Psychologically, having a child turning 18 can be difficult for some parents. Now, a new report published last month shows that it can be economically hard too. It turns out many families in the Netherlands encounter financial difficulties after the kinderbijslag (state child allowance program) ends when children turn 18. This program was first initiated in the economic depression of the 1930s to assist low-income families, but has since expanded to all children, whatever their parents’ income. For those with low incomes, extra support is given through the child-related budget (kindgebonden budget). Both these allowances end when the child turns 18.
The report, conducted by Nibud – the Dutch National Institute for Budget Information – found a significant drop in household incomes in the Netherlands once children in reach the age of 18. Nibud, founded in 1979 to collect data to improve the lives of citizens in the Netherlands, aims to prevent families entering into vulnerable economic situations. According to Nibud’s director, Matthias Gijsbertsen, ‘there are households that don’t miss child benefit and the child-related budget, and we see households that desperately need this income, along with any income from their children’s part-time jobs, to cover essential expenses. The difficult financial transition from a 17-year-old to an 18-year-old child thus exacerbates inequality of opportunity’.
On a quarterly basis, the Dutch government supplements family incomes based on the age of the children. Parents with a child aged 0-5 years old, receive € 279.49 per quarter; for children between the ages of 12 and 18, the amount is € 399.27 quarterly, as older children require more funding. The report reveals that families experience the financial impact of children turning 18 quite differently. While some parents allocate the funds received from the government primarily for savings or something extra to give to their children, others relied heavily on the allowance to make ends meet. Especially low-income families and single parents are dependent on it.
Moreover, there is a difference related to what kind of education a child pursues. For example, a 17-year-old who is enrolled in higher education is entitled to receive student allowance, while their parents continue to receive the quarterly child allowance until the child’s 18th birthday. However, if the child is enrolled in vocational education, they are not entitled to the student allowance and must make do with just the child allowance until their 18th birthday.
Gijsbertsen points out that some families do not miss the allowance once their offspring turn 18. However, for economically vulnerable groups like parents on welfare and single parents the financial impact is more profound. Single parents receive an additional allowance, the single parent allowance, which can amount to approximately €290 monthly, and receive this until their child turns 18. Once that allowance disappears, on top of the child allowance and child-related budget, families find themselves in dire financial straits.
The report indicates that for many households, the transition to 18 is not a gradual change, but a clear financial break. For many children who turn 18, there are few changes in their lives. They usually remain living at home – the average age a Dutch child remains leaves the home is 24 (which for the EU is still quite young, as the average is 26.3 years). Moreover, for adult children the household’s costs, such as rent, utilities and food, remain largely the same. At the same time, the new adult’s income, expenses and responsibilities change and shift in a short period of time. The loss of child allowance destabilizes the family income. For many families, the only solution is usually a combination of working more and cutting back expenses.
Written by Benjamin B. Roberts