Germany's Nursing Care Overhaul: New Budget System Could Reshape How Families Pay for Long-Term Care
Published on 08/03/2026 at 03:51 | Redaktion boerse-global.de
A sweeping reform of Germany's long-term care insurance is taking shape, and its effects would ripple through the wallets of millions of families. The Federal Ministry of Health has circulated a draft bill — the Nursing Care Reorganisation Act (PNOG) — that has been on the table since late July 2026, proposing to scrap a patchwork of individual benefits in favour of consolidated budget packages.
The changes would touch everything from monthly cash payments to family members providing care, to the controversial question of whether adult children should foot the bill for their parents' nursing home stays.
What Care Recipients Would Receive Under the New System
The draft envisions folding existing benefits into three distinct pots: an in-kind services budget, a relief budget, and a community support budget. A separate bridging budget would kick in when a primary caregiver suddenly becomes unavailable, and a new care companionship service is slated to launch on 1 January 2028.
For people in care grades 2 through 5, the current cash allowance for care would be converted into the new relief budget. The monthly amounts proposed for 2027 are:
- Care grade 2: €386
- Care grade 3: €638
- Care grade 4: €889
- Care grade 5: €1,079
Those figures compare with 2026 levels of €347, €599, €800 and €990 respectively. The new budget would also absorb €42 worth of care aids and the cost of replacement care when a regular caregiver is unavailable. For grades 4 and 5, that works out to a €47 increase over the current combination of cash allowance plus aid allowance. But for grades 2 and 3, recipients would actually see a net reduction of €3.
There's a catch for those in the lower two grades: for the first three months of receiving the budget, only 50 percent would be paid out. A separate community support budget of €175 per month — or €300 for people under 25 — could only be spent on officially recognised everyday assistance services, with no option to save the money for later use.
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Financing the Reform: Who Pays and How Much
To bankroll the changes, the ministry wants to raise the contribution assessment ceiling to match that of statutory health insurance. Additional measures include a higher contribution surcharge for childless members, tighter rules on contribution-free family coverage, and — notably — applying care contributions to mini-jobs, the low-wage positions that have long been exempt from many social charges.
From 2028, benefit amounts would be adjusted annually. The digitalisation push carries a price tag of €1.6 billion, with a digital care cockpit planned for rollout between 2028 and 2030. People over 60 would see expanded prevention programmes.
The ministry projects savings of roughly €400 million in 2027 by scrapping the €131 monthly relief payment for care grade 1, effective 1 January 2027. The grade itself would remain, but the focus for that group would shift toward counselling and prevention.
The €100,000 Question: Parental Maintenance Rules Under Fire
One of the most contentious elements traces back to a draft from 5 June 2026: eliminating the €100,000 income threshold for children's maintenance obligations toward their parents in care homes. Currently, adult children only become liable for their parents' care costs once their own income exceeds that mark.
Katrin Staffler, the federal government's care commissioner, opposes a complete removal of the threshold. If it were to go, she argues for a minimum protected income of €2,650 per month, with 70 percent of any income above that shielded from claims. The Christian Democratic Workers' Association in Neunkirchen also wants the existing limit kept, warning that abolishing it could create perverse incentives. The parliamentary petitions committee has likewise deemed the €100,000 threshold appropriate.
The debate is playing out against sharply rising care home costs — the average personal contribution for residents stood at €3,364 per month as of 1 July 2026.
Industry Pushback: Capping Pay Rises Could Backfire
Care providers are sounding alarms about a separate provision that would limit how fast their compensation rates can climb. Under the plan, fee increases over four years could only outpace the base wage rate by one percentage point less than currently allowed.
Johanne Hannemann from the Association of Diaconal Service Providers (VdDD) and Thomas Greiner from the Association of Private Care Providers (AGVP) argue that providers need reliable investment conditions and more flexibility in staffing arrangements instead. Without those, they warn of shrinking bed capacity and even higher out-of-pocket costs for residents.
Other critics have weighed in from various angles. Brandenburg's health minister René Wilke and CDU care policy expert Ellen Fährmann both took issue with the relief budget plans. Home care services fear job losses from the restructuring. The social welfare association VdK criticised the changes to care allowances, while the Medical Technology Federation warned that eliminating the standalone entitlement to care aids could compromise infection protection.
The health ministry has stressed that nothing is final yet — the draft remains subject to change as it moves through the legislative process.
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