State Secretary Nobel: “Working parents should notice that an extra day of work really pays off. No more reimbursements of allowances and certain and affordable childcare. With this proposal, we will arrange that. So that working parents can bring their child to good childcare with peace of mind and have certainty about the costs.”
State Secretary Palmen: “It is good that in the new system the reimbursement is no longer paid to the parent, but directly to the childcare organizations. This ensures peace and simplicity as parents no longer face financial risks.”
Nearly Free Childcare
In the coming years, the cabinet will gradually increase the childcare allowance so that by 2029, childcare will be nearly free for everyone. This means that an extra day of work will no longer lead to less allowance, making working more rewarding. Additionally, the childcare system itself will be overhauled to ensure a simpler and more certain system for working parents.
Financial Certainty
In the current system, parents receive an advance. Sometimes they have to unexpectedly repay large amounts of allowances. In the new system, the government pays the reimbursement directly to the childcare. Parents will no longer need to apply for allowances and will not receive uncertain advances in their bank accounts. The government will also no longer reclaim amounts from working parents. This provides much more financial certainty. The reimbursement will be income-independent. Everyone is entitled to the maximum reimbursement percentage of 96%. This makes it worthwhile for parents to work more hours.
For childcare organizations, the new system guarantees stable financing. The contribution that the government pays for affordable childcare will significantly increase in the new system, to about €9 billion per year. The Benefits Agency is the intended implementing organization for the new plans.
Gradual Transition
To allow the market to adjust to the increased demand, the cabinet will gradually raise the childcare allowance. The cabinet also supports the sector in addressing staff shortages, for example, by allowing group assistants to progress to become pedagogical staff. The new system must be simple for childcare organizations, with minimal administrative burdens. The cabinet will provide extra support to smaller organizations during the transition to the new system.
Efficient Use of Public Funds
The government is investing significantly more in childcare in the new system. The cabinet sets several additional conditions on the use of this tax money. One of them is to designate childcare as a service of general economic interest (DAEB). This ensures that this tax money benefits working parents, for example, by (re)investing in quality and supply in the sector. Additionally, the DAEB ensures that the new system is compatible with European state aid rules. This prevents the risk that the entire subsidy must be reclaimed from childcare organizations. Another condition set by the cabinet is that salaries must be appropriate to the social character of the sector. Therefore, the cabinet places the childcare sector under the Act on the Limitation of Top Incomes.
The cabinets premise is that childcare remains attractive for entrepreneurs. They must retain the freedom to operate and invest in high-quality childcare. The cabinet will continue to actively involve the childcare sector in further development so that the DAEB fits the sector as well as possible and does not impose unnecessary administrative burdens. Additionally, childminders in childcare will be exempt from this regulation.
