Sharp increase in partial AOW benefits

24/03/2009 15:00

In December last year, 464 thousand people received only partial old age pensions (AOW), i.e.17 percent of total AOW benefits paid out in 2008. The amount of partial AOW benefits has tripled over the past two decades. The number of over-65s applying for income support has also grown.

Increase due to international migration

Increased international migration is the main reason that more people have built up only partial entitlement to AOW. It concerns people who migrated to the Netherlands as adults, for example labour migrants who have come to the Netherlands since the 1960s, but also people who have left the Netherlands to settle elsewhere prior to their 65th birthday.

The AOW benefit is related to the number of years AOW contribution was paid. Each year between the ages of 15 and 65 no contribution is paid, e.g. during a stay abroad, a 2 percent cutback applies.

AOW benefits, 1988-2008

AOW benefits, 1988-2008

Predominantly in the Randstad and border regions

Partial entitlement to AOW is frequent in municipalities in the Randstad region, because the proportion of first-generation immigrants with a non-western background is high in this region relative to other parts of the country. Partial AOW benefits are also common in municipalities situated in the border regions, but the recipients more often have a western or native Dutch background than in the Randstad.

Proportion of partial AOW benefits in total number of AOW benefits, December 2008

Proportion of partial AOW benefits in total number of AOW benefits, December 2008

Increasing number of over-65s apply for income support

Households with partial AOW entitlement are at a greater risk of having incomes below subsistence level. They can call upon social security for relief. Due to the growing number of partial AOW benefits, the number of over-65s entitled to income support has doubled in the past decade, whereas the overall number of income support benefits has dropped by 29 percent.
By the end of last year, 33,560 income support benefits (one in nine) went to applicants aged 65 or older. Currently, 88 percent of this group consists of families with a foreign background, of whom 82 percent have a non-western background.

Social security benefits, 1998-2008

Social security benefits, 1998-2008

Katja Chkalova