Housing benefit: Not a solution to rent madness – but part of the problem

dossier

“The housing benefit is to be increased on January 1, 2020; for this purpose, the federal and state governments will increase the funding for housing benefit. A total of 1.2 billion euros will be available in 2020. The federal government argues with the significantly increased housing costs and consumer prices. As a result, the effectiveness of housing benefit decreases over time. In addition, increases in income, which would only compensate for the development of consumer prices, would lead to a reduction or loss of entitlement to housing benefit, with the result that the number of recipients of housing benefit and the scope of housing benefit would decrease. This argument continues to rely on subject support, in which the housing benefit is passed on by the tenants to the landlords and thus the increased rent prices are legitimized or subsidized. There is no focus on property funding, which specifically means the construction of social housing…” – that’s how it beginsContribution “Housing benefit does not contribute to solving the problem of housing shortages – it is part of the problem” on August 1, 2019 at the Dortmund Trade Union Forum to solve the problem, which has the opposite effect. See:

• The federal and state governments want to save billions of euros in housing benefit - and pass the social costs on to municipalities and the poorest people instead of to landlords
  • The federal and state governments want to save billions of euros on housing benefit - the clear-cutting is affecting a record number of housing benefit households
    
    • Cutting housing benefit particularly affects pensioners, low earners and children
      “A statement from Anja Piel, DGB board member, regarding the planned cuts in housing benefit: "The cutback in housing benefit is unparalleled in the history of our social system. The cuts are particularly hard on pensioners, low-income earners and children. In total, the cut will affect 1.3 million households, all of which are already barely making ends meet. The federal government is completely depriving 400,000 households of financial help for rent; they will go on housing benefit in the future empty.All the more incomprehensible because at the same time the Union refuses to use very large assets and very high incomes to plug budget holes. Such a clear-cut would be the complete loss of a social compass. The members of the Bundestag must under no circumstances wave through the housing benefit cut.”DGB press release from October 6, 2026 
    • 1.3 million housing benefit households in 2025
      “At the end of 2025, around 1.3 million households in Germany received housing benefit. That was 7.2% or around 90,000 households more than a year earlier. As the Federal Statistical Office (Destatis) also reports, 3.2% of all private households received housing benefit (end of 2024: 3.0%). According to the Federal Ministry of Housing, Urban Development and Construction, state spending on housing benefit rose from around 4,689 million euros to 4,992 million euros (+6.4%) in the same period. This means that both the number of housing benefit households and housing benefit expenditure reached their highest levels since the time series began in 2005…” correctedPress release from September 25, 2026 from the Federal Statistical Office (Destatis)
  • Housing benefit is to be cut by billions – draft bill presented
    “The federal and state governments want to save around 1.5 billion euros on housing benefit next year. Further cuts are also planned in the following years: from 2028 onwards, a good two billion euros will be saved annually. This emerges from a draft bill from the Ministry of Construction by Verena Hubertz (SPD). The minister had already announced the project last week. Now the details are available. According to the draft, housing benefit should be reduced in three areas:
    – the flat rate for heating costs should be halved,
    – the planned increase in housing benefit on January 1, 2027 should no longer apply,
    – The calculation formula for housing benefit should be changed. (…)
    These planned cuts are fatal. As a result, many people will lose all or part of their entitlement to housing benefit and, as a result, will again be dependent on additional benefits under SGB II or SGB XII. However, due to the significantly lower asset exemption limits in SGB II, some of those affected will no longer be entitled to benefits and will therefore be left without sufficient social security. (…) There has to be a clear NO here. Such drastic cuts in housing benefit are not socially acceptable.” From theThomé Newsletter 21/2026 from June 27, 2026 including the link to the draft speaker
  • Bentele: “No escape from the poverty trap: housing benefit cuts are affecting the wrong people”
    “Plans particularly burden pensioners and families / hundreds of thousands are at risk of slipping into basic security (…) "Over half of the housing benefit households are seniors with small pensions. 44 percent are families, many of them single parents. These people have no cushion, no second income and no reserves - they have the housing benefit. Now they are to lose significant parts of this support. The VdK has been receiving a lot of letters for some time from members who are afraid of losing their apartment. These are not abstract numbers, these are people in real need.“…”VdK press release from June 28, 2026 – meeting the right people would mean reducing the rents at the expense of the landlords, unfortunately not a word about that here…
