Tax plans for low incomes: Budget Day 2023

On Budget Day (Prinsjesdag) it was announced that people with low incomes or benefits will be helped by the government in 2024. Those groups in most need of financial support will be helped through a variety of schemes, for which 2 billion euros will be made available. These schemes aim to prevent any further increase in the number of people living at subsistence level. Are you struggling to make ends meet and do you want to know if the government is planning to help you? In this article aeslupa helps to explain the most important tax plans for low incomes.

Please note: the plans presented on Budget Day will only become final once the Senate has reached agreement on this, at the end of December.

Increase in allowances

As of 2024, just like last year, various allowances will increase. The following increases are planned in the budget:

Rent allowance will increase by an average of more than € 30 per month.
Child benefit: will increase by a maximum of € 750 per year for the first child, and for the second and subsequent children by a maximum of € 883. For children between 12 and 17 years old, this will be a maximum of € 400.

Labor tax credit (‘arbeidskorting’)

Low-income workers will receive a higher Labor tax credit. This should ensure that they have more net income left over from their gross income every month. The Labor tax credit will be increased by € 115.

Benefits

In order to accommodate young disabled people with a Wajong benefit, it was announced on Prinsjesdag that the previously planned reductions to this benefit will not take place. Because the double general tax credit in social assistance will not be reduced any further, all benefits will increase as much as the minimum wage in 2024. In addition, municipalities will receive a total of € 50 million which they can spend on special assistance to support low-income households.

Debts

The € 50 million that is being made available (see above) for special assistance by the municipalities can also be used to identify problem debts quickly. Hopefully preventing people from falling deeper into debt.

Does your household belong to one of the 6,500 that (unintentionally) has an income below the social security level (‘bijstandsniveau)? Then you are entitled to a municipal allowance for the next four years. After this temporary arrangement of four years, the intention is that there will be a structural solution for people living below the subsistence level.

Energy surcharge

Are you struggling to pay your utility bill? In 2024 the Emergency Fund will be extended, so that you can also Access the Fund next year. Do you want to know how to apply? Moneywood's sister-company Aeslupa explains (in English) here.

Rising costs

In addition to the above measures that should give more financial space, there are also a number of proposals that may have negative consequences. For example, the price ceiling for energy costs will be abolished, and the price of tobacco will also increase as a result of a the increase in excise duty. The increase in taxes on alcohol and fuel proposed in the Budget Memorandum was rejected by the House of Representatives at the end of October. These will therefore not increase or will increase less than initially planned.

Preparing for 2024

As mentioned, the Senate and House of Representatives still have to agree to the plans before they become final. But you may want to prepare your budget management for the coming year. Aeslupa is happy to help you with that.

Do you want to read more about Budget Day and the proposed tax plans? On this webpage you can find official information from the the Dutch Government in English.

Are you struggling to make ends meet, are you in debt or are you worried about the financial situation of someone close to you? Aeslupa can help you put things in order. Feel free to contact us.