Court Rules Benefit Payments to Turkey Cannot be Cut
THE HAGUE, 24/08/13 - A district court in Amsterdam has ruled that the cut in benefit payments transferred by the Netherlands to persons in Morocco and Turkey infringes international treaties.
Eleven Turkish and Moroccan widows will have their widow’s pensions paid out at the old level after all, plus interest, and with retrospective effect. The ruling will likely also have consequences for tens of thousands of other benefit payments.
The ruling concerns eleven widows in Turkey and Moroccan who fought against the cut in their widow’s pension. This cut was a result of the introduction of the so-called ‘country of residence principle.’ This provides for a cut in the payments if exported to countries outside the EU, based on the level of prosperity in the country of residence of the recipients.
The law came into effect in July last year and provides for the cut for the Widows Act, children’s allowance, the child-linked budget and parts of job disability benefit payments. The size of the benefit payments that are exported is fixed annually. For Turkey and Morocco, this is currently at 60 percent of the standard payments in the Netherlands.
The Amsterdam judge concludes that the cuts violate European law and international treaties. In addition, there is a question of rights obtained in the case of benefit payments that were already underway before the measure came into effect.
The cuts were intended to yield savings of 16 million euros this year, including 10 million on benefit payments to widows. This 10 million must now be paid out plus interest. The cabinet also has to pay the court costs.
Social Affairs Minister Lodewijk Asscher is still studying the verdict and considering an appeal against it. According to the ministry, the land of residence principle affects some 21,000 benefit payments, worth an estimated 52 million euros last year.
This is the second time this year that the courts have consigned a cutback on the export of benefit payments to the waste-bin. Earlier this year, the restriction of exports of a bonus for elderly taxpayers was torpedoed. Asscher then withdrew the law and had to accept the setback of 300 million euros.