The Senate passed a law on Tuesday 13 October ending the right to penalty payments when the IND misses its deadline on a residence permit.
It was presented as an asylum measure, but the asylum ministry says it covers all regular permits, including those for highly skilled workers, students and family migrants.
The IND should decide within six months, and applicants can now go to court to claim a payment for each day it is late.
Once the law takes effect, judges can only order the IND to decide within a set period.
The government dropped a similar plan in 2024 over EU law concerns, and the ministry could not yet say what had changed.
In September, asylum minister Bart van den Brink told MPs the IND had paid out close to €100 million, with some asylum applicants receiving over €100,000.
The IND says the payments do not speed things up and will calculate what it pays regular applicants in the coming weeks.
D66, which opposed the asylum package in April, backed the law but said scrapping the payments must come with steps towards faster procedures.