News De Unie

The cabinet wants to shorten the maximum duration of unemployment benefit to one year. This means that if you are dismissed, you will have a shorter entitlement to a wage-related benefit.

In addition, it is proposed that the maximum daily wage be reduced by 20%. This maximum sets the upper limit for unemployment benefit.

The cabinet is also proposing to significantly limit accrual. Currently, for every year worked in the first 10 years, you accrue 1 month of unemployment benefit. If this cabinet has its way, this will be halved to half a month per year worked. This means that after ten years of employment, you will only be able to rely on unemployment benefit for five months instead of 10 months, and will otherwise have to fall back on social assistance.

In addition, the reference period requirement is being adjusted, meaning you will have to have worked for longer to even qualify for the short-term unemployment benefit of 3 months. Both have major consequences, especially for young people.

The benefit in the first two months of unemployment benefit should be increased from 75% to 80%.

Sample calculation (indicative):

• Current maximum daily wage ≈ € 6.600 Gross per month
• Unemployment benefit for the first two months: 80% in the first two months → approximately € 5280 Gross per month
• Unemployment benefit after 2 months (70%) → € 4620 Gross per month

If the maximum daily wage 20% falls:

• New maximum ≈ € 5.280 Gross per month
• Unemployment benefit for the first two months (80%) → approximately € 3.960 Gross per month
• Unemployment benefit after two months (70%): € 3696 Gross per month

That's a difference of nearly €1,000 gross per month at maximum benefit.

For middle and higher incomes, this can therefore mean a significant drop in income.

The plans involve a reduction in benefits under the WIA in several areas. The most significant changes relate to (1) the benefit ceiling and (2) the abolition of IVA (for new entrants).

1. Maximum daily wage for benefit purposes
   The government wants to reduce the maximum daily wage – the upper limit used to calculate unemployment benefit (WW) and disability benefit (WIA) – by 20%. According to the figures currently being circulated, this amounts to a reduction of approximately € 6.617 to € 5.293,60 gross per month (based on the current monthly maximum).
   This particularly affects people with middle to higher incomes: their benefit is “capped” more quickly, meaning the income gap during unemployment or incapacity for work becomes larger.
2. Abolition of VAT
   Currently, people who are fully and permanently incapacitated for work under the IVA scheme receive a benefit of 75% of the (capped) daily wage. Under the proposed changes, the IVA distinction for new entrants will be abolished, bringing this group into line with the current standard under the WGA: 70% instead of 75%. This group will also be subject to reintegration obligations and the risk of reassessments.
   Important: according to the budgetary annex to the coalition agreement, current recipients of IVAs will retain their IVA entitlement at the moment of introduction.
3. WGA: shorter ‘longest-related’ phase
   For people in the WGA, the wage-related phase is shortened because it is linked to the duration of unemployment benefit, which is being reduced to one year by the government. This means you will enter a follow-up phase more quickly, with the risk of a low follow-up benefit which is often far below the social minimum. In some cases, people are entitled to a supplement from the UWV up to the social minimum.

For people with supplementary insurance for an excess, it depends on the policy terms whether this difference is compensated (and for how long).

For the state pension (AOW), the intention to further increase the state pension age means that you may become entitled to your state pension earlier than previously agreed in the Pension Agreement. In the coalition agreement, the state pension age is linked 1-to-1 to the increase in life expectancy, as opposed to 8 months per year of life as part of the pension agreement.

Image: Old Age Pension plans Cabinet (image: NOS.nl)

This can mean:

• Working longer, for the youngest generation even beyond the age of 71.
• Or bridging a period with own funds or pension.