Housing benefit is financial support aimed at tenants and property owners to reduce their housing costs. According to the federal government, two million households in Germany have been entitled to housing benefit since January 1, 2023. But what requirements do you have to meet for this? More on this in the following post.
What is housing benefit?
Housing benefit is state financial support in Germany that serves to relieve the burden of housing costs on low-income people. It is paid to tenants or owners who, due to their financial situation, have difficulty meeting their own rent or costs for self-occupied living space. Housing benefit is usually paid out monthly and must be applied for at the responsible housing benefit office.
Housing benefit in Germany can be applied for in two different forms to meet different needs of citizens: housing benefit for tenants, also known as rent subsidy, and housing benefit for owners, also known as burden subsidy, the federal government said in an online post.
Housing benefit for tenants, or rent subsidy, is aimed at tenants of an apartment or room. Its purpose is to provide support with rental costs, as it goes on to say. On the other hand, there is housing benefit for owners, also known as burden subsidy. It is aimed at the owners of an owner-occupied property, be it a house or a condominium. The purpose of this assistance is to help with the burdens associated with ownership, such as loan repayments or property taxes.
The new housing benefit Plus
The “Housing Benefit Plus” represents a comprehensive expansion of the previous housing benefit regulations, which came into force on January 1, 2023. This reform aims to reduce the housing cost burden for low-income households, particularly supporting families, single parents and seniors. According to the federal government, the number of recipients of housing benefit has expanded from 600,000 to around two million households, which includes around 4.5 million people. A key feature of this reform is the increase in housing benefit. On average, housing benefit will increase by around 190 euros per month, more than doubling the previous amount, the federal government continued. The exact amount of housing benefit is calculated individually and is based on factors such as household size, housing costs and the total income of the household members.
Another important aspect is the introduction of a permanent heating cost component and a new climate component in order to reduce the burden of rising heating costs and housing costs due to modernization measures, as the article states. These components are intended to provide a flat-rate subsidy to provide financial relief to households receiving housing benefit. The housing benefit reform also includes a new determination of rent levels based on more current data as well as a simplification and acceleration of the receipt of housing benefit, including the possibility of provisional payment. To apply for housing benefit, those interested can contact the housing benefit offices in their municipality, city, district or district administration. In addition, many federal states offer the service of submitting applications for housing benefit online via their websites. In order to take regional differences in rent prices and the level of income into account, the seven rent levels play an important role.
The seven rental levels
The Housing Benefit Act provides for seven rent levels in accordance with Section 12 WoGG. The rent levels are an instrument that evaluates the local rental price in comparison with other districts and cities across Germany, with the rent levels ranging from 1 (cheapest level) to 7 (most expensive level), as wohngeld.org explains in an article.
In rent level 7, which affects cities and municipalities such as Munich, housing costs are highest, which leads to a higher entitlement to housing benefit. The rent level therefore has a direct influence on housing benefit, as it sets the maximum amounts for rent and income depending on the number of household members, continues wohngeld.org. For example, in rent level 2, the rental costs for a one-person household may not be higher than 521.60 euros, and the income may not exceed 1,405 euros after deducting all allowances. For a two-person household in rent level 2, the rental costs may not be higher than 587.40 euros and the income may not be higher than 1,896 euros. There are tables for the rent levels that are calculated differently depending on the federal state and region.
The conditions for housing benefit
In order to apply for housing benefit, certain requirements must be met.
First of all, income plays a crucial role. The household’s monthly income cannot exceed a certain limit. The gross income is considered here, from which various allowances and flat rates, such as compulsory social security contributions, may be deducted t online in an online post. For example, the upper income limit for a one-person household in rent level one is 1,372 euros, but for a two-person household in rent level three it is 1,976 euros. The same applies here: the higher the rent level and the number of people in the household, the higher the upper income limit. It is advisable to use the Ministry of Construction’s housing benefit calculator to find out whether you are eligible for housing benefit.
Assets are also included, although up to 60,000 euros for a single person and a further 30,000 euros per additional household member are not taken into account, according to the federal government. The rent levels mentioned above are also relevant. Depending on the rent level and the number of people in the household, there are certain maximum rent amounts that may not be exceeded. In addition, the applicant must live in the apartment in question and the rental costs must correspond to local conditions.
Citizenship or a corresponding residence permit is also an important criterion. The applicant must either be a German citizen or have a valid residence permit that entitles permanent residence in Germany.
Students who are not covered by their household’s full BAföG entitlement are entitled to apply for housing benefit. Finally, it should be noted that there is no entitlement to housing benefit if you are already receiving other social benefits that cover housing costs, such as unemployment benefit II or social benefit, as the federal government finally reports.
Editorial team finanzen.net