Benefit system overhaul too complex and will cost money: ministers

Plans to replace three separate low-income family benefits for housing, healthcare and children by a single household payment are ‘too complex’ and have been put on hold.

Social affairs minister Lodewijk Asscher and junior tax minister Eric Wiebes had hoped to simplify the current benefit system which critics say is inefficient and expensive.

Almost two-thirds of Dutch households get some sort of benefit via the tax office and total payouts are over €1bn a month. The ministers had also hoped to add a new benefit for care of the elderly to the package.

Extra spending

However, overhauling the system and replacing the three benefits with a single payment is so complicated that it will cause major problems and could lead to an increase in spending, the ministers said.

Originally, Asscher said the reforms would cut €1.2bn from government spending.

Ministers will now look at an alternative reform plan. In addition, they will have to find other money to compensate for the €1.2bn which will now not be cut from the budget.

Reforms

Last week, the ruling VVD said the Dutch tax system needs a radical overhaul to remove the plethora of tax incentives and benefits and focus instead on raising money for the treasury.

And last year, a government commission recommended simplifying the tax system by reducing the number of deductibles and merging housing, health and child benefits into a single payment.

The ministers hope to come up with a new package of recommendations by mid-2015.

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