NETHERLANDS - Social affairs minister Aart Jan de Geus says he rejects the opposition Labour Party’s proposal to tax the AOW state pension.

The proposal, from PvdA leader Wouter Bos, will lead to a considerable loss of buying power for pensioners with an additional pension of over €12,000, the minister stated during a meeting of his party, the Christian Democrats.

Bos has suggested that better-off pensioners should contribute to the costs of population ageing, by paying tax on their AOW.

According to de Geus, single pensioners with an additional pension of €26,000, and couples with an extra pension of €22,000, will face a loss of buying power of 13.5%.

Elderly singles with an additional pension of over €12,000, and couples with an extra pension of over €14,000, should expect less buying power of 10% and 12.3% respectively, the minister added.

De Geus also rejected Bos’ proposal to compensate pensioners with a pension of under €10,000. “A compensation, by raising the elderly allowance, will undo the proceeds of a AOW taxation,” he stressed.

Earlier, Finance minister Gerrit Zalm indicated that he doesn’t want to raise tax on the AOW.

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