System in The Netherlands

Summary

The Netherlands ranges among the countries with the highest number of people receiving disability benefits (8.2% of the population). Around 100,000 people work in the 92 supported employment facilities in the country. The government is aiming for greater inclusion of these employees into the open labour market.

The Dutch legislation divided people with disabilities into two groups: those that are fully incapacitated and those that are partially incapacitated to work. The legislation aims at encouraging people, who are partially incapacitated, to use their remaining potential to seek employment by implementing a monetary reward system. A distinct law is in place to regulate labour in sheltered employment, which also seeks to support people with moderate and severe disabilities in their transition to the open labour market.  

Subsidies are given to employers, who hire people with disabilities for at least six months. Several plans are underway to encourage employers to engage, particularly young, people with disabilities in their enterprises. In future, the employer will pay only for the actual productivity of the disabled employee. The aim is to reduce the number of people working in supported employment to 30,000 during the next 30 years.

General figures

There are approximately 1.7 million people with a moderate to severe physical disability, including visual and auditory impairments, living in the Netherlands.[1]This equals 12% of the overall population.

There are 92 sheltered workshops employing 100,000 people with disabilities. 50,000 people work within the sheltered workshops, 30,000 are posted within companies and 20,000 are working in services outside the workshops and within society.

The number of people receiving general disability benefits (WAO) and disability benefits based on capacity to work (WIA) has reduced drastically in recent years: it fell below 600,000 in 2010. By contrast, the number of young people receiving benefit paid pursuant
to the labour provisions for Young Disabled People (WAJONG) increased to 205,000.

In 2010, 8.16% of the population aged between 20 and 64 received disability benefits. 46.85% of people with disabilities aged between 15 and 64 were employed (Men: 51.07%, women: 43.88%).[2]

Despite the recent drop, the number of people of working age in the Netherlands who receive disability benefit is still among the highest in the member countries of the Organisation for Economic Co-operation and Development (OECD): in 2008, 8.2 % compared to the OECD average of 5.7%.

The disability benefit caseload is high at all ages, but especially so for young adults aged, 20-34, at 3.5% compared to an OECD average of around 1.5%. New claims are especially frequent at age 18.

Public spending on sickness and disability makes up 3.7% of the Netherland’s total GDP, compared to an OECD average of 1.9%.[3]

Unemployment rates for people with severe mental disorders are about 10% higher compared to those without such a mental disorder, and 6.2% higher for people with a moderate mental disorder (2011).[4]

The Netherlands has signed but not yet ratified the UN Convention on the Rights of Disabled People. The current government policy is directed toward greater inclusion, and committed to raising the percentage of labour market participation from 70% to 80% by 2016.[5]

At the end of 2006, 89,817 working positions were realised and 99,333 people from the target group were working within the framework of the Sheltered Employment Act (WSW). The target group comprises people (< 65 years old) who, due to physical, mental or psychological limitations, will only be able to undertake regular work under adapted conditions. Of these people, 3% worked at a so-called „supervised workplace‟ with a regular employer. 19% were posted from a sheltered employment company to a regular employer, most (78%) worked at so-called sheltered employment companies.[6]

Legal Framework

The Employment Capacity Act - Wet Werk en Inkomen naar Arbeidsvermogen (WIA) – came into effect on 1 January 2006. Like its predecessor, the Invalidity Insurance Act - Wet op de Arbeidsongeschiktheidsverzekering (WAO) - it makes no distinction between social risk and occupational risk. The WAO is still in force for people who reported sick before 1 January 2004 and who were assessed as disabled. People who reported sick after this date are entitled to WIA.

Wet Werk en Inkomen naar Arbeidsvermogen (WIA)

The WIA consists of two statutory provisions:

 

·      the Regulation governing income protection for individuals registered as wholly or permanently incapacitated (IVA)
·      the Regulation governing the re-employment of partially incapacitated individuals (WGA).
 
It has two aims:
·      to promote reintegration and to protect incomes of employees who are restricted in the work they can do due to illness or incapacity.
·      to promote a return to work to increase the long-term reintegration of employees with temporary and permanent health-related work restrictions.

