Germany's Bürgergeld reform lowers asset thresholds and tightens sanctions for self‑employed

From July 2026 Germany will rename the Bürgergeld welfare benefit to Grundsicherungsgeld. The reform ends the one‑year grace period for housing costs and reduces the protected asset allowance to €15,000 per person in a benefit‑seeking household, replacing the previous €40,000/€15,000 split during the first year.

Self‑employed claimants, estimated at around 150,000, face stricter sanction rules: first violations can lead to a reduction of up to 30 % of the benefit, and repeated non‑compliance may result in a complete loss of payment. Existing recipients retain their current entitlements and do not need to re‑apply, but new applicants lose the previous protection of a housing‑cost grace period.

The changes also tighten reporting obligations, requiring more detailed and timely income documentation from self‑employed beneficiaries. Political debate is intense, with the governing coalition pushing the reforms while opposition parties and social courts challenge the proportionality of the sanctions.