Chaos before the budget deliberations: cuts in housing benefit and immediate child allowance off the table

afp/epd | During the budget discussions, the black-red coalition is withdrawing plans to cut social benefits. Housing benefit and the immediate child allowance to which poorer families are entitled should largely remain in their current form, as SPD parliamentary group leader Matthias Miersch announced late on Wednesday evening after negotiations between the parliamentary group leaders in Berlin. The immediate child supplement of 25 euros per month should therefore continue to be paid, but not to families receiving asylum seeker benefits. When it comes to housing benefit, only the adjustment of the benefit amount should be suspended. According to Union parliamentary group leader Thorsten Frei (CDU), this also applies to the level of basic security.

The federal government initially introduced drastic cuts to housing benefit, which should take effect next year. The Federal Building Ministry's bill stipulated that around a third of current housing benefit households would no longer receive the benefit in the future. The others should receive less support than before. In addition, there should be no adjustment of the height.

This should save the federal and state governments more than a billion euros. 1.3 million households receive housing benefit. You can now continue to count on support. However, the performance should not be increased for at least one year.

The basic security, the so-called standard requirement, should also not be increased. Frei said that a solution would be found for the standard needs assessment law “that will keep the benefits constant until summer 2028”.

The coalition is withdrawing further planned cuts for poorer people and families. She had already backtracked on her savings plans for parental allowance and maintenance advances.

However, the reduction in electricity tax for all households promised by Chancellor Friedrich Merz (CDU) is not coming. It has not yet been possible to find appropriate counter-financing for this, said Frei.

According to the parliamentary group leaders, the start of the tax on sugary drinks should be postponed from mid-2027 to the beginning of 2028. There should be no plastic tax. In this issue, it was not possible to resolve the conflict of objectives between an ecological steering effect on the one hand and an unbureaucratic solution on the other, said Frei.

The Union and the SPD were also unable to agree on counter-financing to completely compensate for the cold progression. Relief from electricity tax and cold progression is “desirable,” said SPD parliamentary group leader Matthias Miersch. “But you have to provide solid counter-financing - and that's why we'll have to see in the next few days whether there is this counter-financing that hasn't been available yet.”

According to Miersch, the round of parliamentary group leaders from the Union and SPD should serve to clear “big chunks” in the negotiations for the 2027 budget. On Thursday, the Bundestag's Budget Committee will meet for a crucial adjustment meeting in which the final details of the budget will be clarified. The budget is expected to be passed in parliament in two weeks.