Minimum wage, benefits increase won't help people with debts

The Cabinet’s measures to improve people’s purchasing power in the face of high inflation will not immediately help many people with debts, social counselors warned. The minimum wage will increase by 10 percent in January, and social benefits will rise along with it. But for people with debt payment plans or wage garnishments, that extra money will go directly to their creditors, the counselors said to NOS.

The problem is that the seizure-free rate - the minimum amount that people with debts need to live on - is not automatically adjusted, the social counselors said. That happens once every 12 months, and a request for adjustment can only be submitted after January 1.

“Given the rising energy prices and the increasing price of groceries, this is a very undesirable situation,” said Andre Moerman of the National Organization for Social Counselors (LOSR). The money goes towards reducing people’s debts, which is a good thing. But they also won’t have any extra money available to cover their increasing expenses.

People with debts can request for the seizure-free rate to be increased themselves. But if every person does that, the implementing authorities will be flooded. Benefits agency UWV and the Social Insurance Bank alone have wage garnishments registered for 60,000 people on benefits.

The social counselors, therefore, ask the Ministry of Social Affairs to automatically increase the seizure-free rate for everyone. The Ministry told NOS that the LORS request is sympathetic, but the Ministry will first have to look into the implementation, the red tape, and how to handle people with varying incomes.