 

A fundamental distinction is made between employees who are both wholly and permanently incapacitated after two years and those who are temporarily incapacitated, as they have different employment potentials.[7]

Regeling Inkomensvoorziening Volledig Arbeidsongeschikten (IVA)

The IVA provides an income for long-term severely (80-100 per cent) disabled individuals.[8] A person who is both fully and permanently incapacitated is no longer able to earn his own living. The government will therefore assume responsibility for ensuring adequate income through the Regulation governing income protection for individuals registered as wholly incapacitated. The IVA is based on payment of 75% of the full daily wage.

Individuals who are temporarily wholly incapacitated qualify for benefit under the terms of the WGA scheme. They can be transferred to the IVA scheme, if they are still found totally incapacitated after a certain period of time. Until then, they receive the full WGA benefit of 70% of their daily wage. Thereafter, they receive IVA benefits as long as their full incapacitation lasts. This ensures that individuals, who are wholly but not necessarily permanently incapacitated, are given every opportunity to recover and return to work.

Werkhervatting Gedeeltelijk Arbeidsgeschikten (WGA)

The WGA provides payments for partially disabled people (defined as 35-80 per cent incapacity) and short-term severely disabled (80-100 per cent incapacity) people.

This benefit system prioritises efforts to maximize capacity for work. It tries to encourage individuals to use their residual earning capacity as much as possible. The labour must be financially remunerated.

After two years of absence, the partially incapacitated individual can claim a wage-related benefit payment under WGA. The level of this benefit is 70% of the (maximum) daily wage, if the partially incapacitated individual is not working, and 70% of the difference between the (maximum) daily wage and the individual’s work-related income, if he or she is working.

The WGA is divided into three possible payments. The income related payment, starts after the first two years of sickness. It lasts between six months and five years, which will depend on the number of years the employee has worked. During this time, the employee receives a steady income to compensate the partial loss of their working ability, regardless of whether the employee is working or not.

The income related payment is succeeded by a lower level payment or a higher supplement payment, both lasting until age 65 depending on utilisation of the remaining capacity to work. If the disabled person does not work enough, that is they utilise less than 50 per cent of their assessed capacity to work, they receive the lower level payment. If, however, they utilise 50 per cent or more of their assessed capacity, they are granted the higher supplement payment.

Wet sociale werkvoorziening (WSW)

The aim of the WSW or Sheltered Employment Act is to create suitable work opportunities for people with a severe physical, intellectual and/or mental disability who want to work, but are not able to work under normal conditions without a wage cost subsidy for compensation of the reduced productivity, for guidance on the job and for necessary adaptations of the workplace.

The WSW offers the opportunity for work in special sheltered employment companies and for supervised work in a regular job outside sheltered facilities. The objective is to provide adapted work under as normal conditions as possible. The target group comprises people (< 65 years old) who due to physical, mental or psychological limitations will only be able to undertake regular work under adapted conditions. The aim of adapted work is to maintain or develop the labour skills of the WSW target group. People working outside sheltered employment have the right to return in case a placement in the mainstream market does not succeed. The minimum wage (18,000 € per annum) and pensions are guaranteed.

Municipalities are responsible for the WSW. The municipality seeks to ensure that as many people as possible in the target group are offered an employment contract that meets the capability and the needs of the individuals to carry out work in adapted conditions. Municipalities often work together with other municipalities in a job creation cooperative or in administrative units.

There are three forms of work for people within the framework of the WSW:

·      A person of the WSW target group can work in so-called sheltered employment companies.
employment companies.
·      A person of the WSW target group can also be posted from a sheltered employment company to a regular employer. The employee then officially works for the municipality (or administrative unit) but in practice works in a normal work environment.
employment company to a regular employer. The employee then officially works
for the municipality (or administrative unit) but in practice works in a normal
work environment.
·      A person of the WSW target group can also sign an employment contract with a regular employer. The worker will be supervised in the workplace. Agreements on supervision are reached in advance with the employer and employee. In the case of supervised work, the municipality provides the employer with a subsidy to offset the relatively lower productivity of the worker and to cover the cost of vocational integration and supervision in the workplace.