  • Criticism of draft bill on housing benefit: Tenants' association rejects cuts in housing benefit
    “(dmb) The German Tenants' Association (DMB) criticizes the planned savings of 45 percent in the housing benefit budget as disproportionate and sees them as a step backwards in social policy. Federal and state spending on housing benefit as a housing cost subsidy for overburdened households is expected to fall from 4.7 billion euros to 2.6 billion euros. "93 percent of all housing benefit recipients are tenant households. The German Tenants' Association completely rejects the planned savings in housing benefit and demands that these be withdrawn immediately," explains Melanie Weber-Moritz, President of the German Tenants' Association. (…)
    The savings targets are to be achieved by suspending the continuation of housing benefit in 2027, halving the heating cost component and adjusting the housing benefit formula. In total, there are annual savings for the federal and state governments amounting to 2.1 billion euros, while there are additional expenses of up to 750 million euros due to the migration of those affected to other social systems. "The Federal Ministry of Construction has a budget of 13 billion euros at its disposal, but only saves on housing benefit. This is neither understandable nor social, especially since more than half of those receiving housing benefit are pensioners and single parents. Instead of protecting these groups, they are threatened with additional financial burden and a switch to basic security," said Weber-Moritz.
    Since total spending on housing benefit will be cut by 45%, it can be assumed that the number of recipients will fall significantly. The DMB assumes that 500,000 households will no longer receive housing benefit as a result of the reform. At the same time, it can be assumed that the number of citizens' benefit and social assistance recipients will increase significantly; the draft bill envisages additional expenditure of 750 million euros for states and municipalities…”Press release from June 26, 2026 toopinion  
• Housing benefit in danger: Tenants' association warns of cuts - DGB firmly rejects cuts
  “The Tenants' Association and the German Federation of Trade Unions (DGB) are sounding the alarm: The Federal Building Ministry under SPD Minister Verena Hubertz is planning to meet its savings target of one billion euros by "restructuring" housing benefit - and is thus attracting sharp criticism. “We firmly reject any cuts in housing benefit,” said the DGB. Tenants' Association President Melanie Weber-Moritz warned the editorial network Germany that possible cuts should not lead to benefits being reduced or those entitled to them being worse off. What exactly the restructuring of housing benefit should look like remains unclear for the time being. “It is currently too early to make concrete statements about the amount of savings in housing benefit,” said a ministry spokesman. Details should only be determined with the government draft of the 2027 budget. The scope of possible cuts is significant. According to the Federal Statistical Office, a good 1.2 million households received housing benefit in 2024 - government support for people with low incomes and high housing costs. The total expenditure amounted to 4.7 billion euros. According to the Ministry of Housing, 44 percent of those receiving benefits are families, and 52 percent of housing benefit households have pensioners. The sharp increase in the number of recipients was triggered by the Housing Benefit Plus Act at the beginning of 2023, which significantly expanded the circle of those eligible. DGB board member Stefan Körzell sees the plans as a step backwards in social policy. "Instead of cutting financial aid for housing, rents must be effectively capped. If you want to spend less on housing benefit, you have to ensure lower rents," he said.His recipe: “This is only possible through the massive expansion of social, municipal and rent-controlled housing.” MPs from the Left and Greens expressed similar sentiments. The original plan was to simplify the payment of housing benefit.” Article by Robin Dittrich from May 9, 2026 in the Frankfurter Rundschau online 
• Housing benefit does not help solve the problem of housing shortages, it is part of the problem
