In a recent case, the Council of State ruled that the Municipality of The Hague may not reduce a grant to a care institution if the managers of this institution earn in excess of the WNT standard.

In accordance with the Executives’ Pay (Standards) Act (Wet Normering Topinkomens, WNT), top executives (such as managers and commissioners) in the public and semi-public sectors may not earn more than a minister’s salary. As of 1 January 2016, this maximum salary has been set at EUR 179,000. This so-called WNT standard also applies to top executives of subsidised care institutions.

In the case in question (Council of State 4 May 2016, ECLI:NL:RVS:2016:1177), it was discussed whether the subsidised care institution exceeding the statutory maximum salary formed grounds for the Municipality of The Hague to reduce the grant. As a condition for awarding the grant, the Municipality of The Hague had stipulated that the statutory salary standard should not be exceeded. By law, when awarding grants, the only conditions that may be imposed are those that are designed to achieve the purpose for which the grant is being obtained. The Council of State ruled that the purpose of awarding the grant is the provision of particular care. This purpose doesn’t include pursuing income policy – as is the Municipality of The Hague’s aim. Therefore the grant couldn’t be deducted on the basis of the managers of a care institution earning more than the statutory salary standard.

Please note that the WNT standard may be lower than EUR 179,000 in practice. After all, five salary standards exist in the healthcare sector, the highest category being the minister’s standard. Classification into a salary standard is subject to a range of criteria, including the complexity of the organisation that’s to be managed. If you have any doubts as to your situation or the transitional scheme, please don’t hesitate to get in touch.