It does not seem to work well to compensate people with a lower income for the sharp rise in energy prices. First, the cabinet introduced the reduction of VAT on energy from 21 percent to 9 percent. That shot of hail will save all households in the Netherlands about 140 euros one-off in energy bills in the coming six months. In addition, the cabinet will introduce a one-off energy surcharge of 800 euros for low-income households.
For inscrutable reasons, the payment of this allowance has been placed with the municipalities. All 344 municipalities must now draw up their own policy for this and build an app on their site with which residents can apply for the allowance via their DigiD. A kind of occupational therapy for civil servants.
Financial risk
Another problem is that many municipalities see the energy surcharge as a financial risk: they fear that the costs of the surcharge will not be fully reimbursed by the government. It makes a difference that Minister Carola Schouten has now guaranteed that municipalities will receive sufficient compensation for the payment of the energy allowance, but the perverse effect that subsequently occurs is that the amount left over from the allowance ends up in the general funds of the municipal coffers.
It is therefore attractive for municipalities not to be too generous with this allowance. Schouten urgently calls on the municipalities to pay the energy surcharge of 800 euros to all households with a maximum income of 120 percent of the social minimum. For a single person that comes down to a gross income of 1,500 euros.
Most people on social assistance benefits have now automatically received the allowance into their account, but low-income workers and old-age pensioners have to apply for it themselves. Many municipalities struggle with setting up a digital system for this; they report that residents still have to wait a while before the allowance can be applied for. In The Hague, the site went down due to the large number of applications. It is foreseeable that the implementation costs of this operation will be many times higher than the total amount of allowances paid.
Calculate yourself
The conditions for the energy surcharge also differ per municipality. Some municipalities state the maximum income for the allowance as net amounts per month, including holiday pay. Like Roermond, where a single maximum
1,310 euros is allowed to earn the allowance of 800 euros. The Hague has increased the allowance to 900 euros and states on the website that everyone who earns a maximum of 130 percent of the social assistance standard is eligible for this. The residents of The Hague have to calculate for themselves what amount that is.
In Amsterdam, a single person may have a maximum annual tax income of 20,878 euros (1,740 per month gross) to be eligible for the supplement, but the equity may not exceed 6,200 euros. Calculating with the fiscal annual income also makes the allowance accessible to self-employed workers with an irregular income; but outside Amsterdam they are therefore excluded.
As a single person in Leiden, you can have a maximum net income of 1,245 euros per month. With or without holiday pay, that is unclear. Single parents are allowed to earn more in Leiden than elsewhere, up to a maximum of 1,601 euros.
Perform nationwide
One thing is clear: many people with a low income will never receive that one-off allowance of 800 euros: it is organized far too complicated. It does not generate a lot of trust in the government. Therefore, from now on, have these kinds of schemes implemented nationally, via one clear counter with clear conditions. The NOW scheme was also not financed via the municipalities.
It would be even better to target the policy specifically at those who really get into trouble due to the high energy prices and to look for structural solutions. For example, by introducing a social tariff for energy, as in Belgium, and by strongly targeting people with a lower income who live in outdated houses when making homes more sustainable.
Annemarieke Nierop works for the Wiardi Beckman Foundation and is a councilor in Heiloo.