Minister Paul of Social Affairs and Employment: “An accident or illness can happen to any of us. And then you want to have a decent safety net. But many entrepreneurs currently have no or only limited insurance. For others, insurance is not accessible or affordable. By introducing a basic insurance, we ensure that everyone has certainty. At the same time, we give entrepreneurs the freedom to arrange something suitable through a private insurer or to maintain their current insurance.”

Core of the Draft Bill

The draft bill for basic insurance against disability for self-employed individuals (Baz) ensures that every self-employed person is insured until retirement age. By making participation mandatory, risks can be shared and costs kept relatively low. Self-employed entrepreneurs will then receive a benefit in the event of disability up to a maximum of the minimum wage. Self-employed individuals can also choose to take out private insurance as an alternative, or to maintain their current insurance.

Adjustments

A total of 2,260 responses were received during the internet consultation, from both individuals and companies and social organizations. UWV and the Tax Authorities were also critical of the feasibility. By adjusting the draft bill, the cabinet responds to the criticism. In the amended proposal, the waiting period is extended to two years, the costs for the entrepreneur are lower, and there is an annual switch moment to possibly switch to a private insurer. Both UWV and the Tax Authorities indicate that the draft bill in this form is feasible under certain conditions.

Costs and Waiting Time

In the amended draft bill, the premium is now set at 5.4% of the profit made. Previously, this was still 6.5%. Based on the current minimum wage and the current expectation of costs, this amounts to a maximum of €171 gross per month. With lower profits, the premium to be paid per month will also be lower. The waiting time before someone receives a benefit is also extended to two years. The benefit can then be more often based on definitive data from the Tax Authorities about income, reducing the chance of recoveries. The two-year period also aligns with the two years in which the wages of sick employees are paid before they apply for WIA benefits.

Private Insurances

Self-employed individuals can also choose to take out private insurance themselves, provided it meets certain conditions. They do not have to contribute to the basic insurance. To keep this feasible, there will be an annual switch moment from public to private at the end of the calendar year, similar to how it is arranged with health insurance.

Self-Employed Individuals Who Are Also Employees

A solution has also been added for self-employed individuals who also work as employees and are therefore already insured for disability. If they already have the right to a disability benefit at the level of the minimum wage from WIA, they do not have to pay a premium for the basic insurance for self-employed individuals.