The WSW provides workers in sheltered employment with largely the same legal position and employment conditions as employees working in normal conditions. The employment conditions are regulated by collective agreement. The sheltered employment collective agreement (CAO- WSW) is reached following negotiations between the Association of Dutch Municipalities (VNG, on behalf of the employers) and the trade unions.

The collective agreement contains, amongst other items, provisions on working time, working hours, pay and overtime. When an employee works in one of the two forms of work as described above, he or she receives the CAO-WSW. If an employee has an employment contract with a regular employer the collective agreement of the regular employer is applicable.

Support Measures for Employers

 

While the National Employment Reform Programme (NERP) for the Netherlands identifies improving the labour supply as one of the of the highest priority challenges and the European Commission recommends that the Netherlands takes further measures to improve the labour supply of disadvantaged groups, disabled persons are not specifically mentioned in the NERP.

The government has implemented a temporary law, which allows employers to pay workers with a disability (whatever their age) less than minimum wage. Municipal governments are then obliged to supplement wages, in each case to a level higher then the benefit the worker would have received otherwise. Employers will also get full compensation for adjustments necessary in the workplace for some employees with disabilities.[9]

In the Netherlands, an agreed subsidy (called a ‘placement budget)’ is provided for employers as a compensation for hiring a disabled person for at least six months or permanently. In addition, a subsidy (called a ‘reallocation budget’) can be provided to an employer who allocates a new job to an employee who has become unable to perform the job for which he/she was initially employed.

Alternatively, public subsidies can be provided to employers who request a tailored subsidy package where the reintegration costs exceed the placement budget or reallocation budget.

In the Netherlands, subsidies may be granted to the employer or to the disabled employee for the costs of ‘facilities’/’services’ related to (re)integration. These extra costs may vary from special furniture, to transport facilities, to education or training facilities, etc.[10]

The national government has also made agreements with municipal governments, trade unions and national organisations of employers to start several pilots, aiming to establish best practices to help young people with disabilities to get regular jobs, best training and to enhance their chances of progressing from sheltered employment to regular jobs.

Several plans are in progress to stimulate employment of people with disabilities. The two ticks campaign, originating in Great Britain, started in 2009 in the Netherlands. In this campaign employers can use a national logo in an advertisement to state that they invite applications from jobseekers with disabilities. There will also be a campaign to lessen the bureaucratic burden for both employers and employees with disabilities.

Support Measures for Young People with Disabilities

In response to the continuous growth of the number of young disabled people receiving a disability employment benefit, the Government has revised the Regulation of benefits for young disabled people – the Wet arbeidsongeschiktheidsvoorziening jonggehandicapten (WAJONG).

According to the new law, in effect as of January 2010, young people with disabilities receive an individual participation plan, stating available assistance to find a job or vocational training. There is no automatic right to a benefit but any wage will be supplemented to a level higher than that of the minimum benefit. The higher the wage that jobseekers succeed in getting, the higher their total income will be.

On reaching the age of 27, a new assessment will be made to see if they need permanent additional disability benefit. This new regime applies to all people with disabilities reaching the age of 18 and applying for disability benefit WAJONG. Each year 15.000 people apply for this benefit in the Netherlands. It is estimated that two thirds of them will get an individual participation plan. The other third is considered too severely disabled to work and will receive a WAJONG benefit (75% percent of minimum wage).[11]

Financing

A sheltered workshop is always owned by one municipality or a group of municipalities, which is responsible for policy and finance. Sheltered workshops receive a subsidiary per person per annum of 25,000 € in 2011.

The WSW is mainly financed by the state. Municipalities receive a government subsidy for the implementation of the WSW. For the year 2008, 2.3 billion € were available for municipalities to realise 89,917 workplaces within the framework of the WSW.

