The Federal Office for Building and Regional Planning

Research Project: Evaluation of the 2016 housing benefit reform

Project briefing

The study has analysed the development of housing benefit (Wohngeld) in the period 2009 to 2015 and presents the resulting need for reform (including ex ante expectations). An ex post impact analysis of the 2016 housing benefit reform was also conducted. Furthermore, the regulations on reference rent bands (Mietenstufen) and the maximum amounts for rent and burden (Höchstbeträge für Miete und Belastung) were analysed.

Background

Housing benefit helps low-income households to finance adequate and family-friendly housing. It is paid so that lower-income households with incomes above the subsistence welfare system level (Grundsicherung) can bear their housing costs.

On 1 January 2016, the housing benefit reform came into force with various im-provements in benefits. For example, the table values (amount of housing benefit) were increased, the maximum amounts for rent and burden in the reference rent bands were raised and higher allowances, deductions and lump sums were granted. In addition, the reference rent bands were redefined regionally. These improvements benefit households that had already received housing benefit before the reform and households that are now entitled to housing benefit for the first time because their income was previously too high to receive housing benefit (so-called "ingrowers"). However, households that were previously dependent on benefits under Social Code Book II and Social Code Book XII also benefit from the housing benefit reform (so-called changers).
It was expected that around 660,000 households would benefit from the housing benefit reform. Among them would be about 200,000 households that will receive a housing benefit for the first time or again as a result of the reform. Therefore, a considerable increase in housing benefit expenditure was expected.

Objective

The aim of the project was the evaluation of the housing benefit reform that came into force on 1 January 2016. The focus was on the economic analysis of the individual reform components and their effects and the question of whether the effects have been achieved in line with expectations. Based on the development of recipient numbers, benefit levels, coverage for different target groups and total expenditure on housing benefit since 2009, the study has analysed whether the intended objectives have been achieved. The extent to which households switch between housing benefit and the benefit systems of subsistence welfare (Grundsicherung) according to Social Code Book II and Social Code Book XII was also evaluated.

The effects of the reform in terms of the housing cost burden (Wohnkostenbelastung) were examined as well as regional effects (reference rent bands and maximum amounts for rent and burden). Overall, this will determine the extent to which expenditure and take-up after 2009 can be explained (solely) by economic developments and other factors, and how expenditure and the number of recipients are like-ly to develop further. Recommendations for the future design of the housing benefit law were also derived.

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