NETHERLANDS - The Labour Foundation (Star) has suggested terms of use for the "levensloop", or life course, tax-friendly savings scheme would be more attractive to workers if they were widened to help people deal with a general loss of income.

The body representing employers and employees suggested - in a confidential letter and discussion paper to the government - participants should be given access to part of their allowance on a yearly basis, rather than only when they intend to use the saved assets.

The levensloop currently allows workers to save 12% of their salary on a tax-efficient basis to help cover the cost of intermediate leave, such as study, parental and care leave.

Although the product was originally designed to discourage early retirement, its terms currently allow the balance to be used for this purpose.

But introduced in 2006, the uptake of the levensloop has been low as just 7% of workers participate in the levensloop. Instead, over 40% take part in the tax-free savings scheme known as "spaarloon", which entitles to save €613 a year untaxed.

Workers cannot participate in the levensloop or the spaarloon at the same time. However, the employers' organisation VNO-NCW said it wants this barrier to be abolished.

"We want to see a widening of the options for spending the balances, but within the limits of the available government funds," a spokesman pointed out. "We support a mixed package, which allows people to spend savings on taking leave from work and other situations."

Star advises the government, in its discussion paper, to change levensloop into a fiscal scheme for loss of income while at the same time, in Star's opinion, the government should extend the yearly tax allowance of  €188 for leave taken to be available every year.

The large union FNV said it would prefer the levensloop and spaarloon to be merged into one scheme, in which the spaarloon balance could subsequently be used for levensloop purposes, according to its pension negotiator Chris Driessen.

"We think keeping both schemes and allowing for a double benefit will be too expensive, and therefore is not a realistic option," Driessen told IPE.

The agricultural employers' organisation LTO also wants the levensloop as be made accessible to sole traders, according to its spokesman Gerard van der Griend.

However, with Star, MKB Nederland, the organisation for small and medium-sized businesses, is opposed to extending the use of the levensloop, although MKB has been opposed to the levensloop since its inception.

"We are against new kinds of leave, because we already have serious problems in attracting sufficiently qualified staff," explained its spokesman Mario van Mierlo explained.

Almost two years ago, a group of six experts - including Lans Bovenberg, one of the levensloop's designers - advocated the scheme being merged and changed into a fiscal scheme for loss of income.

The six argued in order to increase the popularity of the new levensloop, the tax discount on the eventual use of the levensloop balance and on the spaarloon balance, should be replaced by a government contribution into the levensloop.

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