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At Bonaire, St. Eustatius and Saba, child allowance will be introduced. This income-independent allowance will replace the compensation through taxes, the so-called ‘children’s discount’. Due to the change, which the Council of Ministers agreed upon today, especially parents with the lowest incomes will benefit.
This way, State Secretary Klijnsma (Social Affairs and Employment) hopes to contribute to poverty reduction in the Caribbean Netherlands.
At the moment, many parents with low incomes benefit little or not from children’s discount. Who have little or no tax to pay, will obviously receive little or no discount. While these are the very people who need extra money the most.
Because of these converting problems, now parents of about 2,000 children advantage from the childrens’ discount, at a total of about 5,000 children. For all those 5000 children the child allowance will apply.
The basic principle is that no one will lose by something. To ensure this, the amount of the monthly child allowance is set at 38 USD per child (at the moment this is roughly equivalent to 38 euro’s). Most people will be better off; for others, the compensation remains the same.
The government declared the sum of 38 USD per month per child, because this is similar to the amount of money that was given to those who had maximum advantage of the children’s discount. That is the amount of the current fee ($ 1,522 per year) multiplied by the current combined tax and contribution rate of 30.4%. This amount is divided by 12 months.
The monthly fee can be adapted. If it turns out that the tax and contributions extent that the parents, compared to the old system, still would lose money, then the monthly amount will increase. Also, the amount will be indexed in the future.
The bill goes for advice to the Council of State. After this, The Senate have to approve.The proposed effective date of the new measure is January 1st, 2016.