  "The housing benefit reforms of the past few years have always had the aim of supporting more people with low incomes by expanding the circle of those eligible and increasing the amount of housing benefit. (...) As the name suggests, the housing market is not geared towards social needs, but rather according to the rules of the capital-oriented market economy. As a result, the market determines the prices of land, the level of rent and the price development of real estate. (...) In recent years it has become clear that the housing market economy is closely linked to the general financial economy (…) Such an investor can even use his control over the housing stock to exploit the growing economic power of an entire region through the rent without having to invest himself or bear any risk. He is of course not interested in a “relaxed” housing market and low-income people are completely uninteresting to him as a tenant. (…) Many previous recipients of housing benefit are now dependent on basic security benefits in accordance with the Social Security Code (SGB) simply because of their housing costs. (…) If the application is approved, the housing benefit reform can bring the tenants a little more money, but it will only make up for what has already been saved for seven years because of the discrepancy between wage developments and rent price developments. The entire system of housing benefits has the huge flaw that it is not geared towards the future, but instead repairs the worst damage of the past few years retroactively and in a makeshift manner.It always lags behind developments, because checking housing benefit at “need-based intervals” does not ensure stable performance, but at best only compensates for the loss of effectiveness that has already occurred for a short period of time. (…) A reform of housing benefit would only bring positive results if – people who are entitled to housing benefit would not have to spend more than 30 percent of their net household income on housing costs, taking into account appropriate apartment size and furnishings, – the housing benefit entitlement would be derived from the gross rent actually to be paid, i.e. that everything that has to be paid in connection with housing would also be the basis for the housing benefit calculation. Because rising costs for energy and public taxes also lead to noticeable additional costs for tenants, - the maximum amount of housing benefit could be derived from the local comparative rent or the rent index of the respective municipality, - all tenants would actually have the freedom to choose where they want to live, in all parts of the city and with all housing providers. This is the only way to prevent segregation and ghettoization - the income limit for entitlement to housing benefit and the size of the apartment to be taken into account are based on the assessment limits for housing benefit entitlement certificates according to the Housing Promotion Act and the regional differences in the housing market throughout the entire republic are actually taken into account. This is the only way to ensure that the financial resources are available at all times to ensure that housing benefit is adequately, permanently and adequately provided in the future.Above all, the federal government must get more involved again, ensure the necessary construction of apartments, show responsibility for housing policy and not just mess around with the housing benefit increase.” Contribution from September 23, 2025 from and at unionsforum.de 
• Housing benefit will increase by 15% from 2025 and costs 6 times more than social housing, the rent cap does not slow down... No return on rent!
  • Housing benefit will increase from 2025 – spending on housing benefit will be 6 times higher than on social housing. Tenants' Association: The gap between subject and property funding must be reduced
    “The German Tenants' Association (DMB) welcomes the continuation and planned increase in housing benefit by 30 euros [or 15 percent] from 2025. "However, not only the households entitled to housing benefit suffer from high housing costs, but every third tenant household is now overburdened by their housing costs. Simply increasing the housing benefit alone does not solve the enormous problems in the overheated rental housing markets," said the President of the German Tenants' Association, Lukas Siebenkotten, on the occasion of the draft bill for a second regulation to update the housing benefit in accordance with Section 43 of the Housing Benefit Act presented by the responsible Federal Ministry of Construction. (…) Federal and state spending on housing benefit will therefore rise to 4.7 billion euros in 2025. A study commissioned by the DMB, among others, shows that the subsidies for housing (subject funding) are 6 times higher than the funding for social housing (property funding). "A massive disproportion. The increase in housing benefit must not serve as an argument for putting off urgently needed rental law and housing policy reforms," ​​demands Siebenkotten. "Instead, the legislature should ensure that the glaring gap between object and subject funding is reduced and the expenditure for the construction of affordable rental apartments is significantly increased. The implementation of the tenancy law reforms agreed upon in the coalition agreement, which we have repeatedly called for, would also ensure that tenants are better protected against high housing costs and would therefore not have to apply for housing benefit.".DMB press release from August 6, 2024 , see:
  • No return on rent: Double housing misery
