Big reform: The new housing benefit brings so much – pensioners and families benefit particularly

Created: 11/18/2022 8:57 am

By: Wolfgang DePonte

After the housing benefit reform, more households are now eligible.

© Andrea Warnecke/dpa-tmn

Inflation is weighing on many low-income citizens.

The housing benefit will be reformed on January 1st.

We've got the rundown of everything you need to know.

Munich - Life is getting more and more expensive.

In order to relieve the burden on citizens with an already low income, the housing allowance will be reformed on January 1, 2023.

More people are then entitled to more money.

This is good news for many, especially in expensive regions like Munich.

Citizens with a small income or a small pension can count on a subsidy from the state from next year.

Because on January 1st a reform of the housing allowance is to come into force.

The Bundestag has already agreed and the Bundesrat is also expected to say yes at the end of November.

You can apply for the new as well as the old housing benefit at the municipality or in the district office.

How big the support is, what requirements you have to meet – here are the most important details.

Who will benefit from the reform

According to the Federal Statistical Office, around 600,000 households in Germany have received housing benefit to date.

The reform is expected to increase that number to two million.

Pensioners already make up around half of the housing benefit recipients at around 50 percent, and this proportion could increase as a result of the reform.

In addition to many seniors, families in particular should benefit from the new housing benefit, so far it has been about small household incomes.

According to experts, the lower middle class should also benefit in the future.

Incidentally, the state also pays housing benefit as a rent subsidy to residents of old people’s and nursing homes.

How much are the grants

For people with a small pension or a low income, there is a lot of money at stake.

According to the law, the housing benefit increases by more than 100 percent - from the current average of 180 euros a month to 370 euros a month - which results in 4400 euros a year instead of 1960 euros.

The aim of the law is for households to have to spend an average of no more than 40 percent of their pension or income on housing costs.

So far, this proportion has peaked at a good 50 percent, especially in a city like Munich.

How the housing allowance is calculated

Whether you get the subsidy depends on the city you live in and how high the rents are there.

The number of people living in a household and the overall net income of the household also play a role.

From 2023, the upper income limits will be raised significantly.

Federal Building Minister Klara Geywitz said: Anyone who earns the minimum wage or receives a pension of this amount should definitely benefit from the reform.

Assuming a minimum wage of 12 euros per hour, that would be a gross income of around 2080 euros.

also read

One-time payments for families, tenants, owners: there is so much money from the state now

Up to 1500 euros inflation premium: traffic lights are planning new help – pensioners should also get money this time

What role does the rent play?

Upper limits also apply here – depending on where you live.

As before, all cities and municipalities are divided into seven rental levels.

Munich is one of the highest: Here, the maximum rent of 788 euros applies for a two-person household (at the lowest level it would be 420 euros).

What about the heating costs

This year there was already a heating cost subsidy of 270 euros for housing benefit recipients.

From 2023 there will be another 415 euros for a one-person household, for two people it will be 540 euros - and for each additional person in the household another 100 euros each.

Important: The heating cost subsidy is automatically transferred to housing benefit recipients, an application is not necessary.

In future there will be a fixed heating cost component of EUR 2.30 per square meter as a surcharge on the rent.

Our free business newsletter provides you with all relevant business news on a regular basis.

Click here for registration.

Where are the income limits?

"By expanding the benefits, the maximum income limits up to which there is a claim for housing benefit are shifting upwards," explains Ralph Henger, an expert on housing policy at the German Economic Institute.

A single household in expensive Munich, for example, may have a maximum monthly gross income of 1797 euros.

With the new regulation it is 2301 euros.

According to the IW, the gross maximum income for a four-person household in Munich increases from 3,697 to 5,077 euros.

The net income limit increases from 1188 euros to 1541 euros.

Who is excluded from housing benefit

Anyone who receives Hartz IV or, in future, citizenship benefit, basic state security or student loans does not receive housing benefit because these benefits already include money for accommodation.

What applies to owners

Around 90 percent of those receiving housing benefit are tenants, but owners can also apply for help in order to be able to pay loans, for example.