An average of 25,337 € are available per working position within the framework of the WSW.

At the end of 2006, 89,817 WSW working positions were realised and 99,333 people from the WSW target group were working within the framework of the WSW. Of these people, 3% worked at a so-called „supervised workplace‟ with a regular employer. 19% were posted from a sheltered employment company to a regular employer. Most (78%) work at the so-called sheltered employment companies.

Future Strategies

From 2013 onwards, the Dutch government wants to change the WSW law as they perceive 100,000 people in sheltered employment as too many; in comparison to other European countries this figure is very high. According to the Dutch government, the new law helps achieve an inclusive society, as it does not discriminate against people with disabilities. People with more than 30% productivity can find a job in the open labour market with support from the municipalities and only those really in need of support remain in the workshops.

The aim is to have 30,000 people in sheltered workshops, while all others should be working in mainstream employment. A gradual decrease is planned over a period of 30 years. As a matter of fact, the number of people in sheltered employment is already decreasing on its own as more people are going into retirement, and only one person is admitted to sheltered employment for three people that have retired.

From 2013 onwards, people on benefits will be assessed on the grounds of their economic productivity against the job they should be doing. The employer will then pay only for the productivity, while the municipality will compensate the rest of the salary up to the minimum wage. This reduces the risk for employers, as they only need to pay for a worker’s productivity, which then makes the worker and the employer more competitive in the open market.

In effect, these changes will mostly affect about 300.000 people living on benefits as the budget will then flow towards the 30,000 people in sheltered employment and not towards measures helping people with disabilities to get back to work. It will become much easier, however, for people with disabilities to work in a normal working environment, as acceptance amongst employers will rise.

The aim of the amendment of the WSW law is to integrate people better into society. Many companies now want to include people with disabilities into their work force in order to live up to their corporate responsibilities. Areas, which are reluctantly served by the main work force, such as cleaning and green keeping, are now being increasingly serviced by people with disabilities. The demand is increasing.[12]

Credits

We would like to thank our member CEDRIS in the Netherlands for the support in providing information for this country profile.

 
[1] The Netherlands Institute for Social Research/SCP 2011: Disability. Accessed at: http://www.scp.nl/english/Topics/A_E/Disability [6.6.2011]
[2] OECD 2011. Towards a more inclusive labour market. In: OECD Economic Surveys. OECD: OECD Publishing.
[3] OECD 2010. Sickness, Disability and Work: Breaking the Barriers. Netherlands. Accessed at http://www.oecd.org/dataoecd/20/30/46461580.pdf [6.6.2011]
[4] OECD 2011. Mental Health and Work Project. Accessed at: http://www.oecd.org/document/20/0,3746,en_2649_33933_38887124_1_1_1_1,00.html [7.8.2011]
[5] Schoonheim, J. and Smits, J.C. 2007: Report on the employment of disabled people. Netherlands. ANED.
[6] OECD 2007. Sickness and Disability Schemes in the Netherlands. Accessed at http://www.oecd.org/dataoecd/35/30/41429917.pdf [6.6.2011]
[7] OECD 2007. Sickness and Disability Schemes in the Netherlands. Accessed at http://www.oecd.org/dataoecd/35/30/41429917.pdf [6.6.2011]
[8] Towers Watson Research and Ideas 2010. The Changing Disability System in the Netherlands. Accessed at http://www.watsonwyatt.com/europe/pubs/healthcare/render2.asp?ID=15253 [7.6.2011]
[9] Schoonheim, J. and Smits, J.C. 2007: Report on the employment of disabled people. Netherlands. ANED. 
[10] ILO 2011: Achieving Equal Employment Opportunites for People with Disabilities through Legislation. Accessed at http://disability-employment-legislation.itcilo.org/index.html [6.6.2011]
[11] Schoonheim, J. and Smits, J.C. 2007: Report on the employment of disabled people. Netherlands. ANED.
[12] Anke Seidler 2011: Research Interview with CEDRIS, the Dutch umbrella organisation for social organisations for employment and labour. Notes held.