German government to slash Wohngeld benefits, affecting millions of families

The German cabinet has approved a reform of the Wohngeld housing subsidy that is expected to save more than €2 billion a year. The new calculation formula will lower payments for many households, and roughly one‑third of the 1.2 million existing Wohngeld recipients could lose the benefit entirely. The heating‑cost component, introduced during the energy price surge, will be halved.

Data from the Federal Statistical Office show that about 2.25 million people live in Wohngeld households, with children comprising 37.5 % of those households. Because the cuts reduce the amount families receive, children are projected to be the most adversely affected group. The reforms also tighten eligibility and may lead to a significant number of households falling below the support threshold.

The changes are scheduled to take effect from the upcoming year, and the Ministry of Housing, Urban Development and Building has indicated that the payment for August 2026 will be made on 31 July 2026, before the new rules are applied.