Low-income households too dependent on temporary benefits: Nibud

Dutch people with low incomes are too dependent on temporary allowances. The Nibud warns of this, according to new calculations of purchasing power based on the Million Note. "A single welfare recipient could get by this year with all the temporary measures and no setbacks, but if that person has 72 euros less available next year, he or she will be short of money every month," says director Arjan Vliegenthart.

Nibud, the National Institute for Budgetary Information, has calculated that most Dutch households will have more money available next year than this year, due to wage increases and increases in social assistance and the minimum wage. However, the elimination of the energy subsidy means a loss of purchasing power for the lowest-income households. For example, Nibud expects that the purchasing power of a single welfare recipient will drop by 4.3 percent in 2024.

“This government has faced all sorts of unexpected events, such as the war in Ukraine and skyrocketing inflation. Yet it has done a lot to help low-income households. Still, these calculations show that the reliance on (temporary) allowances is actually too high," Vliegenthart indicates.

Nibud's calculations also show that families with several children benefit from the changes in the children's budget. Their purchasing power increases by amounts between 50 and 370 euros. Even a two-earner household with three children and an income of 135,000 euros is still entitled to child benefits because the amounts have been significantly increased. "One can ask whether this is desirable," argues the Nibud director.

In addition, tenants who are entitled to housing allowance will benefit from the increase in the maximum rental allowance next year. On the other hand, the temporary increase in the long-term care allowance that applies this year will expire next year. That would relieve low-income households by 30 to 50 euros a month. "We see larger shifts within the allowances than in other years. Some allowances are going up while others are going down. It's good to take that into account," Vliegenthart says.