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WWZ – Work and Security act – Unemployment Benefits Law (WW)

After more than two years of bickering (through the Kunduz agreement, Coalition agreement and Social agreement), our government has now established the new’ Law ‘Work and Security’ (hereinafter referred to as ‘WWZ’), which has become applicable law by means of publication in the Government Gazette (so-called ‘Staatsblad’) on 25 June 2014. The WWZ encompasses changes in law in various areas and these changes also have several different effective dates. The three most important areas of the WWZ are:
  1. Flexible Labour
  2. Dismissal Law
  3. Unemployment Benefits Law (hereinafter referred to as ‘WW’)
This article discussed the changes in the field of Unemployment Benefits Law (WW).

3) WWZ and Unemployment Benefits Law (WW)

The WWZ also significantly changes the Unemployment Benefits Law (WW). The intent is that the WW must stimulate unemployed workers to actively look for new jobs so that the period they receive WW is shortened. The WW should function as a safety net, but also be springboard to new jobs.

WW-duration (current situation)

At the moment, the maximum period for receiving WW is 38 months and consists of:
  1. the ‘basic’ WW (‘basisuitkering’) for a period of 3 months. This is the so-called week-requirement (‘wekeneis’) and you are eligible for this benefit if you have worked at least during 26 out of 36 weeks immediately prior to becoming unemployed. The number of hours worked per week in this 26 week period is not important.
  2. the ‘extended’ WW (‘verlengde uitkering’) for a period of maximum 35 months. This is the so-called year-requirement (‘jareneis’) and is coupled to your work-history. You are eligible for this benefit if you qualify for the week-requirement ánd you have worked at least 4 out of the 5 calendar years prior to becoming unemployed ánd you have received a salary during at least 52 days of each of those 4 calendar years.
The work-history is calculated by UWV on the basis of two separate periods: your actual and your fictitious work-history. The actual work-history consists, until 1 January 2013, of the years as of 1997, during which you been employed for at least 52 days per annum. The year in which you become unemployed i.e. when your WW benefit payments start, is to be excluded from this calculation. As of 1 January 2013, it is not the number of days but the number of hours you have been employed i.e. for which you have received the so-called ‘SV-loon’ (Social Insurances Wages, or the salary over which your employer(s) has(ve) paid social insurance premiums on your behalf), otherwise known as salaried hours (‘verloonde uren’). The minimum qualification for a year to count towards eligibility for WW built-up is 208 hours per annum. In some cases a year in which you have received less than 208 hours SV-loon can still (partially) count, for instance if you had a period of unpaid leave or was taking care of a child. The fictitious work-history consists of the years counted as of the year you became 18 years of age up to and including 1997. Whether or not you have worked in this period is not important. The sum of the actual and fictitious work-history is your total work-history. For each year of your total work-history you are entitled to 1 month WW-benefits, up to a maximum of 38 months. The amount of WW for the first two months of unemployment is 75% of the day-wage (‘dagloon’), and as of the third month and for the remainder of the WW benefit period you are entitled to based on your work-history, it is 70% of the day-wage. The day-wage is based on the salary as reported in the last wage-tax filing period prior to the wage-tax filing period during which the unemployment has commenced. The day-wage is however maximized at gross E 198,28 (as of 1 July 2014) per day. Furthermore, the day-wage includes 8% holiday allowance. Holiday allowance is reserved and usually paid out in the month of May.

Shortening WW-duration

Under the WWZ, the maximum WW duration will be shortened step-by-step; by 1 month per quarter, to a maximum of 24 months, effective 1 January 2016 and until 2019. By collective bargaining agreement employers can agree to provide an extension to the maximum WW duration, however with a maximum of 14 months. These new rules will not apply to people who become unemployed prior to 1 January 2016 and the amount of WW will not be changed.

Accepting suitable work

Under the current rules, unemployed workers must also accept work which lies one level below their educational level after 6 months of having received WW. After 1 year of having received WW, the unemployed worker must accept all available work as suitable. Under the WWZ, unemployed workers must accept all available work as suitable after 6 months of having received WW, irrespective of their educational level and even if this means that the salary is lower than the amount of WW. This rule comes into effect per 1 July 2015.

Income settlement

At present, if an unemployed worker starts (part-time) in a new job, the number of hours that he will work will be subtracted from the number of hours for which he receives WW. This means that, in case the new job pays a salary which is less than the WW amount, this leads to a lower total income. To avoid this in future, a system of income settlement will be introduced, effective 1 July 2015. In this system, the earned salary will determine which amount will be subtracted from the WW amount. The intention of this change is that it will always pay off for an unemployed worker to start (part-time) working again. If an unemployed worker starts (part-time) work again, 75% of the salary earned will be subtracted from the WW amount during the first 2 months. After the first 2 months, 70% of the salary earned will be subtracted. As such, the unemployed worker will retain 25% respectively 30% of the salary earned, which can be seen as a supplement to the WW amount. Once the salary earned amounts to 87,5% of the monthly salary, the WW benefit stops.

Most Important Changes – Effective Dates

1 July 2016 Unemployed workers must accept all work as suitable after 6 months WW 1 July 2015 Income settlement WW amount based on salary earned instead of hours worked 1 January 2016 Start step-by-step shortening of maximum WW duration from 38 to 24 months with 1 month per quarter (until 2019) 1 January 2016 Extension of shortened WW duration possible by collective bargaining agreement (max. 14 months) 1 January 2016 Built-up WW rights: 1 month for the first 10 work-years; after this ½ month WW per year worked For a complete overview of the effective dates of the new WWZ please see: Law Work and Security, Overview Effective Dates