Changes WGA (partially disabled persons) 2017
From January 1st 2017 major changes will take place concerning the charge of the WGA costs (for employees who are partially disabled) on employers. These changes can give undesirable situations with major financial consequences.
Funding opportunities WGA per January 1st 2017
Currently, employers pay two different premiums to finance the costs for the WGA:
- one (differentiated) premium for the ‘WGA Vast (/Fixed)’
- one differentiated premium for the ‘WGA Flex’ (this concerns e.g staff with a temporary employment, who went out of service sick and enter the WGA.
For WGA Vast (/Fixed), you can choose to insure this risk at the UWV or an insurer. If you pass on the risk to an insurer, we call this "self-insurer shelf for the WGA”. For WGA Flex you are obligatorily insured until January 1st 2017 by the UWV.
The WGA Vast (/Fixed) and WGA Flex will be joined together from January 1st 2017, so that the financing of the whole WGA will take place from a single premium. These changes can give undesirable situations with major financial consequences. Regardless of whether you currently are self-insurer for the WGA or not, as of January 1th 2017, you are automatically insured by the UWV, both for WGA Flex and Vast. Unless you take action, now!
If you are not yet self-insurer, then your application must be received by the Tax Office before October 1st, 2016 . If you are already self-insurer for the WGA, you have delay until December 31, 2016.
What this means to you?
We would like to explain what these changes mean for you. And why need to take action right now. We support you with our expertise. After an inventory, we will perform a market research for you to to advise you. Of course we can also help with any implementation. Contact us for more information or to make an appointment.
Read more about disability benefits in The Netherlands
Since 1st January 2006 disability benefits are granted by the ‘Work and Income according to Labour Capacity Act’ (WIA). The WIA consists of two legal provisions:
- the regulation governing income protection for people registered as completely incapable of work due to disability (IVA);
- the regulation governing the re-employment of people with a partial disability (WGA).
The amount of benefit depends on the degree of incapacity to work, on the reintegration level and on the level of the last earned wage.
More about Fully disabled persons (IVA)
Under the terms of the IVA scheme, an individual is defined as ‘fully disabled’ if he is unable to earn more than 20% of his previous salary. The assessment as to whether an individual is completely disabled can – depending on the situation – be carried out in one of two ways: solely on medical grounds, or based on a combination of medical and work-related factors. An individual is registered for long-term disability if he has sustained a longterm loss of work-related capacity from which he is unlikely to recover. The public insurance company’s doctor will assess the probable duration of incapacity due to illness. As a rule, the claim is reassessed after two years of sick leave. The level of benefits for people who are fully and permanently disabled is 75% of the (maximum) daily wage.
More about partially disabled persons (WGA)
The WIA (the Disablement Insurance Act) has two aims: to promote reintegration and to protect the income of employees, who are restricted in their employability due to illness or a disability.
The primary aim is to promote returning to work, i.e. to increase the long-term reintegration of employees with (temporary) health-related work restrictions. The Act entitles employees under the pensionable age to benefits, if they are still (at least 35%) unfit for work after 104 weeks of disability.
The allowance system consists of the following:
- After two years of sick leave, a partially disabled person can claim wage related benefits under the regulation dealing with the re-employment of partially disabled people (WGA). The allowance is 70% (1st two months 75%) of the (maximum) daily wage if the partially disabled person is unemployed and 70% of the difference between the (maximum) daily wage and the person’s work-related income if he is working. The duration of the wage-related WGA allowance depends on the person’s employment record.
- When the wage-related WGA allowance ends, the partially disabled person will be entitled to a WGA follow-up allowance if he is not working, or is not doing enough paid work. If he is doing sufficient paid work, he will be entitled to a wage supplement. The term ‘sufficient paid work’ means that the employee must be earning a wage-related income, which is at least 50% of his residual earning capacity.
1) If the partially disabled person does not meet this criterion, he will be entitled to a WGA follow-up allowance, which is 70% of the legal minimum wage multiplied by the percentage of disability.
2) If the partially disabled person does meet this criterion, he will be entitled to a wage supplement which is equivalent to 70% of the difference between the (maximum) daily wage and his residual earning capacity.
In principle, a partially disabled person can claim benefits under one of these two schemes until his pensionable age. An assessment will be carried out to establish for each month whether the individual is entitled either to the WGA follow-up allowance or to the wage supplement.
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