German Coalition Clashes Over Housing Benefit Cuts as SPD Demands Wealth Tax Instead
Published on 07/18/2026 at 07:02 | Redaktion boerse-global.de
SPD General Secretary Tim Klüssendorf has thrown down the gauntlet ahead of the summer parliamentary recess, proposing a 1% annual tax on wealth exceeding €100 million as an alternative to planned cuts in social benefits. The money, he argues, would flow to states and municipalities and could generate double-digit billions of euros. His intervention sets up a fierce confrontation with the Union, which is pushing austerity measures through the Bau- und Bauministerium (Ministry for Building and Housing) under Minister Hubertz.
The ministry’s reform package targets a €1 billion saving by tightening housing benefit (Wohngeld) eligibility. Under current plans, which take effect on 1 January 2027, roughly one in three current recipient households would lose their claim — an estimated 1.2 million households. Of those, 44% are families and 52% are pensioners. The reform would suspend the automatic adjustment of benefit levels to price rises and scrap income-linked upper limits. Critics from the SPD, Greens and Die Linke have already labelled the move a fatal signal.
Alongside the housing benefit squeeze, Family Minister Karin Prien is exploring cuts to parental allowance (Elterngeld) and a restriction on the Unterhaltsvorschuss — a state advance on child maintenance. Currently paid up to the 18th birthday, it would be capped at age 16. Some 80,000 young people would be affected, saving the federal budget an estimated €245 million.
KlĂĽssendorf has called for a detailed parliamentary scrutiny of every proposed cut, insisting the government needs to ask whether it is really saving at the right places. The SPD is outright rejecting the Unterhaltsvorschuss change, and even within the CDU some are voicing unease. The Sozialverband Deutschland (SoVD) has warned of a comprehensive dismantling of social protections, with elderly and ill people, families, single parents and the disabled most exposed.
The wealth tax proposal, however, is not entirely new territory for the SPD. Klüssendorf’s pitch — a 1% levy on fortunes above €100 million annually — has received immediate backing from the SoVD, which also wants higher contributions from corporations and the very wealthy to stabilise the social security systems. Whether the Union will entertain such an idea remains highly doubtful, but the SPD secretary has promised a hard fight after the summer break.
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