Minimum wage to jump 10% next year, Pensions to rise; €14 billion for purchasing power

The government plans to increase the minimum wage by 10 percent in one go next year, and with that also the state pension. The Cabinet will push 14 billion euros into boosting purchasing power in 2023, but concluded that nothing more could be done on that front this year, sources told NOS and AD.

The Cabinet and coalition parties reached an agreement on next year’s budget during the early hours of Wednesday morning. As per tradition, details are already starting to leak to the press.

Sources close to the Cabinet told NOS that the minimum wage would increase by 10 percent next year, and the increase would happen in one step on January 1. The previous plan was to increase the minimum wage in three steps of 2.5 percent each. As the state pension (AOW) is linked to the minimum wage, pensioners will also be better off next year.

While the Cabinet does not intend to implement any significant policy changes to address purchasing power this year, there will be substantial tax cuts for citizens next year. Income tax will be cut for the lower tax brackets, government sources told ANP.

Taxes will likely rise for businesses and wealthy households to compensate. Energy companies can also expect to pay a higher mining tax as well, the newswire reported.

RTL Nieuws heard that the government would also increase the healthcare and rent allowances. The child-related benefit will also increase to fight poverty in families.

This “gigantic package” of measures must show citizens that the Cabinet knows they’re struggling under inflation and rising energy costs and takes their pain seriously, government sources told AD. The 14 billion euros dedicated to this package is double the amount the government spent on protecting purchasing power this year.

Earlier this year, Rutte IV pushed 7 billion euros into lowering energy tax, fuel levies, and the VAT on energy and giving a once-off energy allowance to low-income households.