Increase of minimum wage and social benefits in the Caribbean Netherlands as of the 1st of January 2023

The site Dossier Koninkrijk Relaties reports that the statutory minimum wage and benefits in the Caribbean Netherlands will be increased in addition to the inflation correction as of 1 January 2023. This can be concluded from a letter that the Minister for Poverty Policy, Carola Schouten, sent to the Second Chamber today.

It is remarkable that the minister abandons the usual link between the minimum wage and benefits by allowing social assistance to rise faster. It is also noteworthy that it increases the minimum wage for Bonaire and Saba considerably more than the social partners on the islands have advised.

The minimum wage on Bonaire rises 18.2%, i.e., 6% more than the inflation and 4% higher than the Central Dialogue wanted. On St Eustatius, the minimum wage increases by 14.3%, and on Saba by 15%. On Bonaire, support and AWW rose by 22.2%, on Statia by 19%, and on Saba by 19.7%.

Next week, the Second Chamber Committee on Kingdom Relations will debate with Schouten and State Secretary Van Huffelen about the social domain on the islands.

The RCN has released the following message:

Per the 1st of January 2023, the Ministry of Social Affairs and Employment will increase the minimum wage on Bonaire, Saba, and Sint Eustatius by 18.2 percent, 15, and 14.3 percent, respectively. This includes a correction for inflation. In addition, Minister Carola Schouten (Poverty Policy, Participation, and Pensions) is increasing the amounts of benefits such as the AOV pension and Social relief on the 1st of  January 2023 on top of the inflation. In the interest of poverty reduction, these benefits are increasing more than the legal minimum wage. 

The statutory old-age pension AOV will be increased in one go on the 1st of January 2023 to the level of the benchmark social minimum, initially envisaged for 2025.

The social relief and widows’ and orphans’ pension (AWW) will be increased by 22.2 percent on Bonaire. On Saba and Sint Eustatius, the social relief and AWW will increase by 19.7 and 19 percent, respectively. For social relief, the increase may be higher or lower for different household types in order to differentiate by household type in line with the benchmark social minimum. For instance, the social relief supplements for single persons and couples that live on their own are increased more, which puts the amounts for these household situations in the desired ratio to the minimum wage.

Parents and caregivers will get more child benefits in 2023. On Bonaire, as well as on Saba and St. Eustatius, child benefits will be increased by $20 per month for every child up to the age of 17.

The overview with all the exact amounts of the legal minimum wage and benefits in 2023 will be published shortly.

Improve livelihood security

The cabinet indicated in the coalition agreement that the priority for the Caribbean Netherlands is to improve its economic prospects. The minimum wage increase on Bonaire and Saba is higher than the recommendation of the social partners in the Central Dialogue but more moderate than would be desirable with a view to reaching the benchmark social minimum in 2025. This is due to unprecedented high inflation. Minister Carola Schouten says in a letter to the House of Representatives: “I have tried with the current steps to find a balance between the diverging interests of, on the one hand, controlling employers’ costs at a time when inflation is exceptionally high and, on the other hand, the importance of achieving the benchmark social minimum with a view to fighting poverty. I am aware that this outcome and the burden it entails represents an additional challenge for employers. From the interest of poverty reduction, I choose not to follow the development of the legal minimum wage as usual when increasing benefits, but to go one step further in this as of the 1st of January 2023.”

Dossier Koninkrijk Relaties and RCN

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