Real disposable income of Dutch households rose by 2 percent in the second quarter of 2014. This is the largest rise for four years. These developments are measured by moving annual totals: the figures for four quarters are combined and assigned to the last quarter.
Effects on year-on-year change in real disposable income
Disposable household income consists of employee wages, social benefits, net property income and income from production, minus taxes and social contributions paid. Based on the moving annual totals, production activities, net property income and the social benefits contributed most to the growth. Production activities comprise activities of self-employed and income attributed to home-owners, which both increased. Employee wages hardly changed.
More income from social benefits
The amount received in social benefits rose compared to the second quarter of 2013. This deviates from figure 1, as only the previous quarter is considered instead of the moving annual totals. Households received 32.8 billion euros in social benefits in this quarter; an increase of almost 600 million euros.
The amount received in social benefits has risen sharply in recent years; including the current increase, the amount was 24 percent higher than in the same quarter of 2008. In the same period, the rise in wages of employees was more moderate: 6 percent. The increase in net property income and current transfers was comparable to that of social benefits. Net property income partly depends on the profitability of companies in the Netherlands and abroad; in this respect, 2008 was a disappointing year. Income from production activities decreased however. As a result of the deteriorating housing market, income attributed to home-owners also decreased.
More welfare benefits
Within social benefits, there are opposing developments. Households received more unemployment benefits and as a result of population ageing, the number of state old-age pensions also continued to rise. In May 2014, 3.25 million people were entitled to general old-age pension, some 90 thousand more than twelve months previously. Households did receive less in disability benefits, survivor benefits and healthcare allowance, however. Income from social services remained the same in the second quarter of 2014, even though more people received income support (WWB). In June, 417 thousand people received income support; a rise of 28 thousand people compared to the same month last year. Most of these income support benefits were paid to people below the retirement age.
Number of income support benefits