II. Social security and income policy

People who can work should not be relying on benefits. People who through no fault of their own are unable to find work are assured of receiving assistance at the level at least of the guaranteed minimum income. We want to keep it this way. That is why we will actively tackle abuse and fraud, and benefit schemes will be organised so as to keep them viable and accessible as demographic ageing increases and the labour force shrinks.

Everyone must contribute, to the extent that they are able, to paying the bill for the crisis. In other words, the higher people’s income, the more they will be asked to contribute. We will also tackle the poverty trap. Work must pay, and therefore we must increase the financial difference between being on benefit and working by reducing taxes for those who work. There will be changes in how health care is financed: health care insurance contributions and excess conditions will be means-tested. We will make more funds available for poverty reduction.

  • The age of retirement will gradually be raised to 66 in 2018 and 67 in 2021, and will subsequently be linked to rises in life expectancy.
  • A transitional scheme will be devised for people who as of 1 January 2013 are participating in an early retirement or pre-pension scheme and have not been able to make provision for the raising of the retirement age. The transitional scheme will apply to participants whose income does not exceed 150% of the minimum wage and will feature a partner and assets assessment (which excludes home ownership and pension capital). Should it prove impossible in practice to introduce the transitional scheme before 1 January 2013, it will have retroactive effect to that date. We are in discussions with the pension funds on the scope for bringing pension payments forward to bridge the gap.
  • Employees on a low income and aged 61 to 65 will be eligible for a bonus if they continue working. This will allow people who continue working to save in order to offset the financial impact of the raising of the retirement age that enters into force in 2013. On the basis of a retirement age of 67 in 2021, those who continue working until the age of 65.5 will on average be able to retire 1.5 years earlier without losing out financially. Employees become eligible for the continued-employment bonus if they earn 90% of the statutory minimum wage. The maximum bonus amount is payable to employees earning 100%-120% of the minimum wage. Employees earning more than 175% of the minimum wage are not eligible for the bonus.
  • Pension payments to cohabiting partners under the General Old Age Pensions Act (AOW) will be equated with those to married couples.
  • The cutbacks imposed on the general old age pension in respect of persons who do not receive a full AOW pension will be withdrawn.
  • The partner’s allowance applicable to those entitled to a general old age pension will be restricted as of 1 July 2014. If the partner of a person entitled to an old age pension has not yet retired and both partners’ combined income exceeds €50,000 (excluding old age pension), they will no longer receive the partner’s allowance.
  • Means testing based on household income will be replaced by a test based on household benefits. This will ensure that benefits cannot be accumulated within households, giving households on benefits a higher income than their working neighbours. Equally, by excluding wages from the calculation we also ensure that it pays to go out and work. 
  • To encourage those receiving benefits to find or get back to work, everyone will now be required to work and reintegrate, and to do something in return for their benefits, as far as they can. There are no longer any categorial exemptions. Individual exemptions will be temporary and relate only to the obligation to work. A permanent exemption from the obligation to work and reintegrate will be granted only to those who are fully and permanently incapacitated.
  • We are examining whether we can make working longer hours pay better by applying a criterion based on number of hours to income schemes.
  • The Work and Social Assistance Act (WWB) will be amended: municipalities will have to stop paying social assistance benefit for three months if the obligation to seek work is not met. Benefit will be resumed only upon application by the person concerned.
  • Enforcement will be tightened to improve compliance with obligations under the WWB. The obligation to work and the duration and amount of the associated penalties will be made uniform. Harassment or abuse directed at the officials responsible for managing these schemes will result in the immediate withdrawal of benefit. This measure will apply to the entire social security system.
  • Individual crisis payments to reimburse actual costs incurred will be expanded. There will be an extra focus on families with children, employees on low incomes and senior citizens with small pensions. There will also be more scope for assistance in the form of supplementary healthcare insurance or a pass providing access to cultural, social or sports facilities. It is important for children from families on low incomes to be able to take part in sport. Therefore, the grant awarded to Jeugdsportfonds Nederland will be extended and the Sportimpuls grant scheme will be increased. People who have to get by on a permanently low income with no prospect of improvement will receive an allowance on an individual basis. Categorial payments to cover plausible costs will be restricted. €100 million will be made available on a permanent basis to fund this entire package of measures.
  • Surviving dependants’ benefit will be limited to one year in new cases. Within that year, recipients can seek employment with the help of existing instruments. No obligation to reintegrate applies to them.
  • We are reforming and introducing savings in the existing arrangements for children. The aim is to simplify the system, increase labour market participation and offer income support where it is needed most. The existing nine schemes for children will be reduced to a maximum of four. Two will be jointly aimed at income support (General Child Benefit Act and the Means-tested Child Allowance Act) and two at encouraging labour participation (income-dependent combination tax credit and childcare benefit).
  • The employed person’s tax credit will be increased by an amount rising to €500 per employed person per year by 2017.
  • There are few countries, if any, whose old age pension provisions are as robust and fair as those of the Netherlands. Our policy with regard to the AOW and supplementary pensions is aimed at safeguarding these provisions for younger generations. We are therefore taking the measures necessary to guarantee the affordability and long-term viability of the AOW and supplementary pensions, particularly given that demographic ageing is proceeding rapidly and a slight drop in the labour force is expected.
  • It is a socially accepted norm that anyone who works for 40 years should in principle be able to save for a pension equal to 70% of their average salary. The Witteveen Framework, the statutory framework governing tax-advantageous pension-saving arrangements, will be based on this norm. This will mean a drop of -0.4% in the
  • accrual percentage.
  • If a person’s income exceeds €100,000 (three-times the average income) it will no longer be possible to accrue pension in a tax-advantageous manner.