Dutch government still plans to scrap tax benefit for parents after 2024
The House of Representatives (Tweede Kamer) has criticised the government’s decision to postpone the implementation of free childcare in the Netherlands while at the same time going ahead with the plan to scrap the tax benefits for working parents.
Dutch government postponing free childcare and scrapping IACK
Under the current tax system, parents with jobs are eligible for a tax benefit known as IACK, which provides a discount on income tax. The benefit was designed to encourage parents to continue to work even after the birth of their child, and over a period of 12 years allows a couple to “save” around 30.000 euros.
But with the Dutch government moving to significantly reduce the cost of childcare in the Netherlands, it was decided that the IACK would be scrapped. The cabinet argued that free childcare rendered the IACK redundant, as parents would soon be able to continue to work without spending thousands of euros every year on childcare.
Earlier this month, however, the cabinet published its Spring Memorandum (voorjaarsnota). In it, it was revealed that the implementation of free childcare was being postponed by two years. This means that, instead of being introduced at the beginning of 2025, the new system for Dutch childcare will only come into effect in 2027.
MPs argue plans are unfair for families
In spite of this confirmed delay, the government intends to go ahead with its plan to scrap the IACK at the end of 2024. This has met fierce criticism from members of the Dutch Parliament, who argue that parents will be worse off in 2025 and 2026 as a result of the decision.
During a debate in the House of Representatives on Monday, GroenLinks party leader Jesse Klaver referred to the current plans as a “family fine”. According to NOS, his party has calculated that losing the IACK will cost the average family 225 euros per month. “The cabinet promises working parents progress, but in reality they are going backwards. And that at a time when many families are already struggling,” Klaver said.
Members across a number of parties - including members of the coalition - joined Klaver in his criticism. D66’s Steven van Weyenberg said it wasn’t right to “say to a group of parents” that they’d miss out on both the tax benefit and the free childcare, while the Christian Democratic Appeal (CDA) has asked for further clarification on how the decision will impact families in the Netherlands.
New compensation for parents in the Netherlands in 2025 and 2026
While the current plan has been criticised, it’s worth noting that the government has allocated a significant budget for compensation for parents who will neither benefit from the IACK nor the free childcare scheme. NOS reports that 400 million euros have been set aside for 2025, with a further 1,2 billion euros reserved for 2026 - although it is not yet clear how the compensation scheme will be implemented.
Parliament will continue to debate the topic on Tuesday, May 16.
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