At a joint press conference with Commissioner Chris Johnson on Monday evening, State Secretary of Social Affairs and Employment Jetta Klijnsma announced plans to increase Saba’s minimum wage and discussed the new child allowance.
Both issues stem from the historically high cost of living and low wages, making it difficult for people to afford to live on Saba.
The good news for many is that as of this year child tax reduction is replaced by child allowance designed to benefit all children in the Caribbean Netherlands younger than 18 years.
The Dutch Parliament has given consent to the Ministry of Social Affairs and Employment to implement the child allowance as of January 1, 2016, in the Caribbean Netherlands.
The new child allowance for Saba is US $42 per child per month and is applicable to all younger than 18. The child benefit is paid out by the Department of Social Affairs and Labour SZW.
The child allowance is to benefit all families with children but especially lowincome families who are struggling with the high cost of living.
Prior to January 1, parents on the three islands could still receive a tax credit for children but lower-income families did not benefit from this scheme as they pay little or no taxes so they barely received any tax dis count.
To solve this challenge, the child allowance has replaced the tax credit as per January 1. As a result parents of all 5,000 minors in Bonaire, St. Eustatius and Saba will benefit from child allowance. This is a considerable increase compared with previous systems, under which 2,000 children benefited from the previous tax credit.
The child allowance will be comparable to the maximum deduction under the previous system. The previous children’s discount was valid per family for up to two children, whereas the new child allowance is intended for all younger than 18.
The monthly amount can still be adjusted. If it turns out that taxes and social premiums change in a way that parents fall behind compared to the old system, then the monthly amount will increase. The amount will also be indexed in the future.
To date “only” 2,500 children have been registered for child allowance and as it stands right now only half of those registered will be paid out at the end of January, with the second group’s payment starting in February.
The plan is to have the registration information completely digitalized as soon as possible and payments made to the beneficiaries retroactively.
There are also a number of parents who still need to register their children for child allowance. These parents are encouraged to do so at the Department of Social Affairs, situated above the Tax Office.
On Saba half of the children still need to be registered for this benefit. Commissioner Johnson said he has registered all of his children for the new child allowance.
The planned minimum wage increase for 2017 was also deemed positive news but no specific details were released at the press conference.
Asked about the financial situation of students at Saba University School of Medicine, who make up about 25 per cent of Saba’s population and who contribute approximately US $6 million to the local economy annually, Commissioner Johnson responded that government has no control over private businesses and school tuitions.
The majority of students are Canadian, struggling with a historically low Canadian dollar. Johnson said this has happened before when the US $ was weak and the majority of students were American, the enrolment shifted to a Canadian majority and there was little impact on the island’s economy.
There was no discussion on decreasing taxes or monitoring prices on essential staples.
The Daily Herald.