A woman has to repay her housing benefit for 2021 because her Box 3 assets are too high. In order to reduce her assets, she is trying to claim prepaid health insurance premiums as a debt.
Tax return and housing benefit
For the year 2021, the woman submits a tax return showing a taxable income from savings and investments of nil, based on assets of €36,342 and no deductible debts. The final tax assessment is issued in accordance with this return. She later receives the final calculation of her housing benefit for 2021, which is set at €0 because her assets are too high. For single people, the asset limit for housing benefit in 2021 is €31,340.
Application for debt relief
The woman lodges an objection. She wishes to include a DUO debt of €4,671 and a credit card debt of €1,952. She later adds a debt of €1,805 for the health insurance premiums paid in advance for 2021. In 2020, the woman agreed to pay the premium for 2021 in a single instalment. The inspector declared the appeal inadmissible, treated it as a request for an ex officio reduction and took the DUO and credit card debts into account (after applying the debt threshold), but not the health insurance premiums. The income base is set at €32,909. This is still above the asset limit for housing benefit.
Not to blame
The court has ruled that, for a Box 3 liability to exist, it must have existed on the reference date (1 January 2021) and have a market value. On 1 January 2021, despite the commitment, there is as yet no obligation to pay the health insurance premiums. Furthermore, health insurance constitutes a coherent set of rights and obligations (premium versus cover). As long as the right to cover and the obligation to pay both exist, this does not, on balance, represent any market value. The prepaid health insurance premium is therefore not a deductible debt in box 3. The court sees no reason to disregard the statutory box 3 rules, including the debt threshold, on the grounds of their impact on benefits.