Starting in 2027, employers who pay a disability benefit to employees will no longer be able to apply an employment tax credit to it. This change is the result of a ruling by the Supreme Court. They concluded on November 15, 2024, that applying the employment tax credit violates the prohibition of discrimination in human rights treaties since people who receive their benefits directly from the UWV are not eligible for it. The adjustment will have financial consequences for approximately 11,000 people receiving benefits, the majority of whom have (partial) disability benefits.

The largest group of benefit recipients who also work (partially) does not receive an employment tax credit on their benefit from the UWV, as they do not have a legal right to it. However, if the same benefit is paid by the employer, they still receive an employment tax credit at this moment. This applies to approximately 11,000 working individuals receiving benefits. The Supreme Court states that this leads to unequal treatment of benefit recipients. For this reason, the cabinet has decided that an employer, just like the UWV, can no longer apply an employment tax credit to benefits.

Secretary of State Van Oostenbruggen (Taxation, Tax and Customs Administration): “The cabinet shares the Supreme Courts opinion that it is undesirable to treat the same group of people unequally. Therefore, we are changing the rules regarding the employment tax credit. This is a decision we have not taken lightly, as it can have significant consequences for a large group of benefit recipients. Therefore, the rules will only change in 2027, allowing this group of people to prepare as well as possible for the changes over the next two years. It is also my wish to fundamentally address the employment tax credit. This requires time and sufficient political support.”

Minister Van Hijum (Social Affairs and Employment): “The cabinet follows the Supreme Courts judgment to combat discrimination and treat like cases equally. At the same time, we realize that the ruling can have significant financial consequences for people who currently have an extra benefit. That may feel unjust. Therefore, we will continue to engage with the group in question and I endorse the Secretary of States call to work together with the cabinet in the coming period to closely examine the income disparity that has arisen between workers and benefit recipients.”

In their letter to Parliament, Minister Van Hijum and Secretary of State Van Oostenbruggen emphasize that this is a significant adjustment for many people. The adjustment will therefore take effect from 2027; until then, the ministries will engage with people who work alongside their benefits to inform them as well as possible about the consequences of the adjusted regulation. Minister Van Hijum and Secretary of State Van Oostenbruggen also wish to engage with the House of Representatives about the employment tax credit and the growing inequality between workers and benefit recipients.