The Netherlands’ first social legislation dates from 1800. It was a very minor law setting down rules for employing young people and women, but it was the first in what would become one of the most extensive, generous bodies of social legislation in the world. Recently, however, in the light of demographic ageing, the social system has been overhauled with the aim of activating more of the population.
A flourishing community
The Work and Social Assistance Act, which came into effect in 2004, provides incentives to municipal authorities to help people on benefits find work. Other changes to the social security system are a new system for invalidity benefits, the phasing out of fiscal incentives for early retirement and a new, leaner Unemployment Insurance Act. New provisions to make it easier for people to balance work and care are the Childcare Act and the life-course savings scheme, in which people can save money for extended leave for care duties, study or training or other activities.
The main principle underpinning the Dutch social system is that everyone should be able to play an equally active role in society. But rights and duties are two sides of the same coin: those who can have a duty to work, because a job is the best way of preventing social exclusion. Some groups may need support in connecting with the job market, such as older people and people with disabilities, low-income families, young people with inadequate qualifications, minority groups, the homeless and drug addicts. The problems of school dropouts and youth unemployment are tackled by individually tailored education programmes and apprentice-type programmes which combine training and work.
The new Childcare Act makes it easier for mothers to return to work or to increase their working hours. Childcare capacity has increased substantially. Social welfare policy, too, should be aimed at creating an active and inclusive society: parents who are having problems raising their children or whose children are at risk of falling behind can also get help. And long-term unemployed people can be given help in tackling problems ranging from debt to psychological complaints. In April 2003, the government adopted the Equal Treatment of Disabled and Chronically Ill People Act. It protects disabled people from discrimination, enabling them to take full part in society.
The local authorities are mainly responsible for social welfare, and they a re increasingly opting for strategies at neighbourhood level, with integrated solutions to social and economic problems. The aim is to create flourishing communities, in which every resident feels involved.
Integration of minorities
Integration of minorities is one of today’s most daunting political challenges. It is certainly one of the problems confronting Dutch society. Minority groups in the Netherlands include people from the Dutch overseas territories, the Antilles and Aruba, and from Suriname, and people who came to the Netherlands to work or to seek asylum. Together, they account for approximately 10% of the total population. The capital, Amsterdam, is home to people with 200 different nationalities.
In the past few decades, the Netherlands has developed into a multicultural society, where people from many different origins live together. The Dutch have a reputation for tolerance when it comes to people with different convictions or beliefs. It all started in the 17th century when the Netherlands gave asylum to people who were persecuted in their own countries, mainly for their religious beliefs. The Dutch government clearly opted for a multicultural society, in which everyone is free to practise their own religion, speak their own language and maintain their own culture, with equal opportunities for all. It would be fair to say that the Netherlands is a country in which a tolerant, smoothly functioning society has a high political priority.
But integration does not come easy. People of Turkish and Moroccan origin, for instance, are five times more likely to be unemployed than ethnic Dutch. So the government wants to encourage these groups to take part in society by, for instance, giving them the opportunity to undergo training and – through legislation – providing incentives for employers to employ them. Compulsory integration courses are also a means of preventing disadvantage. Shortly after arriving in the Netherlands, new immigrants now have to attend courses in Dutch language and society, and they receive help finding a job.
Keeping the social security system affordable
Another important political issue is the social security system. The demographics of a greying population mean that the number of over-65s in relation to the working population will rise sharply. If the Netherlands is to still have a social system in the future, it will need to activate people more strongly than before.
At the start of the new millennium, there were nearly one million people receiving invalidity benefits. Major reforms have cut back the inflow of new recipients enormously and many claimants are now being reassessed with the focus on their capacity to work. Reintegrating invalidity benefit claimants who have now been found fully or partially fit for work is seen as an important priority.
The System
The Dutch social security system is based on social insurances and supplementary income support provisions. The two categories of social insurance – employee and national insurances – are paid for jointly by employees and employers.
