The Dutch Cabinet has pulled planned social security cuts out of its budget just ahead of a two-day parliamentary debate on next year's finances. To cover the gap, many more people will soon fall under the Box 3 tax, which the government wants to reform in 2028. A €1.2 billion cut to the education budget is also being held in reserve as a last resort, based on an agreement between coalition parties D66, VVD and CDA.
13 hours Ago
Benefit Cuts Shelved, Savings Still Expected
On Tuesday, the government said social security cuts are off the table for now while it talks with trade unions about reforming the WIA disability benefit. Prime Minister Rob Jetten and Finance Minister Eelco Heinen were clear, though, that these talks still have to deliver savings on benefit payments. Jetten said that if the results fall short, the Cabinet will bring forward additional proposals.
The Cabinet is currently dealing with a €3 billion shortfall. One backup option is to scale back the price adjustment mechanism across several ministries. In plain terms, their budgets would stop keeping pace with inflation in the coming years.
They would have less money to spend and would be forced to make cuts. Defense and Justice and Security would be spared, and Foreign Affairs would barely feel it. The Ministry of Education, Culture and Science would take the biggest hit, losing €1.
2 billion from 2031 out of a total budget of €57 billion.
Box 3 Changes Pull In More Taxpayers
Jetten and Heinen also announced that the Cabinet wants to change the Box 3 tax as early as 2028. Under the new approach, savings and investments would be taxed on actual distributed gains rather than paper gains.
More people will end up paying it, since the tax-free asset allowance will fall from roughly €60,000 to just over €30,000.
The reform w.
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