73.000 households at risk of financial trouble by end of 2020
Data published by the Central Planning Bureau (CPB) shows that at least 73.000 households will be in financial trouble within three months if they lose their main source of income.
Coronavirus crisis and unemployment in the Netherlands
The CPB, together with the Netherlands Authority for the Financial Markets (AFM) carried out a so-called stress test, looking at the coronavirus crisis and the resulting implications for households’ financial pressures.
The test says that tens of thousands of households are at risk of financial trouble, in spite of the safety net offered by the unemployment benefit, and the Temporary Bridging Scheme for Independent Entrepreneurs (TOZO). The test didn’t take any unexpected expenditures into account, so the reality of the situation could, in fact, be even worse than currently predicted.
Vulnerable households most at risk
The CPB acknowledges that vulnerable households - young people, low-income earners, or households with only one source of income - are the most at risk of losing their jobs. These households often also have the least saved up in case of emergency, and so are likely to be in an even worse situation if they do lose their jobs.
"If [you lose your job], you have no way out, and then you will no longer be able to pay your monthly costs," says Debby Lanser from CPB. One percent of employees and four percent of self-employed people currently run this risk - without the support of the TOZO the figures would be much worse.
Long-term effects of the coronavirus crisis
The CPB also says that, even if the coronavirus is brought under control soon, the (economic) recovery needed post-coronavirus crisis will take a significant amount of time. They say that, following 2020’s sharp rise in unemployment, it will take around five years before it goes back down to pre-coronavirus levels.
They also say that those who lose their jobs because of the crisis may be out of work for a considerable length of time, and so when they do eventually find work again will likely be on a lower income. If the loss of income lasts longer, for example six months instead of “just” three months, the number of households at risk could rise to 106.000.
Leave a comment