    "...The housing crisis remains acute - and building permits remain in the basement. Not only in metropolitan areas, but also in their suburbs, the main association of the German construction industry announced to jW on Friday. The Federal Statistical Office presented the figures for June on the same day: According to this, only 17,600 apartments were being built or renovated, a decrease of 19 percent compared to the same month last year. Even the lobby association of the construction industry speaks of a "in many places The prevailing housing shortage, which is becoming a "social explosive" a year before the federal election. This is true: almost two million households in the Federal Republic of Germany are likely to receive housing benefit in the coming year, because costs for living expenses, for energy and, not least, for living space are increasing - everything is becoming more expensive, in some cases unaffordable (SPD) explains: “We will increase the monthly housing benefit by an average of 15 percent or 30 euros.” This means that housing will continue to be affordable for millions of pensioners, families and workers. Is this really a statement that ignores the reality of life for millions? The amount of housing benefit for those entitled to benefits depends on the number of household members, income and rent. By no means is there a so-called “dynamization every two years”.The previous increase took place on January 1, 2023 when the “Housing Benefit Plus Act” came into force. State subsidies for housing would be used to “cushion” jumps in prices and rents. At least a tiny bit. (…) The housing benefit increase is necessary because the traffic light does not stop rents, the rental and housing policy spokeswoman [of the Left] of her Bundestag group was quoted as saying in a statement on Thursday. "In order to prevent housing companies from seizing the higher housing benefit through further rent increases, a nationwide rent cap is needed." In addition, more permanently affordable social, municipal and non-profit housing would have to be built. “Here too, the federal government is failing.” In other words: misery remains, in terms of housing, in construction.” Article by Oliver Rast in the young world from August 17, 2024 , see also, quite surprisingly:
  • Housing shortage in Germany The rent cap is not slowing things down
    “The rent control, introduced in 2015, is apparently largely ineffective. This is shown by current figures from the Mietenmonitor portal and a sample from the ARD magazine Plusminus (…) The rent cap, introduced in 2015, is apparently largely ineffective. Because a violation has no consequences. Apparently many landlords ignore the brakes - and thus drive up rental prices further. When asked about the rent cap, the agent just shrugs his shoulders: “The price is normal, we have completely different offers here.”
    Cities do not police violations
    Martin Peters from the Freiburg portal Mietenmonitor monitors the advertisements using special software. He uses many factors to calculate whether the required rent is permissible. And what Peters sees every day terrifies him. Because it shows: Hardly anyone cares about the brakes: "Also because the cities don't look at it. There is no authority that checks it," says Peters. Mietenmonitor carried out a study for Düsseldorf. Result: Around a quarter of the advertisements violate the rent cap…”Contribution by Matthias Fuchs, WDR, from August 19, 2024 in tagesschau.de 
• Housing benefit reform: The alarm must be raised
  “On January 1, 2023, the Housing Benefit Plus Act, an extensive housing benefit reform, will come into force: Housing benefit will be increased by an average of €190/month. increased and rises to around €370 per month. The number of people entitled to benefits triples from around 600,000 to 2.1 million people. This is where the problems begin.
  Housing benefit offices do not have adequate staffing levels
  In many places, the housing benefit offices now need months to process a housing benefit application. Despite the legal obligation in Section 17 Paragraph 1 SGB I, unfortunately there are not enough staff available. This means applicants for housing benefit will have to wait quite a long time for their application to be processed. A processing period of significantly more than six months is formally guaranteed. Here are the materials on the legislative process:https://t1p.de/nbt2z 
  Right to a preliminary WoGG decision
  A new entitlement to provisional payment of housing benefit has been introduced (Section 26a Paragraph 3 WoGG – N).In practice, if it is urgent, an application for a provisional decision in accordance with Section 26a Paragraph 3 WoGG will have to be submitted and, in case of doubt, an action for failure to act in accordance with Section 75 Sentence 2 VwGO will have to be filed after three months. The insurance messenger reports that there is not even updated software available as of January 1st, 2023:https://t1p.de/ix2br 
  How job centers and social welfare offices deal with housing benefit
  Under no circumstances is it permissible to discontinue SGB II or SGB XII benefits with reference to housing benefit. As long as housing benefit is not paid out, the job centers and social welfare offices must continue to provide living benefits. I am documenting such a case from Munich here:https://t1p.de/zuhwg . The Munich case shows exactly how this should not be done. In addition, there is no obligation to apply for WoGG as a priority service until June 30, 2023 (§ 85 SGB II – N/§ 131 SGB XII – N).As long as there is a need for help within the meaning of SGB II / SGB XII, you should urgently apply for basic social security benefits first.Then the people who are potentially entitled to WoGG should apply for SGB II/SGBActions for failure to act can be expected to take very long processing times.  
