Cabinet is allocating billions to combat educational disadvantages

On 17 February, the two Ministers of Education Ingrid van Engelshoven and Arie Slob announced extra financial support for the education system. The COVID-19 crisis and its consequences had an unfavourable impact on all branches of education, so the government decided to step forward with additional financial aid. Within the next 2,5 years, educational institutions will be allocated a total of 8,5 billion euros. The subsidy is a part of a recent nationwide program countering the consequences of the corona crisis. It is not yet known at this moment how serious the problems are, but according to the experts, running behind a few months in the school program may turn into more than a year’s delay for a student. More than 535 million euros had already been spent on support for the educational sector, but according to the two Ministers it was not enough.

The new financial program encompasses both primary, secondary and higher education and is tailored according to the specific needs of each sector. For instance, secondary schools will receive 1,3 million euros on average per school; primary schools will get an average of 180,000 euros per school in the coming school year. The schools will be able to determine for themselves where to allocate the finances. This way, according to the education experts, the money will be spent on the aspects that the schools themselves consider important. Moreover, the schools that already needed extra help before the crisis, will get additional financing. However, minister Slob mentioned that these schools have to provide a concrete plan to receive the money. Some experts voiced their concerns that not every school has enough time or knowledge to develop such plans. They advised to first assess the exact delays that students experience, and the financial needs of the schools, and then ask for financial support.

The demissionary Cabinet has suggested a few possible solutions on how the students can catch up with their educational program. During the summer vacation, primary and secondary schools are asked to provide free tutoring for those who need it. The teachers who will give the classes will be paid extra, in order to compensate for their work during the holidays. Additionally, there will be supplementary “bridging” classes for students who are not yet ready to choose a level for secondary school (VMBO, HAVO or VWO). They will get slightly more time to determine at which level they want to continue their studies. Secondary schools can invest in more subject teachers, teaching assistants and other teaching support staff.

In addition to the 8,5 billion euros, there is also an extra yearly budget of 645 million euros for higher education. This decision was taken because of the high number of first-year students; more youngsters who passed their high school exams last June decided to start studying directly afterwards, without taking a gap year. The extra budget will allow educational institutions to hire more personnel and give better assistance to the students. Universities will also receive additional funds in order to give young scientists more time to finish their research.

Another component of the Cabinet’s financial help is reducing the university tuition fee for the upcoming study year by half. Because of the Covid-19 measurements, many students have lost their part-time jobs. Lowering tuition for one year will give them more breathing space. For those who have also lost their supplementary scholarships, the government will pay out compensation. The student travel compensation will also be extended for 12 months for those who have to study longer because of the lockdown measures.

All in all, the Cabinet wants to make sure that the whole education sector has enough resources to compensate for the current difficulties and delays. The student organizations are happy with this plan and are glad that the government recognizes the financial side of the problem. Experts are also positive about the support package. However, they are warning that this is only a symptomatic approach and that bigger problems, such as the chronic shortage of teachers and the ongoing reduction in the quality of education, still have to be tackled.

Written by Anastasiia Myronenko

A person is subject to Dutch tax when that person is a Dutch tax resident. A Dutch tax resident is a person whose life is focused on the Netherlands. When you are a Dutch tax resident, your worldwide income and worldwide assets are taxed in the Netherlands.

A non-resident taxpayer is a person who does not live in the Netherlands, but owns property in the country. Property is taxed in the country where the property is situated, hence the non-resident taxpayer status. This also works the other way around. If you are a Dutch tax resident and you have property abroad, this property is not taxed in the Netherlands. You then receive a double taxation credit.

The famous 183-day rule determines whether you are a Dutch tax resident. This means that if you spend more than 183 days in the Netherlands, you are deemed to reside here and therefore pay taxes here. Furthermore, you must have been sent to the Netherlands by a foreign employer and you do not work in a fixed location owned by your employer in the country where you work. The last two criteria often neglected. If these three rules do not apply, tax treaties determine that the country where you work is where one pays taxes.

The Dutch tax return system has a limited number of deductions, as the Dutch Government aims at simplifying the system. Mortgage deduction, study costs, illness costs and charity donations are the main deductions. In 2022 the study cost deduction will end. The illness costs deduction has a threshold of 1% of the combined income. Health care insurance premiums and co-pays are deductible.

United States Income Tax A person is subject to US tax if that person is a US “person”, which generally means a citizen, resident or green card holder, no matter where the person lives. Whether a US citizen is required to files taxes is dependent on their income: US people who have income of more than $12,600 or self-employment income of more than $400 must file a tax return. Minors who are US persons must file their own tax return if their unearned income (e.g. from investments) is more than $1,100. Thus, most US citizens living abroad have US tax filing obligations, even if they do not owe US tax. This includes dual Dutch-US nationals. US citizens living in the Netherlands generally pay Dutch income tax as outlined above, and are therefore eligible to either exclude their Netherlands-based earned income from the US tax using the “Foreign Earned Income Exclusion”, and/ or to claim “Foreign Tax Credits” for the income tax paid in the Netherlands.

State income tax returns may also need to be filed if a person has state-sourced income, such as rental property or remote working income. Some taxpayers may be able to get a US tax refund due to child tax credits, or from withholding on their US-sourced income. The only way to get a refund is to file a tax return within three years of the original due date of the return.

Written by Arnold Waal