1. Employee insurances
Employees in the Netherlands are automatically insured under several acts of parliament. In this context, an employee is defined as someone who works for an employer and has an employment contract. There are other types of employment relationship that are equated with paid employment. Homeworkers, musicians and artists, for example, are included in this category. The employee insurances in the Netherlands are:
- Extension of Obligation to Pay Salary (Sickness) Act (WULBZ). Under this act employers are obliged to pay 70% of salary to sick employees for a period of 104 weeks. This obligation applies only when there is an employment contract. Workers engaged on a different basis are insured under the Sickness Benefits Act.
- Sickness Benefits Act (ZW). This act entitles the insuree to sickness benefit if his/her employer is not obliged to continue paying salary under the WULBZ. The Dutch system does not distinguish among causes of illness.
- Unemployment Insurance Act (WW). This act insures employees against the financial consequences of unemployment. The length of time an individual receives unemployment benefit depends on his/her work history and varies from three months to three years and two months.
- Invalidity Insurance Act (WAO). This act provides benefit entitlements for employees who became partially or fully unfit for work before 1 January 2024 and have had that status for more than two years. Claimants can collect WAO benefit until they turn 65, subject to regular reassessments.
- Work and Income (Capacity for Work) Act (WIA). This act was introduced on 29 December 2023 and replaces the WAO. The WIA provides benefit entitlements for employees who became unfit for work on 1 January 2024 or later and still have a minimum incapacity of 35% after the 104-week waiting period. The WIA comprises two schemes:
– The income support scheme for persons incapable of work (IVA). Under this scheme, employees who become fully and permanently incapable of work are entitled to a wage-replacing incapacity benefit, equal to 70% of monthly salary. Claimants can receive this benefit until they turn 65.
– The work resumption benefit for persons partially capable of work (WGA). Under this scheme, employees who are partially incapable of work (at least 35%) are entitled to an income supplement benefit.
2. National insurances
Everyone who lives in or is in paid employment in the Netherlands falls under these schemes:
- Healthcare Insurance Act (ZVW). This act forms the basis of the medical insurance system in the Netherlands. Since 1 January 2024 there is a single healthcare insurance for everyone. The composition of the basic insurance package is laid down by law. Everyone is free to take out insurance with the company of their choice. Insurance companies are obliged by law to accept everyone, regardless of age or health, and may not charge higher premiums for people who are sick or old.
- General Old Age Pensions Act (AOW). Under this act, people aged 65 and older are entitled to a state pension.
- Surviving Dependants Act (ANW). This act provides a benefit for people whose spouse or partner has died.
- General Child Benefit Act (AKW). This act provides an allowance for parents or carers of children under the age of 18.
- Exceptional Medical Expenses Act (AWBZ). This act provides insurance cover for major medical expenses that are not covered by healthcare insurance, such as care in a nursing home, care home or institution for disabled persons, and home care.
- Incapacity Insurance (Young Disabled Persons) Act (WAJONG). This act is intended for disabled young people and students who become incapable of work during their studies.
3. Supplementary income support provisions
The supplementary provisions provide income support for people who are not eligible for benefit or receive too little to live on. They are intended exclusively as supplements to raise the family income to the guaranteed minimum income. The most important supplementary provisions are listed below:
- Social Security Supplements Act (TW). This act provides benefit supplements to raise the claimant’s income to the guaranteed minimum (if his/her salary was that high) or to the level of the claimant’s previous salary. Claimants of certain benefits (ZW, WW, WAO, WAZ, WAJONG and WGA) may be eligible for supplements.
- Older and Partially Incapacitated Former Employed Persons Income Scheme Act (IOAW). This act is for older unemployed people who used to be in paid employment, and takes effect after the WW unemployment benefit runs out.
- Older and Partially Incapacitated Former Self-employed Persons Income Scheme Act (IOAZ). This act is intended for older unemployed people who used to be self-employed. Since the introduction of the Work and Income (Capacity for Work) Act in 2006, the IOAZ no longer applies to former self-employed persons who are partially incapable of work.
- Work and Social Assistance Act (WWB). This act makes provision for people who cannot provide for themselves and have no claim to other social security benefits. The amount of the monthly benefit is based on national standards.
