The outline agreement 2024: consequences for people with financial difficulties

Do you receive income from social security benefits? Is your income around or below subsistence level? Then a number of things may change for you as a result of the policies that the incoming cabinet has set out in the outline agreement. Aeslupa has made an analysis of the budget appendix to the agreement, to give you some insight on how these policies may effect your wallet.

Reducing poverty

In the outline agreement presented in May 2024 by the coalition parties PVV, VVD, NSC and BBB, securing the livelihood of all Dutch people is presented as the most important objective. According to the CPB (who passed on the agreement), purchasing power will increase by an average of 0.2% per year as a result of the measures in the agreement. In addition to this, the number of people living in poverty is expected to decrease by 0.7% by 2028. To combat poverty an extra € 500 million will be made available.

Measures

In order to meet the needs of people struggling financially, the incoming cabinet has formulated a number of measures. The outline agreement contains five measures that (may) have a positive effect on the livelihoods of people with low incomes:

  1. Freezing the phasing out of the double tax credit on social assistance in the years 2025 to 2027;
  2. Setting up a financial 'envelope' fund, with a budget of up to 500 million euros for groups in trouble;
  3. The structural release of 300 million euros for the child-related budget from 2025 onwards;
  4. Increasing the housing allowance;
  5. Lowering the excess (own risk cost) on healthcare. In 2025 and '26, the current excess of €385 will be frozen. As of 2027, the excess will be reduced to 165 euros.

Although, according to the CPB, the above measures will indeed lead to greater financial security, other plans may actually have a negative effect on people with an (already) tight budget:

  • For example, disabled people will no longer receive an annual allowance for extra costs as a result of their illness or disability. This allowance will be abolished because of the reduction on the healthcare excess cost.
  • There is also a push for a reform of the unemployment benefit. Although it has yet to be clarified what that reform will look like, it is likely that efforts will be made to cut benefits, for example by shortening the maximum unemployment benefit period to 18 months.
  • If you cut back on your energy bill thanks to the net metering scheme, your energy costs will increase as of 2027. From then on, the new government intends to end the net metering scheme for small users.

Critical voices

Although - as you have read above - money is being made available for fighting poverty, critics are afraid that people with low incomes will eventually find themselves worse off as a result of the proposed policy:

Historian Han van der Horst, speaking on bnnvara remarked, that it is not sufficiently clear how the budget to ease poverty will be spent. As a result, it is questionable to what extent the positive effects will be felt. Minimum wages will not be increased and benefits will be reduced, such as the intention to shorten unemployment benefits to 18 months. Van der Horst goes on to say: "Its working people who will suffer from this – older people still do not find it easy to find work – and are guaranteed to get into debt."

From political measures to the daily practicalities:

Only time will tell how the measures contained in the outline agreement will work out for people struggling financially.  Aeslupa will keep you informed of any developments and hopes that the promise of greater financial security will be fullfilled. If you are struggling to make ends meet or know someone close to you who worries about whether he or she will be able to make ends meet: please contact us, we are here to help!