The very lowest incomes in the Netherlands have improved considerably over the past two and a half years. After an alarming report was published in June 2023 about the spending capacity of people around the Netherlands, politicians clearly improved their position. This is evident from calculations by budget institute Nibud at the request of NRC.
But the way in which politicians have done this, by increasing allowances, has actually made their income more uncertain. People who live around the subsistence minimum receive an increasing share of their income through benefits, the calculations show. And the unpredictability and inaccessibility of the benefits system actually contribute to financial instability.
This not only concerns people on social assistance benefits (currently 1,370 euros per month for a single person), but also, for example, workers who have the same income level because they work part-time for a low wage.
Hundreds of euros short
Reason for NRC to engage Nibud were two recommendations from 2023 of the social minimum, of which Nibud itself was a part. This authoritative committee of experts concluded that almost all groups living on social assistance level had insufficient income for their necessary expenses and to participate in society. They often fell short by hundreds of euros per month, the committee wrote.
In a report, the same committee found that income schemes in the Netherlands are “too unpredictable and too inaccessible”, partly due to the recovery of benefits. It must be simpler and more certain, the committee said.
NRC wondered what happened to the recommendations. It now appears that the first report has received far-reaching follow-up. But the risks from the second report have actually increased because many people have become more dependent on benefits.
High recoveries
This increased dependency is “very vulnerable,” says Cora van Horssen, interim director of Nibud. If people miscalculate their expected income in advance or make a mistake, they risk hundreds to thousands of euros in refunds. The higher the surcharges, the higher the recoveries can be.
In addition, says Van Horssen, . Some people are so afraid of refunds that they would rather have a certain, low income than a higher income that you may have to partially hand in. The government does not reach those people by increasing benefits.
The two trends that Nibud has observed are well illustrated by the example of a single welfare parent with three children. Two years ago, such a parent was short 407 euros per month for the necessary expenses and social participation, but now they have 102 euros left over.
The spending capacity therefore increased considerably. But now half of his income, 48 percent, consists of uncertain benefits. Two years ago that was 46 percent, and another four years earlier it was 40 percent.
For a couple on social assistance with three children, dependence on benefits rose from 29 percent six years ago to 38 percent now.
Nibud director Van Horssen finds it explicable that politicians increased allowances significantly in a short time. The expert committee simply showed “major deficits” and politicians wanted to eliminate them. “The allowances are the easiest way to quickly and specifically support certain groups.”
At the same time, it is remarkable because both the Rutte IV cabinet and the Schoof cabinet expressed the ambition to make income schemes simpler and more secure. Reforms in that direction have hardly begun.
Shortages partly eliminated
Nibud made calculations for eight types of welfare families. They did not include local poverty regulations, because they differ greatly per municipality.
All shortages have been eliminated for single people and single parents (up to three children). Where two years ago they were still short of around 50 to 400 euros per month, they are now 10 to 250 euros short.
Couples who have two, three or no children are still short: 14 to 109 euros per month. However, that gap has narrowed by several hundred euros in two years. Couples with one child are now slightly ahead: 4 euros.
An important note: these calculations show a theoretical reality, says Van Horssen. “You must apply for all the arrangements to which you are entitled. And you should not have bad luck, such as when you are forced to live in an overpriced rental home or in a poorly insulated house.”
The calculations also assume that you do not have to pay off debts, do not smoke and spend your money very rationally. “There is no room for impulse purchases,” says Van Horssen. “You can’t go to the supermarket at five o’clock with a bit of an appetite. If you make purchases that were not on your list, the financial picture almost no longer fits.”
However, as the Social Minimum Committee has recommended, a ‘flex budget’ has been reserved for incidental setbacks, such as a high dental bill.
Nibud also made a calculation without this flex budget, which is 98 euros for a single person. Then all eight household types will have money left over each month (105 to 355 euros), where two years ago seven out of eight were short.
But according to Van Horssen, the flex budget is essential. “If you have to live on a low income for a long time, there is a good chance that you will encounter setbacks. The flex budget gives a very small amount of leeway to absorb this.”
Also read
The government can raise the majority of Dutch people above the poverty line. Then why doesn’t it happen?
NEW: Give this item as a gift
As an NRC subscriber you can subscribe every month 10 items give as a gift to someone without an NRC subscription. The recipient can read the article directly, without a paywall.
The journalistic principles of NRC