Taking in elderly parents may become expensive
Singles with a low income, and who take in their mother or father, could feel stiff financial drawbacks to this from 2015. The lower the collective income, the more adult children and their parents will have to hand in if they start living together again.
This is according to calculations from the Federation Financial Planners (FFP), done at the request of the NOS. The figures show that families with two parents will not feel the financial burden of live-in elderly parents.
For singles, it is primarily the result of the Cabinet deal to discount the elderly on basic state pension (AOW) if they start living with their children, that will set them back. This cut also counts for benefits in the case of adults and live-in adult children.
The Cabinet justifies the cut by arguing that there is less spending on rent, energy and food when people live together. The Cabinet also wants to avoid the ability for people the pile up benefits claims, irrespective of peoples' relationships with each other. The decision has been approved by the House of Representatives. The Senate will discuss the matter on the 24th of June.
The discount will be introduced in phases from next year. Parents who decide to live with their children, will have to pay €300 a month in AOW. Now, it is also a regulation that benefits and allowances of the children decreases, which is a rough fact for single parent families.
Mothers on benefits, and their parents, will be affected the most, according to the FFP figures. Their collective incomes loss could amount to €5000 a year. Other single parents and their parents could lose €4000 a year.
The fact that singles seem to be the hardest off, is because they become fiscal partners with the parents if they decide to live together. Because of that, they will hand in supplements, tax breaks and benefits. This does not happen in families with two parents because they are fiscal partners already. They often also receive less or no benefits because they live off two incomes.
Households that live together pay less rent, which was calculated into the figures. The advantages of living together such as lower costs on food and energy, however, were not looked at by the FFP. At the request of the NOS, this was done by Nibud.
Their conclusion is that sharing the cost of living does indeed make the toll on incomes lighter. This advantage will be taken away with the new AOW-discount next year.
The National Elderly Fund emphasizes that not all living costs are shared. According to Jan Romme of the Fund, people who already live with their parents now will have several hundred less to spend in 2015. This could lead them to decide not to live together after all.