If the plans of the new cabinet government agreement are implemented, all workers in the Netherlands will advance. Compared to the present, workers’ purchasing power will increase between 4% to 6% in 2021, says Nibud, who has calculated the government agreement on behalf of the Lower House.
The Institute for Budget Information examined the changes that the Cabinet plans to make. People with jobs will have more in their wallet because salaries are rising faster than prices. Workers also benefit from the higher labour shortage and lower tax rates. People with a relatively low income, up to 20,000 euros a year, will see the least of the purchasing power increase. This is because their income falls into the first tax rate, whose rate rises. The purchasing power of middle income and higher income earners will grow stronger, because they will pay a little less tax.
VAT rate
The Cabinet raises the low VAT rate from 6% to 9%. Shopping or visiting the hairdresser will be more expensive. Despite this measure, most of the Dutch are advocating: childcare subsidiary for two children should be 40 to 45 euros more per month in 2021.
Households with children are on the rise because of the increase in child benefit and income-dependent child-related budget. In families where one of the partners works, the purchasing power increases with more difficulty than in families with two working partners.
With retirees, the purchasing power does not increase so much. Older people with only AOW or with a small supplementary pension are moving forward; older richer people (with a high supplementary pension) even see their purchasing power falling.
Living
Tenants are better off with the plans of the new cabinet. Consequently, the hard income limit disappears for the allocation of rent allowance. As a result, some tenants have the right to rent allowances in 2021, while they do not get it now. Homeowners suffer from the accelerated reduction in mortgage interest rates and the gradual abolition of the Hills Law. Homeowners who have paid off their mortgage are then no longer exempt from the home-owned property. As a result, their purchasing power increases somewhat less.
Translated by Maybeline Whitter
Source:
https://nos.nl/artikel/2200035-alle-werkenden-gaan-er-door-nieuw-kabinet-op-vooruit.html