Wealthy Dutch to benefit most from billion euros energy price cap
The largest part of the billions of euros the government is pushing into the energy price cap will end up with the richest households. 22 percent of the money will go to families that earn about 100,000 euros or more per year, BNR reports based on a study by data company Springco Urban Analytics.
Wealthier households tend to live in larger houses and use more energy, so they also receive more of the subsidy, Springco director Hank Groenhof explained. High-income households will get an average of 246 euros per month from the government, while low-income households will get 167 euros per month.
The energy price cap is intended to help struggling households who can’t afford sky-high energy prices. “But more euros of aid are going to the richest households. While this group can absorb the extra burden much better by reducing unnecessary expenses,” Groenhof said to BNR.
Even with the price ceiling, over 75 percent of households with an annual income below 20,000 euros live in energy poverty - they spend more than 10 percent of their net income on energy. In 2020, that applied to only 20 percent of these households. Without the price cap, over 90 percent of low-income families would live in energy poverty.
The International Monetary Fund (IMF) urged governments to only provide temporary and targeted support to the most vulnerable households. Otherwise, they risk pushing inflation even higher. Klaas Knot, president of the Dutch central bank DNB, also spoke out against the energy price cap, which applies to everyone. “It is very clear: support must be temporary, targeted, and covered in the budget,” he said earlier. “But that ‘target’ in particular seems difficult for finance ministers to find.”
Minister Sigrid Kaag of Finance previously told RTL Nieuws that the price cap would definitely be temporary. If energy prices remain high after next year, the government will only support the people who really need it, she said.
