Background information

Russia's war of aggression on Ukraine and high inflation are leading to enormous price increases for heating, hot water and electricity. The housing benefit reform is part of the third relief package of the federal government, which has a volume of €65 billion and was passed on 16 December 2022. The Federal Government is reacting to the sharp rise in energy costs and the associated financial burdens for citizens. With the housing benefit reform, significantly more low-income earners are to receive a higher housing benefit in the future.

Housing benefit is regulated by the Housing Benefit Law (WoGG).

Content of measure

The housing benefit reform comes into force on 1 January 2023. Housing benefit is paid to households with a low income - this includes above all families and single parents as well as senior citizens. Housing benefit is paid as a subsidy to households whose income is just above the basic security threshold.

The housing allowance is expected to increase by an average of about €190 per month in 2023 and also to be reach a greater number of people. The allowance will rise from an average of around €180 to around €370 per month. The exact housing allowance amount is reviewed and determined by the local housing allowance office.

A permanent heating cost component is intended to cushion rising energy costs, and a climate component is intended to curb costs, such as for energy-efficient building renovation, for the first time. The new heating cost component is €2 per square metre.

The federal government estimates the costs at around €4 billion. Half of the costs of the housing allowance reform will be borne by the federal government and half by the federal states (Länder).

Use of measure

According to the federal government, about two million households will be able to receive the new "housing benefit plus" in 2023. So far, about 600,000 households receive housing benefit. Around 1.4 million households will be entitled to housing benefit for the first time or again as a result of the reform.

According to the figures of the Federal Statistical Office (Destatis) of December 2022, about 595,300 households in Germany received housing benefit at the end of 2021. This was 1.5% of all private households with their main residence. The number of households receiving housing benefit has thus fallen by 3.7% or around 22,900 compared to the previous year 2020.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Does not apply to businesses	People on social benefits People on low incomes

Actors and funding

Actors	Funding
National government Local / regional government	National funds Regional funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Consulted
Form	Not applicable	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Peak or cross-sectoral level

Involvement

The respective association's statements were presented in a public hearing of the new legislation. The hearing was held by the Committee on Housing, Urban Development, Building and Communities on 7 November 2022.

Views and reactions

The German Trade Union Confederation (DGB) considers the extension and increase of the housing benefit in the current crisis to be very positive, but warns of implementation problems due to the increasing number of beneficiaries and too few staff at the housing allowance offices.
German employers's organisations did not comment on the draft law during the hearing in the German Bundestag.

Sources

• 28 September 2022: IW Short Report Housing Benefit Reform (IW Kurzbericht Wohngeldreform (www.iwkoeln.de)
• 13 October 2022: Consultation German Bundestag (Beratung Deutscher Bundestag (www.bundestag.de)
• 27 October 2022: DGB unsolicited statement (DGB unaufgeforderte Stellungnahme (www.bundestag.de)
• 03 November 2022: GdW Statement (GdW Stellungnahme) (www.bundestag.de)
• 07 November 2022: German Bundestag Consultation (Deutscher Bundestag Anhoerung) (www.bundestag.de)
• 05 December 2022: Federal Statistical Office (Destatis) (www.destatis.de)
• 16 December 2022: Housing Benefit Act (Wohngeldgesetz) (www.gesetze-im-internet.de)
• 01 January 2023: Housing Benefit Reform Federal Government (Wohngeldreform Bundesregierung) (www.bundesregierung.de)
• 31 January 2023: Effects of the Housing Benefit Reform German Bundestag (Auswirkungen Wohngeldreform Deutscher Bundestag) (www.bundestag.de)