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Social security & pension

The aim of social security in the Netherlands is to provide a guaranteed income for all those for whom it is not possible (or no longer possible) to support themselves independently by working. The underlying principle is that people who are afflicted by unemployment, invalidity, or illness must be given the opportunity to exercise their political and civic rights on an equal footing. The money required to do this is generally provided by the working population on the basis of the philosophy of solidarity or shared risk. However, for the first year of absence from work through illness, sick pay now has to be provided by the employer.

Social security in the Netherlands can be divided into National Social Security (Volksverzekeringen) and employee social insurance schemes (Werknemersverzekeringen). National Social Security applies to all residents of the Netherlands and the benefits are not related to someone’s salary. The employee social insurance schemes are confined to employees; benefits are related to the pay last earned, and are received in the event of loss of pay because of illness (after the first year of absence) and permanent disability for work and unemployment.

Exceptional medical expenses
The costs of exceptional and in particular expensive care, such as long-term nursing and home-care are covered by a few acts. Before you are entitled to coverage of the costs you will get an approval from a general healthcare institution.

Unemployment insurance (WW)
If you become fully or partly unemployed, you can apply for a WW benefit – a benefit under the Unemployment Insurance Act (WW) – to compensate for the loss of earnings. This benefit is paid out for a certain term and serves as a bridge between two jobs. Among the conditions attached to this benefit is the explicit understanding that you must be available for work. The period of time that you spent working is also taken into account. The amount and the term of the benefit you receive depend on your employment history.

Occupational disability insurance schemes (WIA)
In the Work and Income according to the Labour Capacity Act (WIA), the focus is on work; that is, on what people are still capable of doing. Employers and employees are encouraged by financial incentives to do everything they can to help those who are partially occupationally disabled to get work or stay in work. At the same time, income protection is provided for people who are truly no longer capable of working.

Child benefit (AKW)
The General Child Benefit Act (AKW) offers parents a contribution towards the costs of raising and caring for children aged up to 18 years. The Social Security Bank (SVB) implements the scheme. How much Child Benefit a person receives depends on the age of the child.

Sickness benefit (ZW)
The Sickness Benefits Act (ZW) only applies to people who do not have or who no longer have an employer, such as temporary employment agency workers. The sickness benefit amount to at least 70 percent of the daily wage, which is subject to a maximum. People who do have a job will continue to receive part of their salary from their employer over a certain period of time that can add up to 24 months. Depending on your sector and collective employment agreement.
If you start working as a self-employed person, it is in certain situations possible to be voluntarily insured under the Act.

Participation Act
The Act on Participation grants a minimum income to anyone legally resident in the Netherlands who has insufficient means to support himself. Social assistance is provided to a household. If someone from that household has adequate income, the household is not eligible for assistance. This means that someone without income living with a partner or parents with adequate income is not eligible and neither is someone with sufficient assets. Social assistance is therefore a safety net facility.

Pension
Pension in the Netherlands is generally based on two main pillars: the General Old Age Pensions Act (AOW) and an additional private pension provision.
The General Old Age Pensions Act (AOW) is a basic pension. The age of which you are entitled to receive the AOW is gradually being raised from 65 to 66 years (in 2018), 67 years (in 2021) and 67 and 3 months (in 2022). In addition, the AOW grants a supplementary allowance to people entitled to an AOW pension whose respective partners are under the mentioned age and have only limited or no incomes.

You build up your AOW through your tax contribution; your private pension is paid by your employer as part of your remuneration (note that not every employer has a pension scheme). Besides these two pillars, you may choose to arrange a private pension provision such as life annuity (lijfrente) or lifetime saving schemes.
The Dutch tax law has several provisions for saving for the future, and within limits, the contributions are tax deductable. You might consider contacting a financial advisor to find out if and what kind of future provision you may need.

More detailed information on national social security and employee’s social security is available at:

Social Security Bank (Sociale Verzekerings Bank/SVB)
Ministry of Social Affairs and Employment