Living allowance is a state benefit that supports low-income households with their housing costs. With the 2023 living allowance reform, the benefit was fundamentally revised to give more people access to it. A further increase in living allowance is due from January 1, 2025. This article provides an overview of the current changes, how to apply, supplementary benefits and related living allowances.
For applicants who wish to receive a rent subsidy, it is crucial to understand what is legally covered by the term “rent”. According to Section 9 of the living allowance act. (WoGG), rent includes the remuneration for the provision of living space, whether through rental, subletting or comparable usage agreements. The rent is not limited to the pure monthly rent, but also includes allocations and surcharges, such as costs for water, waste disposal or stair lighting. It is irrelevant whether these payments are made directly to the landlord or to external service providers.
Certain costs are not taken into account as rent for the rent subsidy. These include:
Costs for heating and hot water systems and district heating costs
Subletting surcharges paid by the tenant to the landlord
Charges for the use of washing machines, refrigerators or furniture provided by the landlord
Rent shares for living space that is sublet or used for commercial purposes
Payments for the use of a garage, parking space or garden
Please note: It is important that the rent is derived from the rental agreement or supplementary documents (e.g. letter of increase) and can be verified.
On January 1, 2025, living allowance was increased to compensate for rising rent and energy costs. This increase follows the living allowance reform introduced in 2023, which significantly expanded the group of beneficiaries. The aim of the reform is to ease the financial burden on more households and enable them to remain in their homes.
2023 living allowance reform introduced a heating cost and climate component. The heating cost component takes rising energy costs into account and provides targeted relief for low-income households. The climate component is intended to help make energy-efficient renovated homes more affordable. This will primarily benefit tenants in residential buildings that have been converted to sustainable energy.
An important aspect of the reform is the so-called dynamization of living allowance. This is an automatic adjustment of the benefit in line with rent and income trends. This dynamization is intended to prevent the living allowance from losing purchasing power due to inflation or rising rents, thus ensuring that it remains an effective support for those entitled to it in the long term.
The Federal Government is legally obliged to submit regular reports on the development of living allowance and rents. These reports serve as a basis for political decisions on the adjustment of housing assistance. Among other things, they contain data on the number of living allowance recipients, average rental costs and the effects of the respective reforms.
Living allowance can be applied for from the relevant authority in the respective city or municipality. The application can be submitted in any form, including by e-mail. However, proof of income, rental costs and household composition etc. must be enclosed. The obligation to provide evidence is very extensive.
Do you still need to apply for living allowance? With our living allowance calculator from LeistungsLotse, you can quickly and easily check whether and how much living allowance you are entitled to. Check now!
In addition to living allowance, there are other state benefits related to housing costs. These include:
Basic income support in old age and in the event of reduced earning capacity: People with a very low income can receive living allowance in addition to basic income support.
Child supplement: Parents on a low income can apply for child supplement in addition to child benefit and living allowance.
Parental allowance: The amount of parental allowance that exceeds the minimum amount (300 euros for basic parental allowance or 150 euros for parental allowance plus) is counted as income.
In addition to living allowance, there are other measures to promote housing. Social housing assistance provides affordable housing for low-income households. In many cities, there are special rent control programs to ensure affordable housing.
Another option is cooperative housing, where tenants are also members of a housing cooperative. This offers long-term housing security and often cheaper rents than on the open housing market.
Living allowance is an important support for low-income households and will be increased again from 2025. The reforms of recent years, including the heating cost and climate component as well as dynamization, ensure better adjustment to rising housing costs. In addition to living allowance, there are supplementary benefits such as basic income support or child supplement. In addition, social housing subsidies and cooperative housing offer further opportunities for affordable housing. Applications can be submitted to the relevant authorities, sometimes online. Regular reports from the federal government help to make the necessary adjustments. Those who inform themselves in good time can make the most of financial relief. In this way, living allowance will remain a central pillar of housing assistance in the future.
Do you still need to apply for living allowance? With our living allowance calculator from LeistungsLotse, you can quickly and easily check whether and how much living allowance you are entitled to. Check now!
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