News item | 21-02-2023 | 14:03
Anyone who pays too little AOW premium will no longer be cut for life on the AOW benefit. This is stated in the bill ‘Abolish Guilty Negligent’ that Minister Carola Schouten for Poverty Policy, Participation and Pensions is presenting to the House of Representatives today. The aim of the bill is to prevent people from being disproportionately affected if they have not fully paid the premium obligation in the past. In addition, it simplifies the implementation of the AOW for the Social Insurance Bank (SVB) and for the Tax and Customs Administration.
Everyone who lives in the Netherlands accrues state pension, with or without income. Residents who also have an income pay contributions for that AOW. If someone does not pay his or her premium, he or she will receive an additional claim with a fine on top of that. In addition, people who have paid too little premium on their retirement date will have their AOW reduced by 2% or more for life. This additional sanction will be deleted with this bill.
Minister Carola Schouten: “These are largely people with many other problems, such as health problems, financial problems, housing problems or relationship problems. A relatively small premium debt can then lead to a lower AOW benefit for life. Premiums have to be paid, and there are and will be consequences if you don’t pay them. But I also want to look at the human dimension. This extra sanction often turns out to be unjust and is also very complicated to implement.”
There are about 15 thousand elderly people who are now being reduced because they once paid too little premium. Without this change, even more elderly people will be added in the future. This sanction will be removed for both groups. The measure will cost an additional 7.1 million euros in state pension expenditure. At the same time, 1.4 million euros less will be spent on the Supplementary Income Facility for the Elderly (the AIO), which will supplement reduced AOW pensioners up to the subsistence minimum.