NETHERLANDS -  The Labour Participation Commission, appointed by minister of social affairs Piet Hein Donner, today suggested the Dutch state pension (AOW) should be overhauled as one of its key recommendations.

The commission, installed last year after a row over redundancy laws and headed by chairman of the Dutch postal service company TNT, Peter Bakker, today said the AOW should be fully "fiscalised" as a key measure to get more people to work and to keep them at work for longer.

In the proposed scenario, the AOW will then no longer be paid through contribution from salary - labelled as premiums - but from taxes, while pensioners above a certain income should be taxed on their AOW pension payments from 2011.

Moreover, the commission recommends the pension age should be raised from 65 to 67 by 2040.

"In the long-term, it is especially important enough cover is found for the rising, demographic age-related expenses. The combination of raising the AOW and pension age and 'fiscalising' the AOW will contribute to this in the long-term," concluded the Commission.

Other recommendations include shortening the benefits under the Unemployment Insurance Act (WW), which should start later and last just 18 instead of the current 38 months.

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