Dutch government's current policy will increase poverty: Planning offices

If the current cabinet policy is not changed, poverty in the Netherlands will increase by more than a quarter in the coming years, from 5.3 percent to 6.8 percent of the population living below the poverty line, according to a report released by social and cultural planning office SCP and central planning office CPB on Thursday.

Over the past few years, the current government policy resulted in a decrease in the number of people living in poverty. But if it remains unchanged, poverty will increase from 2021. This is mainly due to the annual decrease in social assistance benefits, implemented in 2011 to make it more attractive for people to work. But from next year it will result in an increasing proportion of people on benefits falling below the poverty line, according to the planning offices. 

The annual decrease in benefits is currently fixed until 2035. If it is reversed from next year, the risk of poverty for benefit recipients will decrease by almost half in the future, the planning offices calculated.

The SCP and CPB analyzed 40 policy options to combat poverty. Other options include increasing the employed person's tax credit for low incomes, or investing consistently in training, health and employability in the long term. Introducing a basic income will decrease poverty in the Netherlands by 60 percent, the planning offices said, but this will cost a lot of money and result in a sharp decrease in the labor supply.

This study did not include the economic effects of the coronavirus crisis, because the long term consequences of the pandemic are still very uncertain. The study was done in the run-up to the parliamentary elections in March 2021, to help political parties draw up their election programs.