Benefit repayments
Six million households in the Netherlands receive benefit payments every year. Those who receive too much have to pay the excess back. This leads to millions of repayment demands every year. Government policy is to reduce the number of repayment demands and the amount of money concerned. We asked whether the policy, which was launched in 2012, was working. To do so we analysed information on 7 million households that had received housing benefit, healthcare benefit, childcare benefit and/or child budget payments between 2012 and 2017. We also included information on household income in our analysis.
Households with children and between minimum income and twice the modal income have to repay benefits most often
Undue benefit payments have to be repaid. They can be received because of errors in the calculation of advance payments and because benefits can be reduced in response to changing circumstances, for example if children leave home or if someone begins to earn more or gets married. The Tax and Customs Administration reduced 27.6 million benefit payments between 2012 and 2017. This led to 23 million repayment demands. Most of the households (62%) that had to repay benefits received one repayment demand at a time, but 9% of the households received four or more demands at the same time. On average, 2.6 million households had to repay more than €500. Most of them did so quickly but hundreds of thousands have a long-term repayment debt.
What are our recommendations?
We recommend that the government approach the repayment debts from the households’ perspective and consider:
- the time it takes to repay undue benefits;
- the amount of the repayment relative to the household income.
What methods did we use in our audit of repayment debts?
We carried out quantitative analyses of data provided by the Tax and Customs Administration on benefit payments in the years 2012 to 2017.
- Data on reductions in benefit entitlements, repayment demands and the amounts repayable.
- Data on recipients and their partners who had their benefits reduced.
- A summary of the number of benefit recipients during the period audited.
Current status
The State Secretary for Finance responded to the recommendations made in our report on 28 May 2019. He noted that the Tax and Customs Administration lacked the resources and systems necessary to clarify the financial consequences of repayment debts at household level and to allow for them in policy.
The audit was published and presented to the House of Representatives on 13 June 2019.