The municipality of Hoogeveen wants to expand the rules for minimum wage policy. People who earn up to 120 percent of the social assistance standard must be able to use minimum wage schemes such as special social assistance and collective health insurance.
For years, Hoogeveen used an upper limit of 110 percent. With the change, the municipality hopes, among other things, that people on benefits will not suffer when they start working, the so-called poverty trap.
The poverty trap is caused by the fact that people who go to work are no longer allowed to use certain schemes, which means that on balance they are worse off. “The basic principle is that work must pay and we want to encourage our residents to work where possible,” the municipality says.
Hoogeveen sees that more and more people are having a hard time financially. “The energy crisis and high inflation in recent years show that many people are struggling to keep their heads above water,” the municipal council wrote in a letter. “The (minimum) income and social assistance appear to be inadequate for a large group of people and middle-income earners also regularly encounter problems.”
By expanding the rules for minimum regulations, the municipality hopes to remove stress from residents with a low income and thus improve health. The Client Council had advised the municipality to expand the arrangements to 120 percent.
In Hoogeveen, approximately 2,600 households currently fall within the standard for minimum schemes. Due to the expansion, the target group is expected to grow by 25 to 30 percent by 2027. This is expected to cost around 2.2 million euros more in that year. It is part of a larger multi-million package to combat poverty.