The Ministry of Social Affairs & Employment (SZW) wants the so-called “redemption problem” which the tax discount for children is now facing, solved. At the moment there is a compensation in the Caribbean Netherlands for costs of children through taxes, the so-called children’s discount. This children’s discount has the disadvantage that the proportion of the population which has an income below the tax-free allowance, does not get this benefit. This ‘ redemption problem’ affects precisely the people who need this money the most. From the perspective of poverty reduction this is according to SZW “highly undesirable”.
The problem can be solved by changing the tax reduction for children into a child benefit scheme. Previously there was a conversion using the same budget distributed over a larger group, whereby the part of the population that now gets the tax reduction for children, would go backwards. The Second Chamber has adopted a motion about this during the SZW budgetary handling on November 27th, 2014. Therein is pronounced that no one should go backwards.
“The introduction of child benefit replacing the fiscal instrument is a good solution “, so stated State Secretary Jetta Klijnsma to the Second Chamber. “I have spoken about this with the Executive Councils of the Islands. The question is no longer whether are going to do this, but how we are going to do this and when. ”
The child benefit amount per month will therefore amount to approximately $ 38 per child. This is an important contribution to combating poverty and supporting children. The measure thus helps particularly those who lose the tax benefit at this time. Precisely for that group – the people with the smallest purse – this is an amount that matters.
The level of the amount corresponds to the level of the benefit of the tax reduction for children. Like the other benefits in the Caribbean Netherlands this amount will in the future move with the development of the price level. Additional information from the CBS also may in the future lead to review the amount. This applies not only to the child benefit, but for all benefit schemes.
The Ministry of Social Affairs and employment will, based on the motion, hold consultation with the Islands, about the effect. To do this a change in the law required. The aim is to introduce this on January 1st, 2016.