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German coalition reportedly agrees on sugar tax, care commission
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Germany's governing coalition of the CDU/CSU Union and SPD has reportedly reached a final agreement on introducing a sugar tax and on the mandate for a planned care structure commission, according to RND and dpa citing a cabinet draft. The sugar tax would apply from July next year at 26 cents per liter for drinks with at least five grams of sugar per 100 milliliters, and 32 cents for those with eight grams or more, with exemptions for producers under one million liters annually. Projected revenues are 690 million euros in 2027 and 925 million in 2028. The care commission, chaired by Georg Cremer and Gabriele Kuhn-Zuber, would examine limiting rising co-payments in care homes and, at SPD request, review models for including privately insured people in financing statutory care, though the term 'care cap' is not used. The commission has 13 experts and a broad mandate to stabilize care insurance finances.
Source report
Bundeskanzler Friedrich Merz (CDU) und Lars Klingbeil (SPD), Bundesminister der Finanzen — Quelle: Michael Brandt/dpa
According to a media report, the CDU/CSU and SPD have reached a final agreement on the introduction of a sugar tax and on the planned care commission. The compromise on the sugar tax reportedly provides for a two-tier tax as well as exemptions for smaller manufacturers, the Redaktionsnetzwerk Deutschland (RND) and dpa reported on Tuesday evening, citing a draft for the cabinet meeting on Wednesday that was made available to them.
The draft also reportedly shows that the coalition partners have settled their dispute over the mandate for the planned care commission.
Sugar Tax Details
According to the reports, the sugar tax will apply from July of next year to sugar-sweetened beverages with a sugar content of five grams per 100 milliliters or more, at a rate of 26 cents per liter. From eight grams, a rate of 32 cents would apply.
Manufacturers producing less than one million liters of sweetened beverages per year would be exempt from the tax, RND reported, citing the cabinet draft. In 2027, the tax is expected to generate 690 million euros for the federal government. For 2028, 925 million euros are planned, followed by around 880 million euros annually thereafter.
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Care Structure Commission
According to the report, the planned "Pflegestrukturkommission" (care structure commission) is also to address, at the SPD's request, a "limitation" of the sharply rising personal contributions in care homes. However, this is merely a review mandate. The term "Pflegedeckel" (care cap), used by the SPD, is not mentioned in the draft from Health Minister Carsten Linnemann (CDU).
The draft reportedly describes the "mandate with timetable" of the care structure commission on three pages. In September, the coalition pushed through initial steps after negotiations that ran until shortly before the cabinet meeting; the law is primarily intended to stabilize care finances in the short term. Among the plans is an increase in contribution rates for childless individuals by 0.3 percentage points as of January 1, 2027. The commission is to prepare a second, far larger structural reform.
Personal Contributions to Be Limited
The experts are to be tasked with presenting "concrete, implementable proposals for the short-, medium-, and long-term, sustainable stabilization of the financial situation of long-term care insurance." According to the government draft, the goal is "a good balance between personal provision and solidarity-based protection." Care finances are under pressure, among other things, due to the ever-increasing number of people in need of care.
A limitation of personal contributions is to be examined — as is a supplement through capital-funded elements in care. This is reminiscent of the planned capital pillar in the pension insurance system. In the future, too, people should have "appropriate partial coverage for the case of care," according to the document. Full coverage for the case of care is therefore still not planned. Younger generations are not to be "overburdened" by the financing. Additional private coverage is to be made as "attractive" as possible.
13 Experts on the Care Commission
According to the report, the commission is also to examine the SPD's demand to involve privately insured individuals in financing statutory care. However, the wording in the cabinet draft is very general: "The commission will examine models for constitutionally compliant social compensation mechanisms and make proposals," RND quotes. To this end, the commission is to present proposals "within and outside the system of care insurance."
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According to the reports, the commission is to comprise a total of 13 experts. The chair is to be held by the former Secretary General of the German Caritas Association, Georg Cremer, and the President of the Catholic University of Applied Sciences for Social Work (KHSB) in Berlin, Gabriele Kuhn-Zuber.
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German Cabinet Backs Two-Tier Sugar Tax on Sweetened Drinks From July 2027