Child allowance instead of tax reduction

The Second Chamber of the Dutch Parliament is in favour of turning the current tax reduction for families with children on Bonaire, St. Eustatius and Saba into a permanent child allowance (kinderbijslag), writes The Daily Herald. A majority of the Second Chamber on Thursday voted in favour of the motion of Member of Parliament (MP) Carola Schouten of the ChristianUnion in which the Dutch government was asked to look into the possibilities next year of converting the amount that families with children can deduct from their income/ wage tax to a general child allowance. Schouten submitted her motion during the handling of the 2014 draft budget of Social Affairs and Employment in Parliament on Tuesday.

According to Schouten, the introduction of the child allowance on the three Caribbean Netherlands islands is highly necessary because many families are living in extreme poverty. The allowance, which does exist in the Netherlands, would especially benefit the children of low-income families, Schouten stated. The current tax reduction for children (kinderkorting) is of insufficient help to low-income families.

Dutch State Secretary of Social Affairs and Employment Jetta Klijnsma responded to Schouten’s motion during the continuation of the budget handling on Wednesday. Klijnsma said that she didn’t plan on introducing a child allowance prior to the general evaluation in 2015. “We agreed to implement a five-year legislative break between 2010 and 2015 so we could have a good look at how the instruments work on the islands. That is what we are doing. We will check in 2015 what it would mean to introduce a child allowance on the islands,” said Klijnsma. In the meantime, the Ministry of Social Affairs and Employment has freed up funds, 600,000 euros in total, for the combating of poverty in Bonaire, St. Eustatius and Saba, said Klijnsma. These funds, agreed upon during Caribbean Netherlands Week in October this year, were “necessary for additional input” to combat poverty, said the state secretary.

Schouten, clearly disappointed about Klijnsma’s answer, said the state secretary saw the poverty with her own eyes during her visit to the three islands this summer. “We can talk about a legislative break, but we are talking severe poverty. If we wait until after the 2015 evaluation, it will almost be 2017 by the time we have run the course to implement a child allowance for the islands. That doesn’t help the people who are currently in this situation.” Schouten urged the state secretary to look into the possibilities of converting the tax reduction for families with children to a child allowance before the 2015 evaluation.

Klijnsma wouldn’t budge. She said she was willing to consult with the local governments about raising the minimum wage. “On Saba, for example, we can raise the minimum wage a little bit. That helps the people who live there,” said Klijnsma, who pointed out that an increase of the minimum wage also has a positive effect on the AOV pension allowance and the social allowance “onderstand.”

“That barely helps those families with children. Some people have no job or their jobs are so small. Are we not obliged to do something for the islands when we, in the Netherlands, are talking about getting our children out of poverty,” responded a discontented Schouten.

MP Sjoerd Potters of liberal democratic VVD party voiced his concerns about increasing the minimum wage and the effect of that on the social allowance on the islands. He stressed that it was important to remember the location of the islands. “We are talking about a level that suits the rest of the region, not about the level of the Netherlands,” said Potters. Apart from the VVD, Party for Freedom PVV and independent member Louis Bontes, a majority in Parliament agreed that Schouten had a point and the other parties, including the Labour party PvdA, said yes to the motion when it goes to voting on Thursday.