Over-hasty efforts by the previous cabinet to stop paying cost of living increases to people with a partial state pension and who live abroad have led to a €300m bill for the social affairs ministry, the Volkskrant reports on Thursday.

The legislation, introduced in 2011, was found to be defective in a string of court hearings, and the department is to pay out €300m plus interest to people whose top-up payments were scrapped.

Social affairs minister Lodewijk Asscher says he will now make the payments, backdated to 2011, rather than appeal again and risk an even higher bill.

Global income

The case revolves around an inflation compensation payment which is paid to all pensioners.

Former social affairs minister Henk Kamp decided this top-up should no longer be given to people who paid tax on less than 90% of their global income in the Netherlands. This, he said, would generate savings of €120m a year.

Now the courts have ruled the payment is part of the pension system and must be paid to all people entitled to some form of Dutch state pension. The payment is a maximum €28.14 per month but is being cut to some €25 this year.

In order to qualify for a full state pension (AOW), foreign nationals must have lived in the Netherlands for 50 years by the time they reach the age of 65.

This means most immigrants only qualify for a partial pension. For example, if they have worked 30 years in the Netherlands, they are entitled to 60% of the state pension.

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