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The Dutch Tax Scandal

The prevailing coupling principle

February 17, 2022

By Professor Paul Minderhoud

Introduction

This blog is based on my lecture 'The prevailing coupling principle

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'on January 26, 2022. Given the growing interest of students in the subject and the increasing demand for research on migration, the Department of Law at the Faculty of Law, Economics, Governance and Organization has appointed a chair for Regular Migration Law. Migration law is a dynamic and rapidly growing area of law that is largely influenced by current social developments. In the lecture and this blog, I will discuss the unjust consequences of excluding, in particular, Dutch people and admitted foreigners with a partner or co-resident who is not lawfully staying from a number of necessary financial provisions.

The through-coupling principle

Under the Linking Act, introduced in 1998, aliens who are not lawfully staying are excluded from access to all benefits and benefits in the Netherlands. Non-lawfully staying foreigners are only entitled to education up to the age of 18, the provision of medically necessary care and legal assistance. In 2005, with the introduction of the General Income-Related Regulations Act (AWIR) for a number of important provisions, this exclusion was also extended to Dutch people and admitted foreigners with a partner or co-resident who is not lawfully staying. In concrete terms, this means that if a Dutchman or a lawfully staying alien has a partner or co-resident who is not lawfully staying, he or she can no longer make any claims for a care allowance, housing allowance, childcare allowance or a child-related budget benefit.The child-related budget is a contribution to the costs for children under the age of 18, provided to low-income families. This contribution can amount to a few hundred euros per month. In this context, it is also known as the through-coupling principlespoken.

Very special circumstances

According to the court, this exclusion can be waived in very special circumstances, but so far this is only in one case in 2014 actually happened. In that case, the Chinese wife of a Dutchman had a residence permit to study, but was unable to continue her studies and thus her lawful residence due to pregnancy and a very aggressive form of cancer. The housing allowance, the child-related budget and the care allowance that the Dutchman received were stopped in that case when their (Dutch) daughter was only two months old. Under these very special circumstances, according to the Supreme Court in these cases (the Administrative Jurisdiction Division of the Council of State), stopping the surcharges was a disproportionate means of achieving the purpose of the coupling principle and thereby in violation of articles 8 and 14 of the European Convention on Human Rights. However, this statement has turned out to be a white raven. Various reports and information from aid workers show that in many more situations there are such very special circumstances that lead to distressing poverty.

Cost sharing standard

This situation has worsened after the introduction of the so-called “cost-sharing standard” in 2015 in the Participation Act (the successor to the Work and Assistance Act). This cost-sharing standard provides a formula that lowers the assistance standard per person as more people are present in the home to share the costs. As a result, the presence of a resident adult alien without a right of residence counts for a substantial reduction in the amount of social assistance benefits from, among others, the Dutch partner. But the presence of that same stranger continues to completely block access to the mentioned surcharges.

Position of children

Especially when children are involved, this coupling principle is disproportionately harsh. As early as 2012, the Advisory Committee for Immigration Affairs (ACVZ) reported 'Right to a dignified existence' therefore, the recommendation to include in the Aliens Act that the coupling principle does not apply to underage aliens. The SER also concluded in a report published in 2017 'Growing up without poverty' that the coupling principle can lead to situations where entire families are left without income and without shelter. In this regard, the Children's Ombudsman asks for a report published at the end of 2017. 'Dutch children disconnected' once again, explicit attention to the position of the estimated hundreds of children whose parents do not have a lawful residence, so that the entire family is no longer entitled to the relevant surcharges and the child-related budget.

Harrowing situations

According to the Children's Ombudsman, this leads to dire situations of poverty. The report provides examples where children do not get a hot meal, go wandering or are removed from home. Irreconcilable rent arrears also lead to evictions. The Children's Ombudsman recommends that the government adapt (the application of) the coupling principle so that families with underage Dutch children and children with a residence permit can claim surcharges, benefits and benefits for the children. In my opinion, such situations should, by default, be regarded as very special circumstances.

Amendment to the Child-Related Budget Act

Partly as a result of this report by the Children's Ombudsman, this form of exclusion with regard to the child-related budget has been a thing of the past since 1 January 2022. Since that date, an amendment to the Child-Related Budget Act allows a Dutchman or a lawfully resident alien, who has a partner who is not lawfully staying but also has a lawfully resident child, to claim a child-related budget allowance. This would involve around 600 children annually. In the House of Representatives, it was still proposed to extend this claim to situations with children who are not lawfully staying, but there was no parliamentary majority in favour. Please note that this change therefore only applies to the child-related budget, but not to the care, rent and childcare allowance. In all these cases, the current complete exclusion remains in effect.

Retroactive recovery of surcharges

Many problems are exacerbated by the fact that, in many cases, the surcharges provided are reclaimed retroactively. This system has been extensively addressed in the general child allowance affair. People sometimes had to repay tens of thousands of Euros of childcare allowance afterwards, with far-reaching social consequences such as divorce, eviction, bankruptcies and unemployment as a result. On a smaller scale, but no less poignant, these dramas also take place among foreigners who are confronted with the fact that their right of residence is being revoked retroactively. This withdrawal does not only take place in situations that are entirely due to the alien himself.These foreigners are then considered to be residing lawfully for the entire period that they have stayed here. This is the signal for the tax authorities to subsequently recover all surcharges received during that period until they withdraw their right of residence. And that recovery also happens to the Dutchman whose partner or co-resident no longer has a right to reside retroactively.

Four possible solutions

The situation described above was partly caused by factors similar to those involved in the general benefits affair. In the context of the proper settlement of this general benefits affair, it is now the time to structurally stop the excessive effect of the coupling principle. The simplest solution is legislation (paragraphs two and three of article 9 AWIR), which is the basis for through-coupling principleto delete shapes. Another option is to include in the Aliens Act that the coupling principle does not apply to underage foreigners. A third possible solution is a individualizationof the right to benefits and allowances. When granting the benefit or allowance, the presence of a partner or co-resident who is not lawfully staying will then no longer be taken into account. As a fourth option, I would mention a more active role of the judge. In general, a better application of articles 8 and 14 of the European Convention on Human Rights (ECHR) can prevent many distressing problems. This active position on the part of the judge is indispensable to counterbalance the power of the administration and to guarantee citizens' fundamental rights. In the context of properly settling the general benefits affair, now is the time for the excessive effect of the through-coupling principle to stop structurally.

Bio Professor Paul Minderhoud

Professor Paul Minderhoud is professor of Regular Migration Law at Utrecht University and an associate professor at the Center for Migration Law at Radboud University Nijmegen, the Netherlands. His main research interests are the legal and socio-legal aspects of immigration and social security. In his new position as professor of Regular Migration Law, Minderhoud will also work with the Center for Global Challenges (UGlobe) and the Utrecht Center for Regulation and Enforcement in Europe (RENORCE).

Date
17 March 2025
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