Household debt assistance the Dutch wayBasically, there are two main groups of people in western countries, namely people who put money in their own pockets and people who put money in the other people’s pockets by donating their time as employees and by paying bills for rent, utilities, healthcare, food and so on. If the people in the second group are required to put increasingly more money into other people’s pockets without simultaneously also receiving more income to make up for the deficit, they fall into arrears.

People in the second group are largely replaceable as there as so many of them. Making sure that their income remains sufficient to pay the bills is, therefore, a lower priority for most governments than making sure that people in the first group get what they want.

It also tends to be important to blame the deficits in the lower-income group on some type of character flaw or a lack of skills rather than on government decisions. When governments come up with household debt assistance, that is basically aimed at making themselves look better.

As household debt assistance is also a major industry, people in arrears also put money into the pockets of other people that way, either directly or indirectly. This means that there is no real driver to remedy the situation and erase the existence of arrears by eradicating its root cause.

This explains so much. The Dutch approach currently includes a process called "vroegsignalering" (early alerts).

In this process, the debtor’s local municipality is informed about the arrears, usually without the debtor’s knowledge. The local municipality can then take certain steps and that basically resembles everything that collection agencies do and more, including swatting.

It’s the creditors who report the arrears, not the debtors. It’s the creditors’ interests that are protected by this approach, not the debtors’.

The question "how do you manage to feed yourself" or information about local foodbanks or a gift card system for food, it's not part of any of this. There is no concern for the debtor other than the incessant stressing that you must be a really dimwitted person.

Having lived in England for around two decades and having seen first-hand what massive inequality looks like, I was horrified when I stumbled upon vroegsignalering. It’s hard to see how a democratic government not only can be comfortable with the system of vroegsignalering, but also has plans to expand this system and start including for example study loans.

The discussion even mentions including small arrears in internet and phone bills and that’s because being a little behind can get people's internet access shut down. I believe that vroegsignalering is likely to increase inequality and take agency away from perfectly capable people.

It is well known that traditional debt advice too can actually plunge people into major financial problems that they didn’t have before. Vroegsignalering is far too Orwellian.

In England, the phrase “nanny state” is often used with regard to the provision of benefits and advice about healthy eating and so on, but this vroegsignalering is an indication of what a real nanny state might be like, with a Gattaca-style stratified society. This ill-advised legislation was sprung upon Dutch municipalities by a right-wing government with little to no guidance as to how local government should carry out these novel obligations.

The approach that some municipalities take amounts to subjecting citizens to intimidation and malicious harassment, completely out of the blue and without explanation. Stripping people in poverty of their human and civil rights cannot possibly have been the intention of this legislation, however.

This book gives suggestions for how to do better. Version date: 1 September 2024.