  Adjustment of the MOG rental values ​​to the new WoGG values
  In a number of municipalities, the “appropriate accommodation costs” within the meaning of SGB II/SGB This should be taken into account in the consultation.” From theThomé Newsletter 50/2022 from December 18, 2022 
  • See alsoDGB:Information about housing benefit – including housing benefit calculator 
• [Rental income subsidy] Bundestag votes to increase housing benefit 
  “The Bundestag passed the Housing Benefit Plus Act on November 10, 2022. A draft law “to increase housing benefit” (20/3936) introduced by the coalition factions (20/3936) was adopted in a version amended by the committee with the majority of the SPD, Alliance 90/The Greens, FDP and AfD against the votes of the CDU/CSU, with the Die Linke faction abstaining.
  From January 1, 2023, households with lower incomes will receive greater support when housing costs rise. In order to better cushion the higher housing costs resulting from rising energy costs and energy-efficient renovations, the most comprehensive reform of housing benefit to date should contain three components: firstly, the introduction of a permanent heating cost component, which should be included in the housing benefit calculation as a surcharge on the rent or burden to be taken into account, secondly, the introduction of a climate component and thirdly, an adjustment to the housing benefit formula. According to this, around 1.4 million households will be entitled to housing benefit for the first time or again; so far there are around 600,000 households. In addition, the housing benefit amount should increase from an average of around 180 euros per month to around 370 euros per month. More information Bundestag:https://t1p.de/6bmfn .Note on the changes to the Housing Benefit Act:
  • In principle, this change makes sense. Materially, it will mean that a number of top-up people will switch from SGB II/SGB XII to housing benefit.
  • But it will also mean that housing benefit authorities will receive millions of applications. They have zero staff for this. The housing benefit offices are even stretched to the limit with the current volume. Processing times of 3-6 months are now not uncommon. Significantly longer processing times are to be expected next year, as the staffing situation means that around 1.5 million new applications will not be able to be processed in a timely manner. The ability of the housing benefit offices to function must urgently be ensured here.
  • It is to be expected that job centers/social welfare offices will deny ongoing SGB II/SGB XII benefits or not grant them at all, citing the priority of housing benefit. There will definitely be a major line of conflict here next year. In terms of social law, it is completely clear: as long as WoGG benefits are not paid out, there is no income that can be offset against the SGB II/SGB XII entitlement to benefits. Here, the BA and the BMAS must make it clear through instructions that as long as housing benefit does not flow, this may not be opposed to the entitlement to basic security benefits.
  • It must be made clear through instructions that, despite WoGG entitlement and payment, a temporary need for help in the basic security systems can arise due to a claim for operating and heating costs or due to storage costs for heating materials." From theThomé Newsletter 45/2022 from November 13th, 2022 
  • For the so-called housing benefit reform, see the comments on the third relief package in the dossierFor whom inflation is a problem – and what it means for (tariff) policy
• Without money does not help solve the problem of housing shortages - it is part of the problem 
  "Last year, with great self-praise from the federal government for the state's benefit, the housing benefit was increased and the financial resources of the federal and state governments were significantly increased. In the past year, 2020, a total of 1.2 billion euros were available. The federal government argued for the increase at the time with the significantly increased housing costs and consumer prices. As a result, the effectiveness of the housing benefit decreases more and more over time. In addition, increases in income, which would only compensate for the development of consumer prices, would lead to a reduction or loss of the housing benefit The result is that the number of recipients of housing benefit and the scope of housing benefit decrease. With this argument, the focus is on subject support, in which the housing benefit is passed on to the landlords and thus the increased rental prices are legitimized or subsidized. One does not rely on property support, which specifically means the construction of social housing (…) As the name suggests, the housing market is not geared towards social needs, but rather according to the rules of the capital-oriented market economy. As a result, the market determines the prices of land, the level of rent and the price development of real estate. (…) A housing benefit that is truly needs-based must actually close the gap between real income and rent increases. The original plan when introducing housing benefit was to maintain the diversity of residential areas, prevent the formation of ghettos and stop the process of entire districts being left behind. The previous reforms were also not suitable for this.They were also unable to fulfill the requirement of full freedom of choice regarding their own apartment. (…) Above all, the federal government must get more involved again, ensure the necessary construction of apartments, show responsibility for housing policy and not just mess around with the housing benefit increase.” Post from October 30, 2021 from and at unionsforum.de 
