Sunday , July 3 2022

Court rejects claim for higher pensions on BES islands

The Daily Herald reports that the  Court of First Instance of Bonaire, St. Eustatius and Saba on Wednesday rejected the claim filed by citizens of these three islands for payment of the old age pension AOV to be equal to the AOW pension in the European Netherlands. The three administrative lawsuits against the Minister of Social Affairs and Employment were heard by the Court on Bonaire.

The cases were filed by former Saba politician Will Johnson, Statia’s Commissioner Reginald Zaandam and journalist Aubrey Sealy from Bonaire, in January 2012. All three are pensioners, but receive considerably less than their counterparts in the European Netherlands, which, they felt, constituted discrimination and unequal treatment in violation of the Dutch Constitution and the European Human Rights Treaty.

Will Johnson
Will Johnson

According to claimants, the socio-economic rights in the European and Caribbean Netherlands are equal since the constitutional transition of October 10, 2010. However, since then the amount of AOV has not been pulled up to the Dutch AOW-level. Based on the National Ordinance general old age insurance Lv AOV, which already was in existence prior to October 2010, pensioners in the Caribbean Netherlands are entitled to AOV when they turn 60. The maximum amount of AOV is currently US $524, whereas Dutch pensioners are entitled to 1,064 euros, approximately $1,476.

The pensionable age in the Netherlands is currently 65 years and one month. In 2019, the pensionable age in the Netherlands will be increased to 66 years, and from 2023 to 67 years. From 2024, the AOW-age will be connected to life expectancy. The AOV BES is indexed every year, based on the consumer price index of Central Bureau for Statistics (CBS).

Article 1 of the Constitution stipulates that everyone in the Netherlands is treated equally and discrimination based on religion, philosophy of life, political affiliation, race, gender, or whichever grounds is not permitted. Claimants also made an appeal on Article 14 of the European Human Rights Treaty, which prohibits discrimination based on “sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

In the Kingdom Charter it is stated that specific rules and regulations may be applied to the islands due to their specific economic and social circumstances, the large distance with the European Netherlands, their insular character, small territory and population, geographic circumstances, climate and other factors which make them essentially different from the European Netherlands.

Claimants said pensioners on the islands were treated unequally when compared with their counterparts in the Netherlands, and stated they would need approximately half the amount of a Dutch pension to be able to sustain themselves.

The Court of First Instance came to the conclusion that the differences in pensions being paid out in the Netherlands and on the islands were permissible and not discriminatory. According to the Court, lawmakers have a considerable “margin of appreciation” to establish a social-security system, for as long as it is not making a “suspect” differentiation based on innate characteristics of a person, such as gender, race and ethnic background. Based on socio-economic circumstances, claimants receive a lower old-age pension than residents of the European Netherlands, the Court stated.

In collaboration with the island governments, the Dutch Government is to establish an acceptable level of provisions on the islands, including social security; it is stated in the Charter. In concordance with the Constitution, rules may be applied suitable to the specific circumstances on Bonaire, Statia and Saba, which may differ from regulations in the European Netherlands. This stipulation was introduced to prevent the islands from being “flooded” with Dutch laws and regulations. “The legislator has thus sought to avoid possible disruption, taking into account the competitiveness of the islands in the region and the business environment,” it was stated.

In the explanation to the Budget for Kingdom Relations 2012 it was stated that the differing level of social security in comparison with the European Netherlands was a “deliberate” choice to prevent a priming effect and a weakening of the islands’ competiveness. It was also pointed out that residents and businesses on the islands pay significantly less taxes than in the Netherlands.

The Court said claimants rightfully pointed at the differences between AOV and AOW, but also said that both social benefits are basic facilities aimed at avoiding poverty. “It is expected from pensioners to seek coverage by extra insurance or generate additional income,” it was added.

The Court in First Instance also pointed to the difference in minimum wages. On Bonaire, the minimum wage is 598 euros, whereas the minimum wage in the Netherlands is set at 1,456 euros. The pensions on Bonaire are 598 euros for singles and 860 euros for couples. In the Netherlands these amounts are 1,064 and 1,483 euros, respectively.

Based on the minimum wage-pension ratio and a comparison of supermarket prices provided by Consumer Union Bonaire Unkobon with those at Jumbo-supermarket chain in the Netherlands, the Court found that the pensions in Bonaire, Statia and Saba are in fact more favourable than in the Netherlands.

It was further taken into consideration that also the burden of taxes and social security premiums is more favourable on the islands. Contrary to the Netherlands, persons conducting a joint household on Bonaire, Statia and Saba also do not receive a discount on their pension.

Based on this, the Court arrived at the conclusion that the pensions in the public entities are equal to those in the Netherlands and that claimants were not at an unacceptable disadvantage.

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