Child care costs to soar next year; Subsidies & benefits won’t cover the increase

Childcare costs will increase much more next year than the government’s allowances and subsidies due to a misjudgment. That means that despite the government working towards almost free childcare in the future, parents will have to pay more next year, RTL Nieuws reports after speaking with the Ministry of Social Affairs.

The hourly rates for childcare will rise by around 10 percent next year due to high inflation and wage increases. But the maximum hourly rate parents can receive through the childcare allowance will only increase by 5.6 percent.

The problem lies in the government’s subsidy and allowance increases being based on an estimate of inflation and wage costs increases by the Central Planning Office (CPB) in March. The CPB estimated that wages would increase by 2.3 percent and inflation would be 5.2 percent. In reality, both those figures are twice as high.

Official documents in RTL’s possession show that the government decided last month to give the Ministries extra money next year because inflation is so much higher than estimated. But, the childcare sector “does not automatically benefit in the proposed solution, because the government does not provide direct financing, but at the core, there is the same problem,” officials from the Ministry of Finance said in the documents.

The Cabinet decided that it and the Ministry of Social Affairs would look at extra price adjustments for childcare “towards spring.” But a spokesperson for the Ministry told RTL that any increases would only affect 2024. According to the spokesperson, the Tax Authority can’t adjust its systems in time to give parents higher childcare allowances in 2023. Advances for January are already paid in December, so it’s too late, the Ministry explained.

Gjalt Jellesma of Boink, the association of parents in childcare, called the explanation “completely unbelievable.” He pointed out that the Tax Authority managed to quickly set up compensation during the coronavirus crisis for parents who were not allowed to take their children to childcare. Jellesma said that low-income families would suffer most from this. People come to Boink saying they have to pull their kids out of childcare because it costs more than they get from working.