Germany plans significant cuts to housing allowance

The German Federal Ministry for Housing, Urban Development and Building (BMWSB) reports that approximately 1.2 million households currently receive housing allowance (Wohngeld). Among recipients, 52 percent are retirees and 44 percent are families, including many single parents.

Proposed budget cuts by the federal and state governments aim to reduce housing allowance spending by approximately 1.5 billion euros in the coming year. Further reductions are planned for 2027 and 2028, with potential annual savings reaching around two billion euros. These measures could result in about one-third of current beneficiaries losing eligibility or receiving significantly lower amounts.

The calculation of the allowance is based on a complex formula involving household size, income levels, and rent or property costs. While there is no statutory maximum limit on apartment size, the maximum allowable rent used in calculations is determined by the number of household members and the specific rent level (Mietenstufe) assigned to the municipality or district.