The following applies to both the housing benefit and the healthcare allowance: means test. This test means that there is no entitlement to these allowances if the value of assets is too high. This is based on the value of assets in Box 3 (income from savings and investments), as applied for the purposes of income tax. Box 3 includes, amongst other things: bank and savings balances, securities, other receivables and other immovable property.
When determining the value of assets in Box 3, an allowance is taken into account. No tax is payable on the value of assets up to this allowance in Box 3. In 2015, the tax-free allowance per taxpayer amounts to €21,330 (for tax partners, this means that €42,660 of assets is exempt from tax in Box 3). The exact amount of the tax-free allowance for 2016 is not yet known, but it is unlikely to differ significantly from the 2015 figure.
Up to and including 2015, this tax-free allowance for people entitled to the state pension (AOW) on a limited income in Box 1 will be increased by the elderly supplement. This allowance amounts to €28,236 or €14,118 per partner (depending on income in Box 1 and the level of assets in Box 3). However, this allowance will be abolished with effect from 1 January 2016. As a result, people entitled to the state pension (AOW) in Box 3 will become liable for tax sooner, but they will also meet the means-testing criteria for healthcare and housing benefit more quickly, meaning they will no longer be entitled to these benefits.
The means test in the housing benefit considers only the basis for taxation in box 3. This means that if the assets taxable in box 3 exceed the tax-free allowance, there is no entitlement to housing benefit. A single person who is eligible for the higher rate of the elderly person’s allowance in 2015 may therefore have assets taxable under Box 3 of up to €21,330 + €28,236 = €49,566 in order to (subject to the means test) be entitled to housing benefit.
In 2016, the elderly person’s allowance will be abolished and, in order to be eligible for housing benefit, the taxable assets in Box 3 for the same person may amount to no more than €21,330.
Older people receiving housing benefit, whose assets taxable under Box 3 exceed the tax-free allowance, have until 31 December 2015 to reduce their assets in Box 3. If they do not do so, their entitlement to housing benefit will lapse with effect from 2016. This is because the assessment date for Box 3 assets in 2016 is 1 January 2016. Anything that happens in 2016 will only count towards the 2017 means test.
The means test in the healthcare allowance is more generous. Here, too, the tax base in Box 3 is taken as the starting point, meaning that the abolition of the elderly person’s allowance has the consequences outlined above. However, above the tax-free allowance for Box 3, an exemption of €82,504 applies to the means test for the healthcare allowance (this is the amount applicable for 2016).