600 struggling families get €150 extra per month for 2 years in poverty reduction trial

For two years, 600 struggling households with welfare benefits in Zaanstad, Tilburg, and Amsterdam will receive an extra 150 euros per month with no conditions. The no-strings-attached grants are an experiment to determine not only the potential economic impact but also to measure any social and lifestyle improvements. It is an initiative of the Kansfonds project, largely financed by the Postcode Lottery, NOS reports.

Similar studies in the United States, Canada, and Scandinavian countries had mixed results. In some projects, people living in poverty who received extra money were more likely to look for a full-time job and had fewer health problems, and children performed better in school. The Kansfonds hope for similar results in the Netherlands, assuming that the extra cash will reduce stress and give participants more mental space to look toward the future.

The two-year experiment started in Zaanstad this month. Tilburg and Amsterdam will join later. After two years, the grant will gradually be reduced to zero over six months. The amount of 150 euros extra per month was chosen because it is the maximum amount that can be given without consequences for welfare benefits and allowances. The participating municipalities increased their “donation threshold” for the experiment.

The 150 participating households in Zaanstad are largely single-parent families on social assistance benefits. There is a comparison group of 150 households with approximately the same composition who won’t receive the grant.

Researchers from the Amsterdam University of Applied Sciences will use questionnaires and interviews to examine the differences between the two groups, examining health, work, education, and other forms of participation in society. A specialized agency will also carry out a social cost-benefit analysis, looking at what the extra money means for things like healthcare costs.

The Kansfonds hopes this study will stimulate the discussion about poverty and debt and how to best support struggling households. “People living in poverty know best what they can spend money on,” Bas Pick of the fund said. If there is a shortage every month, you have to tackle that first. There is then no point in focusing on behavioral change with coaches and job application training.”

Over 800,000 people in the Netherlands are living below the poverty line, and more than a fourth of them are children. The Cabinet’s measures to address this with the annual budget were criticized by a broad range of political parties in the run-up to the November election. PVV leader Geert Wilders, whose nationalist party performed best in the election, said at the time that the plans were “incredibly meager.”

Income inequality means the wealthiest 20 percent in the Netherlands live eight years longer on average, and enjoy 24 more years in good health than those from poorer households. The Social and Economic Council (SER) noted that financial problems lead to more stress and fewer hours of sleep, which has a longer term effect.

“Health problems are often the result of an accumulation of problems throughout people’s lives. Children who grow up in poverty exercise less and eat less healthy food,” the SER said earlier this year. “These causes have a direct impact on children’s school performance and, therefore, on their chances later in life.

The socio-economic government think tank, Netherlands Institute for Social Research (SCP), defines poverty as being when people do not have enough money to meet their basic needs, with enough cash left for relaxation, recreation, and “social participation,” like membership in a sports club. The SCP is very concerned about those who consistently wind up in the red, especially by about 200 euros per month.

At the same time, the often bizarrely complicated and bureaucratic social benefits system means about 170,000 households miss out on various stipends they can claim. These benefits programs vary between municipalities, but questions have been raised for years about whether the cities are equipped to handle it.