2027 Budget: 900 Million Less for Your Housing Benefit and Parental Allowance
Finance Minister Lars Klingbeil is introducing the government's draft for the 2027 federal budget to the Bundestag this Tuesday. Expenditures of 555.4 billion euros are planned. The labor and social affairs sector accounts for approximately 201.5 billion euros, keeping the social budget as the largest individual plan. At the same time, savings are to be made in several areas of benefits that directly reach low-income households.
Those primarily affected are housing benefit and parental allowance. According to budget documents, reforms to these two benefits are expected to contribute around 900 million euros to the austerity measures. The budget allocation for parental allowance will decrease from approximately 7.51 billion to 7.07 billion euros. Additionally, the federal subsidy to the health fund is set to decrease by two billion euros in 2027, and a loan planned for 2026 will be dropped. Federal subsidies for pension insurance are also on the list of cuts.
A broad alliance of social associations and trade unions is resisting this. It includes the Social Association Germany, the German Trade Union Confederation, the Paritätischer Wohlfahrtsverband, as well as Caritas and Diakonie. In their joint appeal, they state: "Those who cut social spending weaken the backbone of our democracy." The associations warn that future tax relief will not compensate for lower social benefits and higher co-payments, and they are calling for higher taxation on very high incomes, inheritances, and assets.
Important for those affected: This is currently only a draft, not applicable law. The cabinet has approved the government draft, and parliamentary deliberations are only just beginning. The budget debate does not change the housing benefit you currently receive, and no one needs to take action now.
Anyone receiving housing benefit or parental allowance, or planning to apply, should follow the deliberations in the autumn. Changes to eligibility or amounts will only become effective once a law is passed. If you are unsure, check with your local municipal housing benefit office or the state parental allowance office regarding the status of your notice.