Netherlands: New Mandatory Disability Insurance for Self-employed Workers Is Expected in 2027

A new legislative proposal introduces mandatory disability insurance for self-employed workers. This means that self-employed individuals will be required to pay up to EUR 195 per month in premiums for a public-basis insurance that will assist them in cases of work incapacity. The legislation is expected to come into effect in 2027.

Disability Insurance

The insurance aims to prevent self-employed workers from being unable to work and consequently relying on other income sources. The terms will be as follows:

• Self-employed individuals who have been ill for a year may be eligible for disability benefits.
• They will receive this benefit if they are no longer able to earn the minimum wage.
• The benefit amounts to 70% of the pre-disability income.
• The right to benefit ends if the insured person is no longer incapacitated for work, or if a ground for exclusion arises (i.e., reaching retirement age, custodial sentence, no longer living in the Netherlands).
• Self-employed individuals will pay approximately 6.5% of their business profit as a premium, up to a maximum of EUR 195 per month. This premium is tax-deductible.
• The requirement does not apply to directors and major shareholders (DGA’s), as they are considered less vulnerable.

Opt-Out for Self-Employed Individuals

The proposal includes an opt-out option, allowing self-employed workers to choose a private disability insurance plan instead. However, this plan must meet the following conditions:

• no lower premium than the public insurance premium;
• a waiting period of no longer than one year, and
• a guaranteed payout until the state pension age.

Key Action Points for Human Resources and In-House Counsel:

• Mandatory disability insurance for self-employed workers is expected to be introduced in 2027.
• The premium will be up to a maximum of EUR 195 per month.
• It is possible to opt out by purchasing private disability insurance.
• The requirement does not apply to directors and major shareholders (in Dutch, abbreviated as DGA’s).