Dutch state’s debt collectors making life worse for vulnerable citizens: Court of Audit

People who already have a hard time repaying their debt and who have to repay money to the national government often find themselves in deeper financial distress because their repayment plan does not take sufficient account of the basic level of income they need to survive. The collection policy at the Belastingdienst is one such example. The Dutch tax office aims to ensure that citizens have enough money left over to live on, but in practice this is by no means always the case, the Court of Audit said in a report last week on payment arrangements with citizens.

A tailor-made payment arrangement plan is possible for vulnerable citizens, but the three largest creditors of the national government fall short with these arrangements and the Court of Audit finds this "worrying.” In addition to the tax office, these are the CJIB, which collects traffic fines, and the Central Administration Office (CAK), which implements financial regulations in the healthcare sector. Both the Belastingdienst and the CJIB are handling 20,000 citizens who have agreed to a customized arrangement.

In addition to them paying too little attention to the daily living allowance, the research shows that there is little clarity about the possibilities allowed in a repayment scheme. For example, this can often be spread over a much longer period than the organizations themselves even realize. It is a “missed opportunity,” said the Court of Audit, also because the application of overly strict regulations make it less possible for those involved to repay the money on time.

At the CJIB, almost half of the tailor-made agreements are not paid on time. Over a third of custom repayment plans are not achieved at the Belastingdienst. The organizations also do not take into account situations when someone is in debt to multiple government organizations and businesses.

The more standard payment arrangements are going well, the Court of Audit said. The communication about this is clear and it leads to the majority of the debt being paid off. According to the Court of Audit, this is important because it concerns large numbers of citizens: an average of 165,000 people per year are involved in a standard repayment scheme with the Belastingdienst, and more than 122,000 people with the CJIB. As a result, the debt is paid off in 71 percent of cases, resulting in millions of euros reaching the treasury.

Minister Carola Schouten, who is responsible for debt management, said in a response that she believes that a personal arrangement should help people and not make the situation worse. She wants the subsistence minimum to always be guaranteed in a payment arrangement and is discussing this with public and private creditors.

She also pointed out that government organizations are working on jointly offering a single payment scheme, so that it can be better geared to someone's personal situation. The CJIB, CAK and DUO have recently started working together, and Schouten hopes that other government organizations will join.