Government pushes ahead with mandatory disability insurance for self-employed

The government aims to fast-track legislation requiring self-employed workers to have disability insurance. Minister of Labor Thierry Aartsen said after the weekly council of ministers meeting that the bill will be sent to the Tweede Kamer, the lower house of Dutch parliament, despite significant criticism from the Council of State and others.

Plans for mandatory disability insurance for self-employed workers have been underway for years. The policy was part of the 2019 pension agreement reached by trade unions, employers, and the previous Cabinet.

Implementation, however, has been challenging, particularly regarding how agencies like the UWV and the Tax Administration could manage it. The current coalition’s intention to move forward with the measure was already outlined in its coalition agreement.

The scheme targets self-employed workers without existing private coverage against income loss. They will pay a monthly premium of up to 171 euros and must maintain their own savings, as they are responsible for covering the first two years of disability.

The Netherlands Bureau for Economic Policy Analysis (CPB) recently warned that the two-year period without coverage limits the benefit of the insurance for many self-employed workers. Aartsen defended the plan, calling it “a basic insurance, a social safety net for the self-employed.”

He explained, “We are balancing two priorities. We want to provide enough coverage to prevent people from falling into hardship or poverty, but if the coverage is too generous, the costs would be enormous.”

The Council of State had recommended that the mandatory insurance for self-employed workers be implemented as part of a broader simplification of the disability system. The UWV is already heavily occupied with managing the WIA and its associated challenges. Introducing an additional scheme would further complicate the disability system, according to the government’s chief legislative advisor.

The government’s decision to fast-track parliamentary proceedings also has a financial incentive. The mandatory insurance is among the labor market reforms pledged to Brussels to qualify for billions in funding from the European COVID-19 recovery fund.