Volunteers have enormous value to society. A motion called on the cabinet to explore increasing untaxed compensation for volunteers and carers. In a letter, the cabinet now gives its views on the volunteer scheme.
Cabinet vision
First of all, it is important to keep in mind what volunteering is: work that one performs on an uncompulsory and unpaid basis. It is not intended that remuneration should come first in volunteering. After all, the social or idealistic character and lack of pay are paramount in volunteering.
If a volunteer incurs expenses in the course of carrying out voluntary activities, reimbursement of those expenses is obviously not remuneration; those expenses should be reimbursable to the volunteer untaxed. This would mean that the volunteer would have to declare every (small) expense to the volunteer organisation upon presentation of proof of payment, and the volunteer organisation would have to precisely administer benefits in kind (such as a cup of coffee during the football club board meeting). To reduce the related administrative burden for both the volunteer and the volunteer organisation, the law provides for an untaxed lump-sum expense allowance for volunteers: up to an amount of €210 per month and €2,100 per year (amounts 2025), the law assumes an expense allowance and no payroll tax needs to be withheld.
This also applies to volunteer carers. If a volunteer incurs more expenses than the aforementioned amounts, they can still be reimbursed untaxed, but it must be possible to prove the expenses incurred.
The volunteer scheme in payroll tax is therefore not an exemption, but a flat-rate expense allowance. The government considers the volunteer scheme to be a generous expense allowance; up to an amount of €210 per month and €2,100 per year, volunteers do not have to prove their expenses. This means that the untaxed volunteer allowance covers costs for almost all volunteers. For the few who incur more expenses than the exempted volunteer's allowance, there is still the option to receive a tax-free reimbursement of the excess amount upon presentation of proof of payment.
Since 5 years, the volunteer allowance has been indexed annually. In this way, the ceilings of expense allowances are adjusted annually in line with price increases. Since the introduction of indexation, the annual maximum has already increased by 24% from €1,700 to €2,100.
The government therefore considers it unnecessary to increase the voluntary allowance on a policy basis.
In addition, it may also have unforeseen adverse effects, making it not only unnecessary but also undesirable. Indeed, in certain situations, it is financially more attractive for benefit recipients to accept voluntary work than to accept regular employment. This is caused by the fact that in certain situations, the maximum voluntary allowance exceeds the exempt amount that may be earned on top of benefits. Such displacement of paid work by the voluntary scheme is obviously undesirable and will only increase if the voluntary allowance is increased.
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