If you’re living in the Netherlands with children, or thinking of moving to the country, you should be aware that there are various schemes to give parents a financial boost.
Even though things have gone wrong with childcare benefits in the past, working parents right now are still able to apply for a scheme to help with the cost of pre-school childcare – and, if you are on a typical income, it could cover most of it.
“If you have an average income, then it can be 80% or even 90% of the cost,” said one of the family support team at Blue Umbrella, which offers accountancy services to internationals.
“We offer a service checking the details, advising people about the income to fill in, and giving them more information. Both partners need to be working, or studying with recognised institutes, and the childcare provider needs to have an official number with the Dutch tax office. The higher your family income, the lower the entitlement.”
Working parents
The Dutch tax office, which controls this benefit currently, offers support for nursery for children under four and after school care for those up to age 12, while parents are working. You can be a freelancer, but the benefit will not cover work you are doing as a volunteer or carer.
You might have heard about a “childcare benefit scandal” in the Netherlands, in which more than 30,000 parents were incorrectly accused of fraud and forced to pay back all childcare benefit they had ever received. A disproportionate number of them were people with a non-Dutch nationality or dual nationals. This had huge consequences for the families, led to the fall of a previous government and a multi-billion compensation operation, which is ongoing.
Although Dutch MPs want to make childcare almost completely free at source, setting this up will not happen before 2027. In the meantime, it makes sense to apply for childcare benefit carefully – with full knowledge of the rules and how it works.
“The application is really fast because you estimate the details of your income, and the allowances are paid in advance,” says the Blue Umbrella expert. “The Dutch tax office takes around six to eight weeks to process this, and then they send you a letter with your entitlement.”
Good estimates
But it’s important to get your estimates right – and err on the side of overestimating your income (for a lower allowance) than underestimating and having to repay the difference later.
“We suggest taking the income from last year, checking for any bonuses or change of employment, and estimating a bit higher than what you’re expecting, to stop you receiving benefit you’re not entitled to,” says the expert.”The higher your income, the lower the entitlement.”
At the end of the year, the tax office will send you a statement of the actual amount you were entitled to based on your completed tax returns – and any additional payment or repayment that you need to make. “We can call the tax office to check the reason, and most of the time it’s about the income, so the payment was based on estimated details which are made final,” says the Blue Umbrella expert.
Be aware that the childcare benefit won’t cover all of the hourly costs of your nursery if they are higher than the government limits – currently €10.71 an hour for daycare, €9.52 for after school care and €8.10 for a registered babysitter. However, if your family income is up to €47,403 a year, the benefit covers 96% of these costs. Even high earners get some benefit, with 33.3% covered for a first child (and 67.1% for other children) for those receiving €226,546 a year and more.
If you have moved to the Netherlands, with children, you should make sure that they are registered so that you receive the normal child benefit, which is paid quarterly regardless of income, and if you are on a low income you may get additional help for your children’s costs. “We are always available for a call to discuss this,” says the Blue Umbrella expert.
Contact Blue Umbrella for cost-efficient help with your taxes and childcare benefit