Childcare, healthcare and housing benefit system needs reform, says PM

Prime minister Mark Rutte has told MPs he wants to scrap the current childcare, housing and healthcare benefit system and replace it with a simpler alternative.

Speaking during a debate on the childcare benefit scandal, in which some 300 families were wrongly ordered to repay thousands of euros to the tax office, Rutte said the current system needs reform.

‘Of course we don’t want so many people to be relying on benefits,’ Rutte said during the debate. ‘Talking off the top of my head, I think we have seven million people claiming healthcare benefits. And that should be able to be dealt with through salaries and the tax system.’

Childcare, housing and healthcare supplements are means-tested benefits and have been administered by the tax office since 2005. Claimants are given the money and their claims are checked retroactively against their tax returns.

Each benefit has its own income limit. For example, last year couple earning less than €37,885 are entitled to healthcare benefits, but the income limit for housing was €30,825 – and only if you lived in a rent-controlled property.

Childcare benefit is based on a sliding scale, depending on the cost of the childcare and the income of the family. Even households with an income of €200,000 a year are entitled to financial help.

The complex rules, however, mean some people who earned more than they expected end up having to pay back thousands of euros.

Tax office

Last week, finance minister Wopke Hoekstra announced plans to split the tax office into three units – tax, benefits and customs – and divide responsibility between two junior ministers.

Reforming the benefit system will be an ‘enormous job’, Rutte said. Nothing will be taboo because otherwise reform will not work, the prime minister said.

He hopes the new plans will be ready in time for the next government. The next general election is in March 2021.