The cabinet will raise childcare benefits to match the increase in fees paid by parents, despite the social affairs ministry saying last week that it would be unable to keep pace.

The rapid rate of inflation has pushed up next year’s fees by around 10%, but the benefit paid out to compensate parents (kinderopvangtoeslag) was only due to rise by 5.6%, leaving parents to pay the difference from their own pockets.

The ministry said the tax office’s benefit system was unable to cope with last-minute adjustments, but RTL Nieuws reported on Tuesday that the limit was now being raised to 6.54%.

It means the government will cover the cost of childcare up to a maximum of €9.06 an hour for day nurseries and €7.79 for after-school facilities.

Social affairs minister Karien van Gennip had come under pressure from opposition parties GroenLinks and PvdA to raise the level next year, but replied that it would not be possible before 2024.

Opposition parties were concerned not just about the extra burden on parents, but that it increased the likelihood they would give up their jobs and keep their children at home just as the country is struggling with a labour shortage.

The new tariff will come into force from January 1 but parents will receive the old rate until February because the system cannot be reconfigured in time. The second payment of the year will be increased to make up the difference.

From 2025 the government wants to fund all out-of-school childcare directly, a decision taken in the wake of the childcare benefits scandal (toeslagenaffaire) that led to the previous cabinet’s resignation.