ent allowance: proposed changes from 2025

The Lower House began mid-November with the plenary treatment of two new laws that make rent allowance less complex. More tenants will be able to claim rent allowance as a result. And most current recipients will benefit after implementation.

 

The measures are included in the bills 'Simplification of the rent allowance' and 'Rent allowance to improve purchasing power and simplify the scheme'.

 

The government will release €215 million in 2025 for the simplification and improvement of the rent allowance and from 2026 onwards €650 million per year on a structural basis. At present, around 1.5 million households receive rent allowance. From 2026 onwards, around 170,000 households will be added to this, who will also be entitled to rent allowance, for an average of €175 per month. If the laws are introduced, almost all current recipients of rent allowance will be better off in 2025; on average by €12. In 2026, around 80% of current recipients will be better off. Around 20% of current recipients will receive less rent allowance in 2026, on average €9 per month. These are tenants who are currently still reimbursed for communal service costs, but will no longer be in the future.

 

More people are entitled to housing benefit

The government wants to adjust the conditions for rent allowance. For the first time, tenants who pay a higher rent will be entitled to rent allowance from 2026. These tenants are entitled to rent allowance based on income, but did not receive it because their rent was above the liberalisation threshold. After the introduction of the law, they can, just like tenants of a social (regulated) rental home, apply for rent allowance on the rent portion up to €879.66 (amount 2024). This will be possible because the maximum rent limits as a condition for the right to rent allowance will no longer apply.

This is also good news for younger tenants. More younger tenants up to the age of 21 will be entitled to rent allowance. They can also apply for rent allowance if their rent is higher than €454.47 (amount 2024). This is currently only possible if their rent is lower than

€454.47. However, only the rental portion up to this rental limit will be reimbursed.

Young people aged 21 and over will be entitled to full housing allowance. They currently only receive this from the age of 23. This new age limit is equal to that of the statutory minimum wage.

Furthermore, the difference in rent allowance between elderly and non-elderly people will disappear as of 2025. And households with two or more persons under the AOW age will receive a higher allowance if they pay a higher rent. The other recipients of rent allowance already received this allowance.

 

Work should pay off

There will be a slower reduction in rent allowance as income increases. The first effects of this will be noticeable in 2025. From that moment on, tenants will keep more rent allowance if their income increases. From 2026, the calculation will be further adjusted by introducing linear reduction. This will make it easier to understand and see what changes in rent allowance as income increases.

 

Common service charges

Residents of apartments sometimes pay costs for shared services in apartment buildings. For example, for cleaning and energy of shared spaces such as the elevator or a gallery, and the work of a caretaker. The government wants to abolish the (partial) compensation for four types of shared service costs. Other shared service costs are already not eligible for rent allowance compensation.
When reporting service costs for rent allowance, mistakes are often made that can then lead to a recovery. By abolishing shared service costs as an item for rent allowance, people have to provide less information. There is also less need for checking. After the service costs have been abolished, the rent for rent allowance will be equal to the basic rent. This is stated as standard in the rental contract.

 

Future changes in the benefits system

The benefits system in the Netherlands offers income support to those who need it (targeted) and at the time they need it (timely).
In recent years, there has been much discussion about the desire to simplify benefits. The proposed measures in the rent benefit are a major step in this direction. Both laws also provide for improvements in the current implementation.

Source: www.woonbond.nl