Additional parental leave more expensive for people with minimum wage: report
Taking additional partner parental leave is more expensive for people who earn minimum wage, than people with an average income due to tax effects, NRC reports based on its own calculations.
Since July last years, partners are entitled to not only a week of fully paid parental leave after the birth of their child, but can also take five weeks of 'additional partner leave' at 70 percent of their salary. This is paid by benefits agency UWV.
For most people, this parental leave results in a 20 percent net loss of income. But for the lowest incomes, the loss is about 30 percent. This is due to tax effects - for people with an income around minimum wage, the "employee discount" tax benefit falls much faster if their gross income decreases than for people with average incomes.
This disadvantage is greatest for people that earn around the minimum wage of 1,701 euros per month. After that, the disadvantage decreases gradually to an income of about 10 percent above the minimum wage.
A spokesperson for Minister Wouter Koolmees of Social Affairs acknowledged to the newspaper that people with low incomes have "relatively less benefit from the additional partner leave". But they added that minimum wage earners can make use of other schemes, like the child budget an allowances.
In the second half of 2020 - the first six months that this additional partner leave was available - almost 29 thousand people made use of the scheme. That's about 20 percent less than the UWV expected. In that period about 87 thousand babies were born in the Netherlands, according to Statistics Netherlands.
In the first half of this year, the UWV received almost 40 thousand additional partner leave applications.