Millions extra for improving purchasing power in the Caribbean Netherlands

The government will make € 16 million available in 2023 to improve purchasing power for residents of Bonaire, St. Eustatius, and Saba. An additional € 12 million will then be made available in 2024 and € 4 million annually from 2025 onwards. The money is part of the broad measures that are being taken to improve purchasing power in the Netherlands.

King Willem-Alexander addresses the members of the First and Second Chamber

This increase in purchasing power is in addition to the extra financial resources from the Coalition Agreement of structurally € 30 million (€ 23 million in 2022) to improve the standard of living of the inhabitants of the Caribbean Netherlands. And is in addition to the € 5 million that was made available by the cabinet last March for lowering excise duties in 2022 and introducing an energy surcharge for low-income households.

The extra amount now released by the cabinet will be used to make the energy surcharge available in 2023. This is an amount of $ 1300 for households up to 130% of the legal minimum wage. The reduction in excise duty on petrol in 2023 will also be extended: 16 USD cents per liter for the first half of 2023 and 8 USD cents per liter for the second half of 2023.

In addition, older people will receive a higher basic pension in 2023. The increase in the AOV corresponds to the amount initially envisaged for 2025. This means that an AOV beneficiary with full AOV accrual, depending on the place of residence within the Caribbean Netherlands, receives approximately 150 dollars extra per month.

Furthermore, parents will receive more child benefits next year and childcare will become cheaper. For a single mother with 2 children aged 1 and 3, for example, this means that she receives $40 dollars extra child benefit per month and pays $50 dollars less per month for childcare (for full care).

The tax-free allowance will also be increased. That is the part of the income on which no tax has to be paid. The increase of the tax-free allowance in the Caribbean Netherlands by USD 500 leads to a tax reduction of 30.4% x USD 500 = approximately USD 150 on an annual basis for residents of the Caribbean Netherlands who pay a wage or income tax.

The purchasing power measures are added to the inflation adjustment that is usually applied as of 1 January to the statutory minimum wage, the AOV, the AWW, the social assistance, and the child benefit (as well as the tax-free sum). The amount of the inflation correction is determined on the basis of the CBS consumer price index for the third quarter of 2022. This percentage will come out around 20 October. The inflation rate for the second quarter of 2022 was around 8 to 9%, but how this will develop towards the end of the third quarter of this year is not easy to predict in advance.

Furthermore, a package is also being worked out for the Caribbean Netherlands to mitigate the consequences of rising energy prices.

Minister Schouten for Poverty Policy sees that due to the current sharp rise in energy and food prices, the livelihood security of a growing group of people is under increasing pressure: “That is why we are taking a large number of measures to improve purchasing power next year, such as a new energy allowance for low incomes, a higher basic pension and for parents a higher child benefit and cheaper childcare. It is necessary that incomes and costs are more in balance with each other. The government wants to take steps on this more quickly.”

State Secretary Alexandra van Huffelen of Kingdom Relations is pleased with the extra money for residents of Bonaire, St. Eustatius, and Saba: “It is important that we help all residents of the Netherlands with extra purchasing power measures. I am satisfied that there is also a good package for the Caribbean Netherlands. But I also know that we are not there yet. We must continue to work on tackling poverty.”

RCN

Organization scan of Public Entity Saba
Commissioner Zagers welcomes the establishing of a Task Force

Leave a Reply

Your email address will not be published.