Shrinkage in social assistance is stagnating

The decline in the number of welfare recipients came to an end last year. This is evident from Divosa’s Annual Work & Income Report. Although the social assistance file is still shrinking slightly in larger municipalities, it increased in small and medium-sized municipalities. The outflow percentage is also the lowest in ten years.

Tipping year

In the foreword to the annual report, Erik Dannenberg, chairman of Divosa, speaks of a possible turning point year. Even before the corona period, a trend emerged whereby the number of social assistance recipients decreased nationally, but that has now come to an end. That seems crazy, because of the tightness on the labor market, but Dannenberg sees this as an explanation for the new figures. Employers who are already dealing with personnel shortages may not see opportunities to hire people who are distanced from the labor market.

Tight labor market

‘To help them find work, extra attention and guidance is needed. But employers who are confronted with staff shortages and a high workload among their employees in this tense labor market do not always see room for this. They are often still looking for staff who can be deployed quickly and fully.’ According to Danneberg, this does not necessarily have to lead to an impasse if the government invests extra money in the wage cost subsidy instrument.

Lowest outflow percentage in ten years

For the time being, a large group of people remain on social assistance. From 2022 to 2023, there was a drop in the outflow rate from 26 percent to 23.4 percent. That is the lowest outflow percentage since 2013. In addition, the inflow percentage is also increasing, at least in municipalities with up to 100,000 inhabitants. In larger municipalities, fewer people received social assistance last year than the year before.

Less outflow to work

It also appears that fewer and fewer people are leaving for work in recent years. This was the case in only 36 percent of cases last year. More and more people are leaving due to ‘attrition’. This may include reaching the state pension age, detention, moving to another municipality, moving abroad and entering into a relationship with a partner with sufficient income.

Revenues are declining

Another striking result from Divosa’s annual report is that income from part-time work appears to be declining. Because although the minimum wage increased by 10 percent in 2023, this is not fully reflected in the average additional earnings of social assistance recipients. Social assistance recipients with income from work earned an average of 687 euros per month in 2023.

Fewer violations

Finally, Divosa sees that the downward trend in violations of the obligation to provide information is continuing. Municipalities see less and less often that social assistance recipients, for example, conceal income, or incorrectly report their home address or household composition. “The downward trend may indicate a changed focus of municipalities,” says Divosa. ‘Until 2020, more emphasis was placed on enforcement and combating fraud; After that, attention to the human dimension and customization became increasingly important.’