News item | 05-12-2024 | 16:26
The government wants to prevent people from running into financial problems later if they receive a higher amount of benefit advances than the benefit to which they are entitled. That is why the government is taking measures to prevent high reimbursements of benefits. One of the measures is to estimate income more realistically, which reduces the chance of a high recovery. State Secretary Van Oostenbruggen of Finance reports this in a letter to the House of Representatives.
The benefits system helps many people to pay the costs of rent, child care and health insurance. But the system also has problems. Changes in income or life events can affect the right to and amount of benefits. This may result in an amount having to be repaid afterwards. This makes the system complicated. The government therefore wants to make improvements to the system. In the long term, the government wants to reform the tax and allowance system. In the medium term, the government wants to finance childcare directly, so that childcare allowance is no longer necessary.
The government is also taking measures in the short term, of which it is now reporting 4 to the House of Representatives. The measures affect the amount of the advance and are intended to prevent high recoveries as much as possible. The measures have no consequences for the amount of the final right to benefits. With all measures, people can adjust the advance themselves if they do not agree with the change by the Benefits Department.
Increased income indexation during the annual transition
Most people receive a higher income every year. Many people do not report this to the Benefits Department. Incomes are indexed every year based on the statutory minimum wage, but the actual increase is higher for many households. As a result, the allowance is calculated as if people still have a lower income, which means that the allowance advances are too high. The Benefits Department will therefore index incomes by an additional 3% from 2025. As a result, people receive a lower advance, so that it better reflects their actual income. This reduces the risk of high chargebacks.
Use asset data during the annual transition
Households with assets above a certain limit are not entitled to housing allowance, healthcare allowance or child budget. This capital is only determined after the end of the allowance year. When these households do receive an advance, this results in high and often unexpected recoveries. To prevent this, from 2025 onwards, the Benefits Service will use data about assets to determine the amount of the advance. If a household has assets of at least € 200,000 and if assets were also known to the Benefits Service in the previous year, a benefit applicant will no longer receive an advance for housing allowance, healthcare allowance and child-related budget. If at the end of the year it appears that the assets are within the set limits, the supplement will be paid. This is expected to affect approximately 7,500 households.
Mutate pilot
If parents apply for childcare allowance for more hours than the number of hours the child actually spends in childcare, high recoveries may arise. If the Benefits Department alerts parents to this, not everyone changes the data. That is why the Benefits Service is conducting a pilot in which the childcare allowance is automatically adjusted if parents receive too much and parents do not respond to a request from the Benefits Service to adjust the advance. The results of the pilot are expected in early 2025.
Cautious advance
In addition to the 3 measures that are already in place, the Benefits Department is exploring a 4th measure. Research shows that people would rather receive too little advance first, resulting in a subsequent payment, than run the risk of a high chargeback. That is why the Benefits Department is exploring the possibility of letting people opt for a cautious advance. The advance will then be slightly lower than the amount that a benefit applicant is entitled to according to the data from the Benefits Service. In the coming period, it will be examined how high the advance can be to ensure that it is prudent and at the same time enables people.