Ministry suggests: let the elderly pay for higher AOW themselves | Inland

This is stated in a memorandum made by the ministry in response to questions from the coalition factions about the Spring Memorandum, in which the cabinet must find a solution for various billion-dollar issues (AOW, Defence, savings tax). For the ‘AOW problem’, the entire opposition wants it to rise along with the signed increase in the minimum wage, Social Affairs argues that the bill (about 2.3 billion euros per year) should be left to the elderly themselves. .

“Because the increase in the state pension benefits the elderly, it may be logical to also look for residual cover among this group,” the memorandum reads. The ministry is using the so-called ‘Forest tax’ as the main option.

It was once devised by the then Minister of Finance Wouter Bos. He introduced the additional levy for all future people over 65 who had more income than just the AOW. That contribution started with a few tens, but increases over time. Due to the unprecedented unpopularity of the rule, a later cabinet changed the name to the sustainability contribution.

The amount of that levy is still increasing over the years, but officials now suggest increasing it in one fell swoop. Depending on the size of the group that has to pay the extra tax, this could yield more than 300 to more than 700 million euros in the long term.

Elderly discount

The ministry also sees some options to cover the costs of a higher state pension. This concerns, for example, cutting or completely abolishing the income support AOW, an allowance for pensioners with a low income. Another variant is cutting the elderly person’s discount. The coalition had increased this in its agreement to compensate for not increasing the state pension. That increase can then be a line and, according to the ministry, the knife must go even further in the discount to straighten out the financial picture.

Whether the Bos tax will really accelerate remains to be seen. D66 and CU had included this in the calculations of their election programme. But CU points out that it is not an end in itself, but part of a broader tax reform. And elsewhere in the coalition it is stated that Social Affairs often suggests the Forest tax as a method of raising money. Whether that happens is ultimately a political choice.

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