The new Dutch coalition government revealed its plans for the next four years last Friday, and some of the ideas have already generated major opposition. Here is a round-up of the main controversies affecting people’s pockets.
Social security
The biggest change planned for the social security system is to halve the length of time people who lose their jobs can claim unemployment benefit, from two years to one.
People claiming WW would get 80% of their former salary for two months, rather than 70%, and then 70% for the rest of the period. But labour market experts told the Financieele Dagblad that the Dutch jobs infrastructure is not ready to cater to people who need a new job quickly and that the new government is “shooting itself in the foot”.
Moreover, people who have been doing a job for five or 10 years cannot simply move to a new one, Piet Fortuin, chairman of trade union federation CNV, told the paper.
Utrecht University professor Robert Vonk told the FD that cutting WW payments will be a big issue in the next round of pay talks between unions and employers. “They will be looking for solutions for that missing year,” he said.
State pension
At the moment, the state pension (AOW) rises by eight months for every 12-month increase in life expectancy and is now 67 years and three months. The new administration wants to increase the state pension age by a full year for every year life expectancy rises.
Calculations by broadcaster NOS suggest that this would push up the retirement age for someone born in 1973 by six months, to 68 years and six months, for example. And, the coalition says, it would save €2.7 billion a year.
On average, the Dutch now stop work around the age of 66, but in 2000 that was just 61, following the abolition of early retirement schemes. The Dutch average retirement age is now the second highest in Europe.
The unions have already criticised the proposal, describing it as unfair to people now approaching retirement age who have worked hard their entire lives. They also point to the impact on people doing physically demanding work.
There is, however, one advantage for the Netherlands’ foreign residents. To qualify for a full state pension, you must have lived in the country for 50 years, and this will give international workers a little more time to build up pension rights.
Healthcare
The cabinet wants to save €10 billion a year on healthcare, and this is likely to be one of the most controversial issues facing the new administration.
Of this, €6 billion will come from increasing the own-risk element in health insurance from €385 to €460 in 2027 and then increasing it in line with inflation. The contribution was last increased in 2016 and would be €525 if it had risen in line with inflation since then, according to the Volkskrant.
Health economists say this measure will benefit people who make little or no use of the healthcare system, but that people with chronic health conditions will be hardest hit.
A further €2 billion will be “found” by doing more to help people remain living at home, but also by reintroducing payments for home helps for wealthier pensioners and making them contribute towards the cost of home nursing services.
The new cabinet also wants to raise €1 billion by cutting spending on care services that are not effective and ending payments for medicines such as paracetamol, which are available over the counter.
In addition, some payments that are not covered by insurance, such as dental treatment or taxi trips to hospital appointments, will no longer be tax deductible.
Freedom contribution
The coalition’s plans envisage that everyone will contribute an extra amount of money towards increased spending on the armed forces and meeting the new target of 3.5% of GDP on defence spending.
That money will be collected via income tax, by not increasing tax bands and deductions fully in line with inflation. The “freedom contribution” will cost industry €1.7 billion a year and households €3.4 billion – an average of €425 a year per household.
“People don’t see that they are paying more tax, so it does not hurt as much,” tax adviser Cor Overduin told the Telegraaf.
What the opposition is saying
The next administration will be a minority cabinet and that means it will have to look for support from opposition parties in both houses of parliament to pass legislation.
D66 leader Rob Jetten, poised to be sworn as the next prime minister, has offered an “outstretched hand” to all the parties represented in parliament and some commentators have described the coalition agreement as a “starting point” for new negotiations with the opposition.
GroenLinks-PvdA leader Jesse Klaver has already slammed the plans to cut WW, raise the state pension age and increase the healthcare own-risk payment, saying they need “drastic changes”.
The far-right JA21 has not yet reacted in detail and more will become apparent during Tuesday’s debate.
The far-right BBB has said it will go all out to oppose the increase in the state pension age, which it described as coming “out of the blue”. Jan Struijs, the sole member of 50Plus, pointed out that the new pension system coming into effect next year includes a provision to temper the increase in the state pension age.
Geert Wilders, leader of the far-right PVV, has dismissed the entire agreement as “dramatic”, while SP leader Jimmy Dijk said his party would not accept the coalition’s “outstretched hand” when it comes to cutting healthcare and social security.
