Glenn Thode, Chairman of the former Social Minimum Committee, has expressed surprise at the Second Chamber’s decision to postpone the linkage between the statutory minimum wage and the tax-free allowance for at least a year. The amendment passed despite government objections, was intended to give time to develop targeted solutions for struggling income groups.

Thode questioned the rationale behind the decision, emphasizing that the committee’s core recommendation was to ensure a dignified standard of living for households earning at or near the statutory minimum wage. Central to this was the link between the minimum wage and the tax-free allowance, which would exempt those with the lowest incomes in the Caribbean Netherlands from paying income tax.

“Our advice was clear and unambiguous,” Thode stated. “This amendment undermines what the committee and the government had intended to achieve by 2024. The result could be that people on or near the minimum wage are worse off—a consequence the minister warned against when advising against the amendment. Nonetheless, a majority voted in favor. This sends the wrong message to people already struggling to make ends meet.”

The amendment was proposed by members of ChristenUnie, GroenLinks-PvdA, and D66, who argued it aligns with the report A Dignified Existence. Thode, however, strongly disagreed, suggesting that the proposers misunderstood or misrepresented the report’s findings.

“It’s disappointing that we weren’t consulted,” he said. “Had they done so, we could have explained why people earning minimum wage or slightly above it can’t afford even a small financial setback. This decision fails the very people it should protect.”

Thode acknowledged the House’s call for more data but criticized the decision to delay the linkage. “As a committee, we too needed data. However, waiting does not justify creating uncertainty about the link between the minimum wage and the tax-free allowance. The risk now is that minimum wage earners may have to pay income tax. Ironically, this amendment might lead to better data, as those affected will inevitably come to the attention of the tax authorities.”

In 2022, the Second Chamber decided to link the tax-free threshold to the statutory minimum wage to prevent wage increases from being offset by income tax obligations. The move was seen as a step toward reducing financial pressure on low-income households. Bonaire and St. Eustatius’ island councils actively lobbied in support of the amendment, though it appears to benefit higher-income groups disproportionately, particularly those earning over $75,000.

The lobbying of the BES governments resulted in the support of the MPs to support the amendment.

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