Purchasing power of vulnerable households is lower due to calculation error, compensation costs 66 million

Due to a calculation error by the Ministry of Social Affairs and Employment, the calculated purchasing power of vulnerable households was lower than intended. The outgoing ministers Karien van Gennip (Social Affairs, VVD) and Carola Schouten (Poverty Policy, CU) reported this on Friday. Households of single people on social assistance or who live on the minimum wage, among others, will receive a rent allowance increase of 36 euros per year.

About 200,000 families are eligible for the increase. The outgoing cabinet incidentally allocates 66 million euros to correct the error, which comes from the SZW budget. From next year, the intention is that the increased rental allowance will be structurally paid for by a small increase in the first tax bracket.

The increase “doesn’t seem like much money for an average household, but if you live in poverty, a tenner makes a lot of difference,” Minister Schouten told the ANP news agency. “That is also the reason why we have now done everything we can to take a step here.” According to the minister, action must therefore be taken to repair the damage, “Especially when it concerns a group of people where every euro can make a difference.”

The error occurred when preparing the budget in August. The government then wanted to increase the purchasing power of low and middle incomes, but this “made an incorrect assumption in the computer model”, according to Social Affairs. The error should have been corrected manually by officials, but that was not done.