No reduction in pension for old age pensioners in ‘cost-sharing’ households

Single old age pensioners who share a household with their son or daughter will retain their entitlement to the highest rate of old age pension. In its Spring Memorandum the government announced that its planned ‘cost-sharing norm’ would no longer be introduced. Scrapping the measure will cost €214 million, which will be made available on a structural basis.

The State Secretary for Social Affairs and Employment, Jetta Klijnsma, had previously delayed the introduction of the cost-sharing norm: ‘I’m very pleased that this measure can now be scrapped rather than simply postponed,’ she remarked.

Single old age pensioners who have built up full pension rights are entitled to 70% of the statutory minimum wage. Married or cohabiting couples are entitled to only 50% of the minimum wage each, since they are able to share the cost of housing and other expenses. In the last coalition agreement the government set out plans to reduce spending on pensions by extending the lower rate to single pensioners who share a household with their son or daughter.

The government promised parliament that it would not introduce the cost-sharing norm until it had a clear picture of informal care arrangements in households that include a pensioner. Since it is not possible to establish clearly whether the measure would have an impact on the care provided by children for elderly parents or by elderly parents for children that need it, the government has opted not to introduce the measure after all. Single pensioners sharing a single household with their son or daughter will therefore retain their entitlement to the highest rate of old age pension.