Political Deadlock Deepens Over German Nursing Reform as SPD Demands €5.5 Billion Repayment
28.06.2026 - 09:05:25 | boerse-global.de
Germany’s planned overhaul of its long-term care insurance system is stuck in a coalition standoff. The Social Democratic Party (SPD) has refused to back a government draft until it sees a financial equalisation mechanism between statutory and private nursing insurance — and until the federal state repays roughly €5.5 billion that was taken from the insurance fund during the Covid-19 pandemic for non-insurance-related expenses.
The block threatens to delay the reform, which was originally scheduled for cabinet deliberation in June. Parliamentary consideration is now not expected before autumn 2026, pushing possible implementation to the turn of the year 2026/2027. Health Minister Nina Warken has defended the package, calling the financial crisis a “sanitation case that was foreseeable” and pushing back against criticism of the planned cuts.
Deficit Projected to Exceed €20 Billion by End of Decade
The nursing insurance fund is deeply in the red. Its expenses for benefits already reached €70 billion in 2025. Without corrective action, the annual deficit is forecast to hit €7.5 billion in 2027 and surpass €20 billion by the end of the decade.
The government’s countermeasures include higher contributions and tighter rules. The contribution rate for childless individuals will rise from 4.2% to 4.3%. The contribution assessment ceiling will be raised, bringing in an estimated €1.6 billion in its first year. Employers will soon be required to pay nursing contributions for minijob holders. From 2028, the system will also restrict the contribution-free co-insurance of spouses.
Benefit Cuts Hit Mildest Care Level Hardest
People classified with care level 1 — the mildest category — face the most severe reduction. Their monthly relief allowance of €131 is to be eliminated entirely. For care levels 2 and 3, the allowance will be halved during the first three months after classification.
Family caregivers will also take a hit. The nursing fund currently covers their pension insurance contributions; those payments will be reduced to 70% of the previous level. The cost of this benefit has ballooned from under €1 billion for roughly 400,000 caregivers in 2016 to around €5 billion for 1.6 million people in 2024.
The threshold for moving to a higher care level is being raised. Reassessments will be permitted only after six months. That single measure is expected to save €2.6 billion.
Social Groups Condemn “Burden Package”
Welfare organisations have reacted sharply. The GKV-Spitzenverband, which represents the statutory health and nursing insurance funds, and the German Nursing Council both criticised the plan as socially unbalanced. AWO president Kathrin Sonnenholzner called it a “burden package” for people in need of care and their families.
A particularly contentious point is the delay of planned care subsidies for nursing-home residents. Those subsidies will now kick in only after a six-month lag, even as residents’ average out-of-pocket costs in homes reached €3,245 per month in 2026.
Separate from the stalled reform, new rules that took effect on 1 January 2026 have already improved conditions during hospital stays: nursing allowance continues to be paid for up to eight weeks, and from care level 2 upwards, a joint annual budget of €3,539 is now available for respite care and short-term nursing.
