Cabinet starts designing new childcare system to replace allowances

The Cabinet, together with four executive organizations of the government, is starting to design a system that should replace the high childcare allowances. Construction of the system announced in the coalition agreement should start from July next year. The system is expected to come into effect on Jan. 1, 2025.

The plan is ambitious, acknowledged Social Affairs Minister Karien van Gennip. The scale of the operation is apparent from the fact that not only the Education and Benefits Executive Agency –– formerly part of the Tax and Customs Administration –– is involved, but also the Social Insurance Bank (SVB) and benefits agency UWV. Expertise from all these organizations is needed, Van Gennip said.

One organization will ultimately be responsible for implementation, but it is not yet certain which club that will be. A new operator may be established.

Three ministries, Social Affairs, Education and Finance, are also collaborating on the design and consultations are taking place with a number of interest groups and the Association of Dutch Municipalities (VNG). In the new system, the government will pay 96 percent of childcare, which will go directly to the childcare organization.

Van Gennip said that it will be quite a job, also because the demand for childcare will increase with the new system and there are already major staff shortages. The shortage on the labor market is also causing problems for the implementing organizations themselves, which are busy and have many vacancies.

It is important that the new system is implemented on time, as the allowance scandal has exposed problems with the childcare allowance. In the scandal, it was found that parents receive high amounts of money in advance and, if it turns out afterwards that they were entitled to a lower amount, they have to pay back a lot of money.

The government also hopes that a successful design of a new system can serve as a "blueprint" for other operations. Ultimately, the government wants to find an alternative to the entire allowance system.