Dutch government details plan to make childcare almost free from 2029

The government has revealed how it plans to make childcare in the Netherlands almost free from 2029. Under the new plans, the childcare allowance will be scrapped, and 9 billion euros will be given directly to childcare organisations every year, leaving parents to pay only a small portion of the costs themselves. 

Childcare in the Netherlands to be nearly free from 2029

From 2029, childcare will be almost free for working parents in the Netherlands, State Secretary for Participation and Integration Jurgen Nobel announced in a plan presented to the House of Representatives. To do this, the government will raise its contribution to affordable childcare from 6 billion euros per year to 9 billion euros. 

Instead of this money going to parents in the form of a childcare allowance, it will go directly to childcare providers. This means parents would only need to pay a small amount of childcare costs themselves, while not having to worry about reimbursements and benefit scandals. According to RTL Nieuws, thousands of households previously ran into problems when they accidentally received larger benefits than they were supposed to and had to repay them. 

Profits to be limited in Dutch childcare sector

As it stands, the substantial amount of money the Dutch government wishes to pay to childcare organisations could be considered unlawful state aid under European rules. This is why the government plans to designate childcare as a “service of general economic interest (SGEI)”, similar to the structure used for housing associations.  

With this system, the government would be allowed to provide financial support under strict rules. These rules also mean that childcare organisations will fall under the Standards for Top Incomes Act, which “prevents potentially excessive remuneration for directors” and limits the amount of profit childcare providers can make, while still ensuring that “entrepreneurs can continue to achieve reasonable returns and innovate”. The bill regulating the new Dutch childcare system will be released in October.  

A step closer to more affordable childcare in the Netherlands

Initially, the Dutch government planned to introduce free childcare from 2025, but had to postpone the decision multiple times. Concerns over more affordable childcare, which is likely to cause a spike in demand, have been the main obstacle.

The childcare sector is currently experiencing staff shortages, which organisations warn could become worse if childcare is made more affordable. Dutch trade union CNV recently urged the government to provide new parents with a year of parental leave to ease the pressure on the sector. The government previously introduced a subsidy for childcare providers to hire unqualified workers to help take care of children, to relieve some of the pressure on workers in childcare. 

The Childcare Sector Organisation is not chuffed with the most recent plans, believing it will make organisations less likely to open new locations. "We also support a reasonable return, but this way, entrepreneurs become hesitant to start a childcare organisation. That creates waiting lists," Dedan Schmidt of BK told NOS. 

Other associations, such as the Sector Association for Social Childcare and the Working Parents Foundation, are pleased with the proposal. “There are many vested interests at play in the sector,” said Marjet Winsemius from the Working Parents Foundation. “The State Secretary has always involved us and states eight times in his letter that he considers entrepreneurship in the sector important and wants to give it every opportunity.”