Wednesday 15 July 2020

Fatal flaw in the benefits system

annemarie van gaalMany over fifties are playing a flawed benefits system and this means they are in no hurry to find a job, says Annemarie van Gaal.

As unemployment figures are down slightly in the Netherlands, unemployment among the over-fifties is rising. Almost 200,000 older people are on unemployment benefits and half of them have been unemployed for more than a year. According to social affairs minister Lodewijk Asscher, this presents ‘a grave and worrying problem’.

Since last year Asscher has been allocating more than €100m for schemes to get this group back in the workplace. The money is being spent mostly on networking evenings and job application courses, organised by benefits office UWV. But however much money he throws at the problem it won’t help as long as the flaw in the system isn’t rectified.


Allow me to explain, using Henk as an example. Henk is 54 and lost his job as an administrator a year ago when  the company he worked for went under. He is now on benefits, or WW.

Henks says: ‘The UWV doesn’t have a clue. Most people over fifty don’t want to go back to work.’ The flaw in the system is that most over fifties will have more money coming in on WW than if they were to start a new job. Henk: ‘We worked during the good times and every year our salaries increased. If you go back now and work for 70% of your old wages you have nothing left by the end of the month.’

The period workers are entitled to unemployment benefits depends on the number of years they have been in employment. This is another incentive for older people to remain unemployed for as long as possible. Our system is slowing down the search for work when it is important, especially for the over fifties, to find a job as quickly as possible.

Henk thinks the UWV training courses are useless. ‘At the end of the course they ask you to fill in a form and mail it to the coach who can then evaluate the results. No one wants problems with the UWV, or the coach, so we all say positive things about the course.’


Why don’t we have a look at this flaw in the system, rectify it and turn the system into a self-regulating one?

Suppose there wouldn’t be a WW but that every person were to go on welfare, or bijstand, straight away. The UWV would monitor the amount of unemployment benefits you have built up over the years which you can dip into every month if you don’t have enough to pay your fixed outgoings or want to do a course.

When you find a job the money will still be there for the next time you find yourself temporarily out of work. And when pension time comes, the UWV will give you half of what is left in the pot. That would be a much better system. It stimulates people to find jobs instead of using the benefits system for their own advantage. Who is willing to rectify the flaw?

Annemarie van Gaal is an entrepreneur and investor.

This column was published earlier in the Financieele Dagblad.







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