News item | 17-02-2023 | 13:30
Minister De Jonge for Housing and Spatial Planning has submitted the bill ‘Simplification of the rent allowance’ to the House of Representatives. The proposal makes rent allowance simpler and available to a larger group of low-income tenants. For example, the cabinet is abolishing the maximum rent limits as a condition for the allowance, abolishing the subsidy for service costs and lowering the age limit at which young people are eligible for rent allowance from 23 to 21 years. The standardized rents from the previous proposal have been scrapped.
Minister De Jonge: “Many people who live in social housing are partly dependent on rent allowance to be able to pay their rent. Unfortunately, there are also tenants with a low income who are forced to rely on a rented house in the private sector and are therefore not entitled to a supplement. With these measures we simplify the allowance and more tenants with a low income are entitled to rent allowance. In this way we help all tenants with a low income through the housing benefit.”
The bill Simplifying the rent allowance contains the following changes:
- Lowering the age limit for full rent allowance from 23 to 21 years.
- Abolition of the maximum rent limits as a condition for rent allowance.
- Abolition of subsidizing service costs.
- Increase in monthly personal contribution by € 4.
No standard rents
The coalition agreement has expressed the ambition to abolish the allowances, so that people no longer get lost in the complicated schemes or receive high refunds. It has been agreed that the first steps will be taken in this direction during this government’s term of office and that the rent allowance will also be reformed and simplified to this end. Part of this was that the rent allowance would be switched from a system of actual rents to standardized rents. The advice of the Council of State, the implementation test and the previous consultation show that the standardized rents only provide limited simplification in the long term, while there are concerns about the negative income effects, especially in the current economic situation. That is why the government has decided to remove the part of the standardized rents from the legislative proposal and not to implement this part of the coalition agreement in this way. However, the aim of the reform remains as important as ever. The government is therefore looking into how an (alternative) reform of the rent allowance will bring this goal closer.
Lower age limit and abolish maximum rent limits
The age at which a tenant is entitled to full rent allowance will be lowered from 23 to 21 years. As a result, this age limit is the same as the age limit of other schemes, such as the statutory minimum wage, and young people are more likely to be entitled to full rent allowance. In addition, the government has opted to abolish the maximum rent limits as a condition for receiving rent allowance. Currently, this all-or-nothing criterion leads to boundary discussions that affect both the tenant and the Benefits department. By removing this condition, more tenants with a low income but a rent that is too high will be eligible for rent allowance.
No reimbursement of service costs and an increase in the personal contribution
In order to facilitate the implementation of the housing allowance, the government is abolishing the allowance for eligible service costs. As a result, less data needs to be requested and checked. The measure also ensures greater clarity with other rental policies. This is more understandable for tenants and reduces the risk of errors in the rent allowance application. In addition, the monthly personal contribution of the rent allowance will increase by € 4.
116,000 new housing benefit recipients
Currently, approximately 1.5 million households receive rent allowance. The simplification of the rent allowance will add 116,000 new entrants who are not entitled to rent allowance in the current situation. They will gain an average of € 172 per month. For more than 1 million households, the rent allowance will be reduced by a small amount. This is about € 10 per month on average. This is mainly due to the increase in the personal contribution of € 4, which applies to all rent benefit recipients, and for some of the recipients due to the abolition of the allowance for service costs. With the introduction of this bill, the housing benefit budget will be increased by more than 150 million euros.