Offsetting Allowances Against Debts in Amsterdam
Offsetting allowances against debts in Amsterdam means that the Tax and Customs Administration/Allowances reduces your allowance in part or in full to cover outstanding government claims. This applies automatically to debts such as taxes or fines and is a standard collection method. For Amsterdam residents facing high housing costs, this can be particularly painful, but you can challenge it. Here you will find the rules, your options, and city-specific tips.
Why offsetting in Amsterdam?
The government aims for swift debt recovery. Allowances such as healthcare allowance, rent allowance or childcare allowance – essential for many Amsterdam households due to high rents – are paid monthly and thus an easy target. Debts owed to the Tax Administration, UWV, SVB or DUO trigger offsetting, preventing you from receiving payments while debts pile up.
Example: You have €500 outstanding income tax. Your €125 monthly healthcare allowance is fully offset. Payments resume once the debt is cleared.
Legal basis
Offsetting is governed by the State Taxes Act 1990 (STA 1990), specifically Article 14 STA, which permits the set-off of state claims (allowances) against debts to the state. For allowances: Allowances Act (AA) Article 31, with objections under the General Administrative Law Act (GALA).
The Tax Administration sends a set-off decision detailing the amount and reason. You have six weeks to object (Article 6:3 GALA). In Amsterdam, appeals are filed with the District Court of Amsterdam.
Which allowances and debts in Amsterdam?
Not every allowance or debt qualifies. Overview with local examples such as city parking fines:
| Allowances subject to offsetting | Debts triggering offsetting |
|---|---|
| - Healthcare allowance - Rent allowance - Childcare allowance - Child-related budget |
- Tax arrears (income tax, VAT) - Fines (Amsterdam parking fines, traffic violations) - UWV recoveries - DUO loans |
| Exception: Child-related budget not offset against childcare debts from the benefits scandal. | |
Source: Tax and Customs Administration/Allowances 2023. Private debts, such as those with Amsterdam energy suppliers, do not count.
Rights and obligations for Amsterdam residents
Rights:
- Always receive an informative letter.
- Object within 6 weeks to the Tax Administration; then appeal to the District Court of Amsterdam.
- Interim relief for suspension (Article 8:81 GALA).
- Protection below subsistence level: approximately €30 per month per person remains exempt.
Obligations:
- Pay debts on time to avoid offsetting.
- Report changes, such as a new address in Amsterdam, to prevent errors.
- Cooperate with repayment plans.
Real-life examples from Amsterdam
Example 1: Mrs. Jansen from Amsterdam-West has €1,200 in parking fines. Her rent allowance (€250/month) is offset. After 5 months, full payments resume following a successful objection against a time-barred fine.
Example 2: The De Vries family, affected by the benefits scandal, retains their child-related budget despite childcare debt, under 2023 rules.
Example 3: Mr. Ahmed from Amsterdam-Noord with an €800 UWV debt. Offsetting of his healthcare allowance (€140) stops after a remission request due to low income.
Frequently asked questions
Can I object to offsetting in Amsterdam?
Yes, within 6 weeks of the decision. Prove the debt is unjustified or request a deferral. Success is common with time-barred debts. Contact the Amsterdam Legal Aid Office for assistance.
Does a payment arrangement stop offsetting?
Not automatically. Explicitly request it from the Tax Administration. Consider a compulsory debt settlement via the Municipality of Amsterdam for comprehensive debt relief.
Problems caused by offsetting?
Contact the Municipality of Amsterdam debt assistance for mediation, remission or adjustments. See also tax remission.
Can private debts be offset?
No, only government claims. CJIB fines yes, commercial ones no.
Tips for Amsterdam residents
- Check Mijn toeslagen: View debts and offsets online.
- Object promptly: Download the form from toeslagen.nl with supporting documents.
- Seek debt help: Register with the Municipality of Amsterdam or Amsterdam Legal Aid Office. Also read about garnishment of benefits.
- Prevent escalation: Pay off small debts yourself to keep allowances intact.