Higher retirement age projected to strain disability benefits for employees over 60

Raising the AOW retirement age faster, as proposed by the coalition parties, is projected to lead to more disabled employees aged 60 and above. A spokesperson for the UWV confirmed this after the story appeared in De Telegraaf and Trouw.

At present, the AOW age increases by eight months for every extra year of life expectancy. Starting in 2033, D66, CDA, and VVD propose aligning the AOW increase directly with life expectancy, accelerating the rise toward age 70. This is expected to generate more entrants into the WIA disability program, with several hundred additional people likely affected for each three-month increase in the retirement age, according to the UWV.

“The past few years have shown a rise in WIA applications among people aged 60 and above,” the spokesperson explained. “A higher retirement age raises the likelihood of disability in this age group, since they face a longer period of exposure to illnesses or limitations that hinder their ability to work.”

The UWV reports that for every month the AOW retirement age rises, the number of people over 60 entering the WIA disability scheme grows by an average of 0.2 percent. While this would increase WIA spending, it would reduce AOW payouts. Net savings are projected, with structural savings estimated at almost 2.8 billion euros per year by 2060.

The initial impacts will not be seen for a while. The AOW age is fixed until 2031, and it remains uncertain in which years the one-to-one adjustment with life expectancy will push the retirement age higher. This will depend on future changes in life expectancy.