You are currently viewing Cabinet awaits heated debate about decoupling AOW and minimum wage

Parties such as the PVV, PvdA, GL, JA21 and Fractie Den Haan believe that the AOW plan will leave the elderly poor. “Billions go to climate and nitrogen,” says PVV leader Wilders. “Our elderly are getting a minus in purchasing power.” He finds that unacceptable.

Subsistence minimum

However, it can be heard in the cabinet that the proposal will not simply be thrown away with bulky waste. The new ministerial team wanted to increase the minimum wage, because it was sinking through the bottom. It is an intention that has broad political support. From a legal point of view, the benefits and the AOW must then increase accordingly. The Rutte IV cabinet now wants the benefits to grow, but does not see the need for the AOW.

The reason given for this is that the subsistence minimum was at stake with regard to the minimum wage and benefits. The government reasons that this is not always the case with the AOW, all the more so because seniors often have a (supplementary) pension in addition to their AOW. It is emphasized that the government is increasing the elderly person’s tax credit in the tax system to compensate for the state pension intervention. The costs for a higher pension for the elderly are estimated at around 700 million.

What also plays a role is that allowing the state pension to grow along with the minimum wage would turn out to be very expensive, about 2.4 billion euros. It would create a breach in the budget of the brand new Rutte IV cabinet.

angry letters

On the other hand, the supporters of the coalition parties strongly criticize the decoupling. Senior departments of VVD, D66 and CDA have sent angry letters to their groups. They see that ‘pensioners are structurally further behind people who earn the minimum wage and people on other benefits’.

The ‘Classic Liberal’ wing, in which critical VVD members unite, is also criticized. “There are quite a few people in our country who only have to get by on an old-age pension,” says Ad Lagas, who calls the disconnection “a bolt from the blue”. “That’s not a big deal, but if this plan goes through, they will suffer even further back. Then you get older people with poverty problems. That’s impossible?”

Responsible Minister Schouten (Poverty Policy, Participation and Pensions) swears that the cabinet keeps a close eye on the purchasing power of seniors. Before the summer, all purchasing power charts will be examined again, she promises.

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