Administration and allowance accounts

In the Netherlands, administration accounts or allowance accounts are often used when someone is unable to manage their own income and expenses.

There are various reasons why people are unable to manage their own finances properly. This may be permanent for people with a severe intellectual disability. It may also be temporary, for example for people with an addiction or large debts.

Someone who is unable to manage their own finances needs help with banking and payments. A bank can take various measures to this end. The bank first assesses what the account holder is capable of and allowed to do. If necessary, someone else must be given control over banking and payment matters.

Is someone temporarily or permanently unable to manage their own banking affairs? In that case, a power of attorney or banking authorization can be arranged with the bank. This authorization ends when the account holder dies or becomes legally incompetent. Legal incapacity means, among other things, that someone is no longer able to make independent decisions about their own financial affairs. This can be the result of, for example, dementia, a coma, or another permanent medical or psychological condition.

Family administration

In the event of incapacity, a notarized power of attorney or living will is required. Alternatively, the court may appoint an administrator. This may be a family administrator.

Assistance is provided by a family member or acquaintance of the person under administration.
The person has sufficient trust within the family of the person under administration.
Professional training is not required. Those who help must meet certain requirements. For example, they must be reliable and legally competent.
The subdistrict court assesses whether the person is suitable for the task.

A payments account with family administration

Ask the bank whether family administration is possible. The bank will inform you about how family administration can be arranged.

Professional administration

Sometimes the situation is too complicated for family administration or there is no suitable relative available. In that case, professional administration can be requested.

This administration is carried out by a professional administrator.
There are strict requirements for an administrator.
The administrator must report to a court every year.
The administrator is the point of contact for the client who needs help.

A payments account under professional administration

Some banks offer accounts for administrators. An administrator makes arrangements with a bank for this. The administrator can then apply to that bank for a management account for a client. The administrator can then also apply for a living expenses account for the same client. Together, these accounts ensure a clear separation between the financial management by the administrator and the money that the client can spend themselves. This separation helps to prevent debt and provides a better overview.

In some cases, a bank may consider the risk of opening an account for a client to be too high, for example because the client was recently involved in financial fraud. The bank will then refer the administrator to the client’s last bank to apply for a management account.

If someone is listed in the External Referral Register (in Dutch), the only option for that person may be to apply for a basic bank account with a Dutch bank. An administrator listed as a recognized care provider on the basic bank account website (in Dutch) can help with this.

Management account

A management account is requested by an administrator: a professional administrator or income manager.
The professional administrator or income manager meets the rules for applying for a management account at a bank.
A management account is in the name of the client receiving assistance. The client becomes the account holder of this account.
Only the administrator has access to the management account.
All of the client’s income goes into the management account. The administrator uses this money to pay the client’s fixed expenses. The client can receive the money that they are allowed to spend themselves in cash or in a living expenses account.
If the administration ends, inform the bank. The bank will assess whether the management account can become a regular payments account for the client. The administrator’s access will end as soon as the bank receives notification of this from a court.

Living expenses account

A living expenses account only exists alongside a management account.
The account holder receives living expenses in a living expenses account. The administrator of the management account deposits these living expenses into the client’s living expenses account. This allows the client to dispose of these living expenses independently.
At most banks, a living expenses account can receive amounts from accounts other than the management account. The administrator can ask the bank to ensure that the living expenses account can only receive amounts from the management account. Amounts for the living expenses account from other accounts are then returned to the payer. Such a living expenses account is called a closed living expenses account.

Non-bank account providers

Banks are not the only payment service providers that offer payments accounts. There are also so-called EGI’s (Electronic Money Institutions) that offer payments accounts.

At FinGuard, an administrator or trustee who is a member of a recognized trade association can apply for an administration account and living expenses account. If the administration or trusteeship ends, the administrator closes the account.

Foreign payment service providers (including banks) can sometimes also offer payments accounts in the Netherlands.

All providers of payments accounts in the Netherlands