Dutch disability system projected to exceed 1 million recipients amid rising claims
The Netherlands is heading toward nearly 1 million people receiving disability benefits while employers face persistent labor shortages, as political, labor, and business leaders struggle to agree on reforms following failed talks on the future of social security and mounting concerns over systemic incentives that may discourage a return to work, De Telegraaf reported.
At the same time, top-level negotiations between employers and unions over the Dutch social security system have stalled after a failed meeting involving the Cabinet and social partners, leaving the FNV and CNV unions and employer organizations to continue discussions on their own. The impasse comes as pressure grows over the Work and Income according to Labor Capacity Act, known as WIA, and the broader disability system.
Hans Hoogervorst, a former state secretary and health minister, said the current system is fundamentally flawed and rooted in earlier decisions by social partners. “The WIA comes from the kitchen of the social partners,” he said. “When things got out of hand with the WAO, they promised that from then on there would be super strict assessments. Nothing came of that.”
Hoogervorst, who now lives in the United Kingdom but has followed Dutch social security debates since the 1990s, said the Netherlands was once considered “the sick man of Europe,” with more than 1 million people receiving disability benefits. At the time, systems such as Wajong for young disabled people, WAZ for sick self-employed workers, and WAO were widely used. The WAO, in particular, became popular, with employers using it as a way to let older workers go “with a warm hand,” often with union agreement.
He said the transition to the current system was poorly designed from the start. “It is full of wrong incentives. The financial incentives were placed far too one-sidedly on employers, while disability benefits were increased,” Hoogervorst said. He also pointed to the Netherlands’ requirement that employers pay wages for two years during sickness, calling it unique in Europe and a factor that discourages hiring.
“In almost all European countries, workers quickly lose income,” he said. Former CNV leader Doekle Terpstra said the system’s original intent—to focus on what people can still do—has failed. “It has completely failed,” he said. “The work someone who drops out according to the UWV can still do often does not exist.” He described the system as a “bureaucratic swamp” and said, “People are stuck in it. There is system failure, the UWV is drowning. It is similar to the benefits scandal.”
Sven Kelder, chair of the Platform of Private Social Security Providers, said psychological conditions are now the main driver of rising disability claims, particularly since the COVID-19 pandemic. The Dutch public employment agency UWV expects 955,000 people to be receiving WIA benefits by the end of this year, plus about 100,000 more in the sickness benefits system. Some will transition into WIA, which costs the government more than 11 billion euros per year.
He said reintegration efforts often fail after long absences. “After nine months, a typical burnout should be resolved,” Kelder said. “Yet people enter the WIA after two years of sickness benefits.” He added that by the second year of absence, switching employers becomes difficult, and financial risks deter workers from taking new jobs, including the loss of severance payments.
Kelder also said many affected workers are “safety-net cases,” such as temporary agency workers or people on fixed-term contracts, who often receive little employer support for reintegration.
“We want employers to talk to sick employees about their future much earlier,” Kelder said. “Right now they wait too long, partly because of privacy rules and because they do not know what is wrong. As a result, our social security system functions as a safety net, while it should be a trampoline.”
Labor market expert Ton Wilthagen of Tilburg University said the system lacks effective practical implementation despite extensive rules on paper. “We are not very good at this compared to other countries,” he said. He pointed to Scandinavian countries and Germany, where doctors and occupational physicians collaborate more closely.
“In Denmark, they focus especially on people under 40, who still have a long working life ahead,” Wilthagen said. He added that many young, often highly educated women in the Netherlands drop out due to stress and difficulty balancing responsibilities.
He also criticized the complexity of workplace procedures. “The whole system is full of protocols,” he said. “It is like with the national football team: on paper the lineup may be fine, but you do not score goals with it.”
Wilthagen rejected proposals to lower benefits, saying similar measures in Australia and the United Kingdom had limited impact. Hoogervorst and Kelder, however, argued that financial incentives matter. Current disability benefits replace about 75% of previous wages, which they say reduces motivation to return to work.
“Initiating something different after burnout must become more attractive,” Kelder said. “Now people wait once the WIA becomes visible after about 18 months in sickness benefits.”
Delays in medical assessments by the UWV further extend inactivity periods, in some regions exceeding a year, Kelder said, creating nearly three years out of the labor market before a final assessment.
Former union leader Terpstra urged systemic reform rather than incremental fixes. “I am afraid of a patchwork operation,” he said. He suggested a broad redesign similar to pension reforms, potentially shifting execution to the private sector after extensive consultation. “After a thorough discussion of a new system, we should entrust implementation to the private sector. You see it works in pension reform.”
