The German government wants to cut housing benefit (Wohngeld) from January 1, 2027. Experts warn hundreds of thousands of households could lose their claim entirely.
The Wohngeld cut, set out in Drucksache 21/8284, would change three parts of how Wohngeld is calculated and paid out:
- It would suspend the regular Wohngeld adjustment, which updates the benefit for rent and price increases every two years. Without the adjustment, Wohngeld would not rise when rents and prices do, so the payment could cover less of your costs over time.
- It would halve the heating cost lump sum. This lump sum (Heizkostenpauschale) was added in 2023 to help cover energy bills.
- The formula would count more of your income. Some households that qualify today would pass the income limit and lose eligibility once the new formula applies.
The government says the reform also simplifies the Wohngeld process, which should help both renters and the local Wohngeld offices.
NOTE: The law has not passed yet. The housing committee held its hearing on November 4, 2026. The bill still needs Bundestag and Bundesrat approval first.
The Government Says the Wohngeld Cut Would Save 1.5 Billion Euros
The housing ministry wants the Wohngeld cut to save about 1.5 billion euros. That is close to 40% of the current Wohngeld budget.
Savings could reach 2 billion euros a year from 2028. The federal government and the states split Wohngeld costs equally, so the savings would be shared between them.
Officials say the Wohngeld system grew too generous after a past expansion, so they want benefits refocused on households with the greatest need.
Who is at Risk of the Wohngeld Cut?
Families, single parents and pensioners with low state pensions are large groups among Wohngeld recipients, so the cut could reach many of them.
Pensioners with low state pensions make up over half of all recipients, and advocacy groups warn the reform would hit retirees hardest.
Estimates of how many households could lose Wohngeld vary widely. Different groups count the impact in different ways.
| Source | What They Expect for Households |
|---|---|
| Government modelling | 238,000 households lose Wohngeld completely. About 1 million more keep it but get less, with the cuts growing until 2029. |
| National tenants’ association (Mieterbund) | Up to 500,000 recipients could lose the benefit entirely |
| Housing industry group GdW | A third of Wohngeld households drop out |
| Welfare group Der Paritätische | 163,000 households move onto basic income support (Grundsicherung) |
WARNING: The new formula could push you below the cut-off. This can happen even if your income and rent stay the same.
