Inequality worsened by shifting poverty measures from national gov't to local councils

Municipalities’ greater role in providing income support for financially struggling residents has unintentionally led to more inequality between citizens, the National Institute for Budget Information (Nibud) concluded in a study requested by municipalities themselves. People in similar circumstances receive more support in one municipality than another and that is very “difficult to explain,” Nibud said.

“Municipalities have been given an awful lot to deal with since 2015,” Nibud director Arjan Vliegenhart said, referring to the decentralization of care making municipalities responsible for mental health- and youth care, among other things. “We see that they are doing a great deal to provide their residents with financial support where necessary. At the same time, they also have to make choices about what they can and cannot do. This sometimes leads to differences between municipalities that are difficult to explain.”

Nibud looked at the low-income support policy of 20 municipalities in 2023 and found major differences between municipalities, both in terms of amounts and conditions for support. There are also differences between municipalities on conditions for certain, national schemes.

The budget institute used the energy allowance in 2022 and 2023 as an example. This allowance was regulated by law and, in principle, should be provided at the same income level and under the same conditions. But in one municipality, residents were eligible with an income of up to 120 percent of the social minimum, while in another municipality, it was up to 150 percent. “In one municipality you did not receive an energy allowance if your income was 130 percent of the minimum, in the other municipality you did. Just explain that,” Vliegenhart said.

Nibud suggested a new balance between the central government and municipalities when it comes to poverty policy. Return the frameworks for the same income support and facilities to the central government so that municipalities can focus on tailor-made solutions for residents who still fall between the cracks, Nibud said.

“The fact that, despite the national nature of a scheme, you receive a lower amount in one municipality than in another does not match the fact that all low-income households are entitled to the same basic facilities,” Vliegenhart said.