German Städtetag warns of extra municipal costs from housing benefit cuts

The German Städtetag cautions that the planned reduction and tightening of Wohngeld (housing benefit) will create additional financial burdens for municipalities. According to its chief executive Christian Schuchardt, some recipients would fall back into basic security benefits, forcing cities to cover part of their rent and heating costs. He criticised the draft law’s short deadlines and the lack of a simplification of the application process, calling it a “great disappointment” that the federal government is not using the reform to streamline procedures.

Schuchardt cited an agreement reached at the recent conference of the German ministers and Chancellor Friedrich Merz, whereby the federal and state governments committed to compensating municipalities for extra costs arising from federal legislation. He urged that this compensation also apply to the Wohngeld reform, noting the quote: “If fewer people receive Wohngeld and the benefit is also cut, the federal and state governments save on Wohngeld, but the municipalities may incur additional costs.”