Social security in the Netherlands is well organized compared to other countries in Europe and the rest of the world. There is a distinction between social provisions and social insurance. With regard to social security, a division can be made into: social provisions, employee insurance and national insurance. Employee insurance and national insurance fall under the heading of social insurance. The facilities and insurance are coordinated to ensure that there is no overlap, but also no gaps. Social security has been cut back in recent decades, but the most important safety nets have remained in place. This article explains the insurance and facilities within our social system in more detail.
Who pays for social security?
Social insurance is raised by charging premiums to employers, employees and other residents. No premiums need to be paid for social services. These burdens are fully borne by the government. The costs are therefore raised from tax income. Together we raise the amounts to maintain social security.
Function of social security
The function of social security is to provide a minimum subsistence to people who cannot provide their own income. In addition, people with insufficient income have the option to supplement their income up to the subsistence minimum.
What is meant by social facilities?
Those who are not entitled to benefits from employee insurance or national insurance, but who cannot provide for themselves, may be entitled to a (supplementary) benefit from social services. The laws behind social services are:
- WE – Investing in Young People Act
- WWB – Work and Social Assistance Act
- IOAW – Income Provision Act for Older and Partially Disabled Unemployed Employees
- IOW – Income Provision for Older Unemployed Act
- TW – Benefits Act
- IOAZ – Income Provision Act for Older and Partially Disabled Former Self-Employed Persons
- Wajong – Disability Benefits Act for Young Disabled Persons
What is meant by national insurance?
Every resident of the Netherlands is compulsorily insured for national insurance. Non-residents are also insured if they pay payroll tax. Dutch people who are temporarily not residents of the Netherlands and do not receive any income here are not insured under the national insurance schemes. For example, for the AOW, this can cause a gap in the accrual of the rights to a benefit from the AOW. The laws behind national insurance are:
- AOW – General Old Age Pensions Act
- ANW – General Surviving Dependents Act
- AWBZ – General Special Medical Expenses Act
- AKW – General Child Benefit Act
What is meant by employee insurance?
These insurances are intended (as the name suggests) for employees. These are mandatory insurances for the majority of employees. The insurance provides benefits in connection with illness, disability and involuntary unemployment. The laws behind employee insurance are:
- WW – Unemployment Act
- WIA – Work and Income according to Labor Capacity Act
- WAO – Disability Insurance Act
- ZW – Sickness Benefits Act
Other laws relating to social security
There are four more laws that also fall under social security, but cannot be classified under the above headings. This concerns the following laws:
- Wazo – Work and Care Act
- Wulbz – Expansion of the obligation to continue paying wages in the event of illness
- Zvw – Health Insurance Act
- Pemba – Premium differentiation and market forces in disability insurance