Families struggle with sudden loss of income when children become adults, Nibud finds
Families experience a sharp drop in income when a child reaches 18, as child benefits and the child-related allowance end, even as expenses for health insurance and education continue to rise, according to a report by the Nibud, the Dutch Institute for Budget Information.
Once a child reaches 18, parents no longer receive child benefits or the child-related allowance. The cut-off applies from the month or quarter after the child’s birthday, depending on the specific arrangement. Money received by the 18-year-old, including student grants and healthcare allowances, only offsets part of the gap in the family’s budget.
This abrupt change amplifies financial inequality: for some households, every euro, including money from the child’s part-time job, is crucial for paying bills, whereas other families can absorb the loss more easily. Families on social welfare face the greatest impact.
The loss of income differs in accordance with the child’s education level. A single parent with a child in college or university could lose up to 720 euros a month, while MBO students experience a much smaller financial hit, roughly 309 euros, since student grants and healthcare allowances only partially make up for the benefits parents lose.
Households frequently cover the gap by taking on extra work or making severe cutbacks, so the financial pressure they face isn’t always obvious to others. Nibud research shows that students typically face around €1,000 in monthly expenses for their studies, with costs varying by type of housing and educational level, particularly high for those living in rented rooms.
According to recent Nibud research, about 87% of 18-year-olds still live with their parents and, because of the housing shortage, they usually stay until around 24.
Parents seldom request money from their children, even if it’s needed. While they aim to help their child save for the future, expecting contributions to household expenses can actually hinder the young person’s ability to move out and live independently later.
The shift that occurs when a child turns 18 is currently too sudden, causing financial uncertainty. Nibud calls for measures to ease this “cut-off” and to ensure that parents, not just the young adults, are adequately prepared for the resulting changes.