• Rents are rising for many people and housing benefit should now be increased and strengthened again. Light and shadow of the Housing Benefit Strengthening Act 
  "... A measure for assessing the performance of housing benefit is the development of housing costs before and after housing benefit in relation to the disposable income of the households. The following proportions are shown for 2017: 36 percent before and 25 percent after taking housing benefit into account. A considerable relief for the affected households, whose average income was 970 euros per household. If you look at the trend of housing benefit households, you can immediately see the significant jumps or above These result from legal changes or a divergence in income development and income thresholds. A striking point in the time series is the year 2005 (...), because in this year the group of people entitled to housing benefit initially reduced significantly: the main cause was “Hartz IV”, which came into force on January 1st, 2005. (…) In 2016, the number of housing benefit households rose significantly again. What happened here? After seven years there was once again a housing benefit reform. The focus of the changes was to align housing benefit with the development of rents and income. Not only the increased cold rents were taken into account, but also the additional costs for hot water and heating.(…) Conclusion: Housing benefit is not only firmly anchored in the aforementioned fundamental debate about the usefulness and sustainability of measures of subject support (and the different demand for a significantly expanded property support through a revival of social housing), but the thicket of regulations within the housing benefit legal framework as well as the interfaces to neighboring security systems such as SGB II and XII make housing benefit as a component also a candidate for the basic income models demanded by very different sides Dissolving many small individual achievements into one unifying achievement speaks the word.” Post by Stefan Sell from October 25, 2019 on his homepage on the draft of a law to strengthen housing benefit (Housing Benefit Strengthening Act - WoGStärkG),Bundestag printed matter 19/10816 dated June 11, 2019 in the version amended by the Committee for Construction, Housing, Urban Development and Municipalities, cf.Bundestag printed matter 19/14135 from October 16, 2019
• How one defines away the social in a report on “social housing policy” and tries to throw an existential good onto a “market”.
  “…In view of the housing shortage, which can only be described as dramatic in some cases (see, for example, (non-)housing: The old new social question. About an explosive device in our society with a considerable splintering effect from October 27, 2015) and the rents that are becoming increasingly burdensome for millions of people (see housing conditions in major German cities: High rents bring small incomes to the brink of poverty and beyond from September 27, 2017), we are looking forward to all contributions and are full of expectation. especially if they are titled “Social Housing Policy”. But what the Scientific Advisory Board at the Federal Ministry of Economics has now presented is, to say the least, a real imposition: on the one hand, because there are massive deficits in the content that one can only acknowledge with a shake of the head, but also because, with incredible naivety and audacity, the “social” is being written out of the topic area. Let's take a closer look. (…) So you have to let that sink in first: you are seriously calling for a radical move away from social housing. This is against the background of a massive complaint about the number of social housing units, which have been declining for years - and they are increasingly needed. The opposite of the recommendation has been called for for years, i.e. a significant expansion of social housing. (…) And in addition to the attack on the pitiful remnants of social housing, the report targets and attacks a second housing policy instrument: the rent control. (…) How practical.Rents can be pushed up, because with housing benefit in line with the ideas of the real estate industry and the advisory board, this service, which is raised from tax revenue, would grow nicely. What will landlords do if such a “support” exists? (…) In this context, the report from the Scientific Advisory Board can go where it belongs. Into the mothballs.“Comment by Stefan Sell from August 29, 2018 at current social policy 
• Housing benefit does not contribute to overcoming “Hartz IV” – gross thresholds and average wages 2012
  “In order to overcome “Hartz IV” dependency, single employed people in need of help must achieve certain wage levels (gross thresholds). The opportunities for this depend, among other things, on the regional wage level (average wage). In order to make it easier to overcome Hartz IV dependency by earning income, a thorough reform of housing benefit is urgently needed, among other things…”Infographic from January 12, 2015 in the Social Policy portal 

See also:

• FAQ:What is rent control and what consequences would it have if it no longer existed? dated November 21, 2024 at the Tenants' Association
• our dossier:Rent: Almost half of households in major German cities pay more than 30 percent of their net income

The postHousing benefit: Not a solution to rent madness – but part of the problemappeared firstLabourNet Germany.