Free childcare on the back burner

The much-criticized childcare allowance will remain in place for nearly four more years. The government is delaying the introduction of "free" childcare for two years until 2027. Staff shortages in the industry are the main reason, but the postponement also saves the treasury a lot of money. 

It was agreed in the coalition agreement that working parents would be able to use almost free childcare for their offspring from 2025, but that date appears to be unrealistic. The demand for childcare places will rise sharply after the measure is introduced. The childcare sector has been warning for some time that the industry cannot handle this extra demand, because they are already far understaffed. 

The postponement is therefore not unexpected. Late last year, responsible minister Karien van Gennip (Social Affairs) already warned the House of Representatives that 2025 would be difficult, but that remained the commitment at the time. The high absence due to illness and the rising number of vacancies in the childcare sector is now forcing the cabinet to adjust its ambitions downward. 

CBS (Central Bureau of Statistics) presented alarming statistics in February about the number of vacancies in childcare. That in mid-2022 was higher than ever, even relatively speaking. The industry is struggling with a high outflow. Many care workers move on to other positions or to jobs in other sectors after only a few years. The absence rate last year was 7.3 percent, much higher than in comparable sectors. 

Although insiders say the postponement is mainly due to the practical unfeasibility of the original implementation date, the delay is not inconvenient for the cabinet. Finance Minister Sigrid Kaag had to plug a billion-dollar hole in her budget, caused by rising interest costs, the extra allocation to Groningen, and the increased influx of asylum seekers. Two years of postponement of the new childcare system saves the treasury a one-time sum of over 3 billion euros. 

As of 2027, childcare subsidies should thus disappear for good. In the new system, the central government reimburses 96 percent of a predetermined maximum hourly rate. From now on, the government will transfer that reimbursement directly to the childcare company. Parents pay a contribution of 4 percent of the maximum hourly rate. For them, care will therefore be almost free, unless the care company charges a higher rate than the maximum hourly rate.