In a significant move aimed at providing tax relief for commuters, the Union and SPD have announced plans to increase the commuter allowance starting in 2026. As outlined in their recently finalized coalition agreement, the allowance will rise to 38 cents from the very first kilometer traveled, regardless of the mode of transportation used.
Currently, the commuter allowance stands at 30 cents per kilometer for the first 20 kilometers of the journey from home to work. Only from the 21st kilometer onward can commuters claim 38 cents per kilometer. This change is expected to ease the financial burden on those who travel long distances for work, allowing them to deduct a larger portion of their commuting costs from their taxable income.
The decision to adjust the commuter allowance comes as part of a broader coalition agreement between the CDU, CSU, and SPD, which has been in the works since the federal elections last year. After nearly six weeks of negotiations, the parties reached a consensus on various key issues, including pension levels, minimum wage, and immigration policy.
During a press conference held on April 9, 2025, CDU leader Friedrich Merz, SPD co-chair Saskia Esken, and CSU chairman Markus Söder presented the details of the coalition agreement. This agreement must now be approved by the respective party members before it can be formally signed, paving the way for Merz's election as Chancellor in the Bundestag.
One of the significant points of the coalition agreement is the commitment to legally enshrine the current pension level at 48 percent of the average wage in Germany. This measure is intended to provide stability and security for retirees in the coming years, with the aim of maintaining the purchasing power of pensioners.
Esken highlighted the plan to increase the minimum wage to 15 euros, further emphasizing the coalition's focus on improving the financial well-being of workers. "We are committed to ensuring that hard work is rewarded fairly," she stated during the conference.
The coalition also addressed the ongoing debate surrounding cannabis legalization. The partial legalization of cannabis, which came into effect on April 1, 2024, will remain in place for the time being. This law allows for the possession and controlled cultivation of cannabis for personal use, albeit with certain restrictions, particularly regarding public consumption.
In an effort to evaluate the government's response to the COVID-19 pandemic, the coalition has proposed an inquiry into the measures taken during the crisis. This inquiry aims to analyze the effectiveness of the restrictions imposed and to derive lessons for future health emergencies. "We must learn from our experiences to better prepare for any future pandemics," noted Merz.
On immigration policy, the coalition has agreed to implement a repatriation offensive, which will include measures to tighten the current regulations. This includes the controversial decision to abolish the accelerated naturalization process that allowed particularly well-integrated immigrants to gain citizenship after just three years. Instead, the waiting period for standard naturalizations will be reduced from eight to five years, while dual citizenship will still be permitted.
Additionally, refugees with limited protection status will face restrictions on family reunification, as they will no longer be able to bring family members to Germany for two years unless in exceptional circumstances. This move has drawn criticism from various advocacy groups who argue it undermines the rights of vulnerable populations.
The coalition has also announced plans to tighten the current citizen's income scheme, implementing stricter sanctions for those who fail to meet job-seeking requirements. This new approach is part of a broader strategy to encourage employment and reduce dependency on state support.
In a notable shift in military policy, the coalition intends to introduce a new military service that will initially be based on voluntary participation. Drawing inspiration from the Swedish model, the government aims to create a service that is attractive and meaningful to young people.
Furthermore, the coalition plans to establish a National Security Council within the Federal Chancellery, aimed at coordinating integrated security policies and enhancing the government's ability to respond to national crises.
The coalition agreement has sparked discussions among party members, with votes scheduled to take place in the coming weeks. The SPD will conduct a membership vote, while the CDU will decide at a small party conference. The CSU is expected to approve the agreement through its board.
If all goes according to plan, the election of the Chancellor and the swearing-in of the new cabinet could occur as early as May 7, 2025, marking nearly six months since the previous coalition led by the SPD, Greens, and FDP collapsed in November 2024.
The coalition agreement reflects a comprehensive strategy aimed at addressing various pressing issues facing Germany, from economic stability to social justice and security. As the parties move forward, the focus will be on implementing these measures effectively and ensuring that they resonate with the electorate.
