The government has reached an agreement with Morocco to reduce the amount of benefits paid to families who move there from the Netherlands.

The deal marks the end of a long-running dispute with the government in Rabat over the amount of social security paid to Dutch Moroccan families living in Morocco. The Netherlands had threatened to cancel the social security treaty from January 1 next year if an agreement could not be reached.

A proposed deal was scrapped last September when Morocco tabled an amendment at the last minute to extend the treaty’s provisions to the Western Sahara. The Dutch government does not recognise Morocco’s claim to govern the disputed region.

Rabat has now dropped the demand, social affairs minister Lodewijk Asscher confirmed at the weekend. The new benefit payments will take effect from October 1.

Asscher said a number of other adjustments had been made to the treaty, including a means test to take into account the savings of Moroccan families who are claiming benefits from the Netherlands. Financial arrangements have also been made for a number of people who currently receive child benefit and work incapacity payments.