Childcare allowance reform will take longer than we think

Peter Kavelaars, Professor of Fiscal Economics at Erasmus School of Economics
Erasmus School of Economics

The childcare allowance affair is a consequence of false suspicions of fraud with childcare allowances and strong recoveries by mistakes. This has led to the resignation of the entire cabinet-Rutte III. Now it is up to cabinet-Rutte IV to introduce a new system for childcare allowances. Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, explains in EenVandaag (8 February 2022) why this new system will be introduced later than we think.

The cabinet-Rutte IV has agreed to introduce a new system for childcare allowances. In the old system, parents pay for the childcare and receive an allowance from the state afterwards. The plans of the new cabinet state that in the new system the state will pay the allowance to the childcare directly. It is still unclear how the new plans will be implemented specifically. The Dutch Labour Party wants childcare to be free, while the current coalition only wants to pay 5% of the costs for childcare. 

Whatever the implementation may be, Kavelaars fears that this new system will not be introduced before 2025. This is based on a report of the ministry of social affairs and employment. In this report, it is stated that the creation of a new system will take at least three to four years, in part due to inadequate IT services of the Dutch tax authorities.

The Professor argues that if it is up to the Dutch tax authorities, the introduction of the new system will thus be postponed. Therefore, politics should apply pressure on the tax authorities and, if necessary, hire additional people who can work on this project. Kavelaars warns that this will be costly, since experts in the field of IT are scarce and therefore very expensive.


Peter Kavelaars, Professor of Economics of Taxation
More information

The full item from EenVandaag, 8 February 2022, can be found here (in Dutch).

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