New regulations for child care allowance
The Dutch law governing child care bases the financing of formal child care on contributions from parents, employers and the government. Since 2007 employers are legally obliged to contribute to the cost of child care. The contributions of employers and the government are paid out by the Dutch tax authorities as child care allowances. The condition is that the applicant and the partner, if any, both either work, study, or participate in a citizenship or reintegration course. Parents involved in the latter two receive the part the employer would have paid from the municipality or the UWV.
Limiting the number of hours for which child care compensation is paid has been the main change in 2012. The number depends on the number of hours worked by the parent with the least working hours. Parents with pre-school children in day care are entitled to a compensation of 140 percent of these hours. For school children the maximum is 70 percent. Moreover in 2012 a maximum of 230 hours per month was set for the total number of day care hours per child for all types of day care put together.
Furthermore the contribution for parents was raised across the board in 2012. In 2013 it is raised again but mainly for the higher incomes. Parents with a joint income of more than € 118,189.-- no longer receive any child care allowance for their first child. The first child costs most in day care. So parents with this income and one child in day care no longer receive child care allowance in 2013.
The data about the child care allowance paid are supplied by the Dutch tax authorities. They are up to date until the end of January 2013. For the reporting years until the end of 2009 the figures are definite by January 2013. For the years 2010 and 2011 this was the case for 70 and 29 percent of the compensation respectively. The 2012 data are entirely based on preliminary compensation paid.
The amount parents receive depends on the costs of day care and on their income in a given year. Generally one parent applies for the compensation. The tax authorities may adjust the amount paid in compensation once the income is definite. The figures are adjusted for this.
The costs of child care refer to the costs as far as they do not exceed the maximum hourly rate compensated. In 2012 this maximum was set at € 6.36 per hour. For care after schools the rate was € 5.93 and for host parents € 5.09 per hour. The parent or parents have to pay for any cost that exceeds these rates. They are not included in the results presented here.