Families earning the minimum subsistence level are short up to €500 per month

The theoretical minimum subsistence level is not enough for most households to make ends meet, and must be "substantially raised," a commission tasked with evaluating the limit said in its first report. The report, released on Friday, is considered an important piece of advice for the government, which analyzes and adjusts the subsistence level every six months.

Depending on their situation, households with an income equal to that level would be short of anywhere from 50 to nearly 500 euros per month. Only a few groups have enough money to make ends meet and participate in society, including people collecting a state pension. The government defines the minimum subsistence level as "the minimum amount you need to provide for your living expenses." When someone and their partner, if they have one, earn below that level, they can receive a supplement for their income.

The Cabinet must quickly intervene, the committee said. Social assistance and the minimum wage must both be increased, "and possibly also the rent allowance." The interventions that are necessary will together cost about 6 billion euros. The government should also increase child schemes, especially for older children. The advisory report is politically important: the government has indicated that it will look at the recommendations in the run-up to the negotiations on next year's budget.

Calculations have shown that it is mainly larger families earning minimal incomes that run into problems, the committee said based on calculations conducted with budget institute Nibud and the Bureau for Economic Policy Analysis (CBP). The shortfalls also increase as children get older.

A higher social minimum should lead to greater "peace of mind" and ensure that people begin to stand on solid ground, according to Godfried Engbersen, the committee chair. He handed the report over to Minister Carola Schouten on Friday. She is the minister responsible for poverty policy.

The committee looked at four types of expenditure that households must be able to incur no matter what happens. From fixed costs such as rent to expenditure on clothing, food and personal care, including shampoo and cleaning products, but also to make sure that those with a minimum income level also have money left over for hobbies, a library membership, and a day out. With subsidies and benefits made available to households, people with the smallest bank accounts must also be able to live, and not simply survive, Engbersen emphasized.

Families also need a "flex budget" to prevent them from immediately getting into money problems in the event of financial setbacks, the committee said. A flex budget must be able to absorb shocks and thus prevent the government from having to take incidental measures to prevent large groups of households from having problems paying their bills. The committee proposed setting the flex budget at 3, 6 or 9 percent of the minimum necessary expenditure.

The maximum amount of that budget should be determined by politicians, but 3 percent is "on the low side," the committee said.

“This is an important report,” said Schouten in a statement. “We want everyone in the Netherlands to be able to make ends meet. The subsistence minimum must not only be correct on paper, but also in people's daily practice."

Schouten continued to say that the Cabinet wants to "significantly" reduce the number of people in poverty in the country. High levels of inflation have been a setback, she conceded. "In addition, we also need to take a more structural look at how we can ensure greater social security. This requires a simpler system that offers more certainties, so that people know how to find their way to the existing schemes."