German government plans sharp cuts to housing benefit

Germany's federal government is reportedly planning substantial cuts to its housing benefit program, Wohngeld, aiming to save approximately 1 billion euros annually. This measure is part of a broader austerity drive driven by the country's economic situation, including multiple crises and sluggish growth.

According to reports, the planned reductions would bring down the total annual expenditure for Wohngeld from the current roughly 5 billion euros (shared between the federal and state governments) to about 3 billion euros. The Ministry of Construction stated that existing benefit decisions would not be affected, as Wohngeld is typically granted for 12 to 24 months before requiring a new application.

Social Democratic Party minister Lisa Paus described the planned cuts as a "painful step" for her. In 2024, around 1.2 million households relied on this state support, designed for low-income individuals facing high housing costs. The program had been significantly expanded at the beginning of 2023. Data from the Federal Statistical Office shows that 44% of Wohngeld recipients are families, and 52% are pensioners.

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The step is painful for me as a social democrat.