explained that there was no way around cuts. The federal government justifies the reform with the tense budget situation.
Pensioners are particularly likely to receive housing benefit
Social associations, municipalities and parts of the federal states consider the hoped-for savings to be deceptive. Because a significant part of the money is not saved, but only postponed. Anyone who loses their right to housing benefit often ends up with basic security – and a large part of this is paid by the municipalities. As the information service “Table.Briefings” reports, of the two billion euros, there are actually only around one and a half billion left; The federal government itself would only receive around 500 million euros.
