Senior staff from across the Dutch public sector will be banned by law from earning more than the prime minister from next year, home affairs minister Ronald Plasterk confirmed to MPs on Tuesday.

The ban applies to executives at housing corporations, in healthcare institutions including major hospitals and at universities, colleges and schools, Plasterk said.

The limit will apply to new appointees and the salaries of public sector bosses currently earning more than the prime minister will be reduced in stages.

The new rules, backed by the senate last year, place a ceiling of €179,000 on public sector wages. This means pay rates will go down by an average of around €50,000 a year, Plasterk said.

The cabinet first began bringing in official ceilings for public sector pay three years ago. Plasterk is to publish an evaluation of the process in December.