NETHERLANDS - Social affairs' minister Piet Hein Donner has announced measures to prevent workers who have taken early retirement under the tax-friendly ‘levensloop' savings scheme from also taking advantage of the tax-facilitated ‘doorwerkbonus', or non-stop bonus, which is meant to encourage longer working.

The closure of the legal loophole is aimed at workers who use the levensloop scheme, as it allows workers to save 12% of their salary tax-free, and then use the balance to finance taxed intermediary leave, such as parental leave, care leave and education, but which can also include early retirement.

The non-stop bonus was introduced on 1 January 2009 and provides employees with a cut in income tax relief of up to 10% of their salary if they continue to work between the ages of 62 and 67. The official retirement age is 65.

But Donner and finance state secretary Jan Cees de Jager have said they plan to remove the tax-friendly treatment of levensloop for retirees aged over 61 from 1 January 2010.

By doing so, the fiscal treatment of levensloop benefits will be on a par with the approach of other pension benefits.

Under the new terms, those affected can only apply for a doorwerkbonus if they keep on working in full or in part, stressed Donner and De Jager.

Donner and De Jager made their announcement in response to inquiries about the undesired effects of the combined arrangements of levensloop and doorwerkbonus from Liberal Democrat MP Fatma Koşer Kaja.

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