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Law on work and income according to capacity (WIA)

Country of implementation
The Netherlands
General short description of the innovation
Last of a series of reforms of the public disability insurance scheme since the late eighties, meant to decrease the number of disability benefit claimants as well as to stimulate labour market participation of (partially) disabled workers. This innovation includes stricter eligibility criteria, a new system for determining the level of income support, re-integration services and the possibility for employers to arrange private insurance and re-integration instead of relying on public insurance. Earlier reforms already increased the responsibility of employers with regards to prevention of disability and unemployment of sick worker during the first two years of sickness as well as differentiation of social contributions. Also, the criteria for determining the degree of disability where tightened before.
Target group
Disabled
Policy Field
  • employment
  • general fiscal
  • social
Type of Policy
  • public
Duration of the policy
Since december 29th 2005
Scope of innovation
  • Scope: structural
  • Budgets: the budget for WIA-benefits depends on the number of claimants and their level of disability, around 12 billion in 2012, around 1.8% of gdp
  • Number of intended beneficiaries: in 2012 around 7% of the economically active population received disability benefits. But the innovation is targeted at the whole working population with alleged occupational disabilities.
  • Spatial coverage: national
General description of (intended) objectives and strategies
The innovation is first of all meant to prevent entry into the disability benefit scheme by stricter criteria for defining disability. Secondly, the policy aims to stimulate re-integration into work of disabled people with remaining ?working capacity?. People can only claim this benefit after a period of two years in which the employer and the employee are obliged to look for possibilities for re-integration into work (see: act on gatekeeping). Only workers who are considered to have an earning capacity of 65% or less of their last wage are entitled. When people are entitled to a benefit after these two years, they are stimulated to re-integrate when they are considered to have a remaining working capacity of 20% or more. They can use re-integration services and they receive a higher benefit when they start working (often part-time). People considered to have a working capacity of 20% or less have the highest replacement rate with regards to their former income and do not have to re-integrate as long as their working capacity remains low. The strategy therefore consists of maintaining social protection for a smaller group of severly disabled, the introduction of financial incentives to accept work, services to find work as well as strict eligibility criteria. Employers moreover have the option to avoid the public insurance, by becoming ?risk carrier?. This means they are responsible for both benefits as well as re-integration of their disabled working during 10 years. Normally this risk is insured by private insurance companies.
Nature of the innovation-long-term perspective
This innovation is part of long-term structural reform of public disability insurance in the Netherlands, in response to a exponential rise in the number of disability benefit claimants in the eighties
Type of innovation
  • new form of policy implementation/delivery
  • new/changed output and/or outcome
  • retrenchment or expansion of an existing/earlier policy
New outputs
  • benefit eligibility (the percentage of disability for working in suitable jobs has to be 35% or more to become eligible. Before this was 15%. This means workers with ?light? handicaps cannot receive benefits anymore. Claims can only be made after two years of sickness, paid by the employer, meant to prevent benefit claim all together.)
  • benefit level (a complex system for determining benefits has been introduced, which rewards partially disabled people who start or keep working. Workers who are permanently disabled for 80% or more, receive higher benefits than before, non-working, partially disabled may be confronted with lower earnings depending on how much they work)
  • governance (employers can choose private insurance to cover the risk of disability)
  • job guidance, coaching and/or counselling (the social insurance company (UWV) offers job guidance and placement services)
Clarification of intended mechanisms, outputs and outcomes (optional)
The innovation, together with earlier reforms, is meant to keep sick workers whenever possible at work, to prevent entry into disability benefit and to stimulate labour market participation whenever benefits recipients are not considered to be almost completely disabled. Incentives are directed at both employers as well as employees. The overall outcome is meant to be a substantial lower number and percentage of disability benefit claimants as well as increased labour market participation of partially disabled workers.
Intended target group
Workers with occupational disabilities and recipients of disability benefits
Working age population
  • main source of income: paid work
  • main source of income: social protection
Employers-private institutional actors
employers
Actors involved in policy-making/implementation and/or evaluation
  • agency or national social insurance body (social security agency UWV, responsible for implementation)
  • central state (regulation)
  • employers (organised or individual)
  • private for-profit organisations (commercial) (re-integration companies)
Clarification of the role of various actors
The public scheme is mainly administered by UWV, which may contract private re-integration companies. Insurance companies are responsible to realize the scheme for employers who are ?risk bearer?.
Intended output
  • benefit eligibility (has been tightened, disability has to be determined at a 35% or more in relation to suitable work)
  • benefit level (benefits level depends on whether partially disabled start or continue working. Completely and permanently disabled receive a fixed percentage of their last wage (75% of last income, with a maximum of more or less 50.000 as last income))
  • governance (employers can choose to use private insurance to cover the risks for disability of their workers)
  • job guidance, coaching and counselling (coaching and/or counseling: services are offered to aid disabled to re-enter work.)
Did the innovation have any outcome related to job quantity?
no figures are available about actual employment rate of disabled workers, but inflow into benefits has decreased compared to the old scheme which may indicate a larger employment rate
Intended and unintended outcomes
he annual percentage of new claimants of disability benefits in relation to the economic active population has dropped from around 2% in 2000 to around 0.5% since 2005.
Clarification of outcomes in terms of impacting resilience and labour market inclusion
The separate effect of this innovation is hard to determine, because it is part of a larger reform package to prevent long-term sickness and disability (specifically the law on gatekeeping and the law on determining disability). The official evaluation however states that about one third of the massive drop in new claimants for disability benefits since 2001 (from 100.000 every year to around 30.000 every year) can be attributed to this new policy. This is partly explained because of the stricter eligibility criteria, which mean people under 35% disability cannot enter the scheme anymore. However, what happens to this <35% group in terms of income and participation is not documented well. A larger than expected part of the new claimants results to be more than 80% disabled and does not have to re-integrate. Labour participation of claimants with 35-80% disability has not increased in comparison with the former scheme, but claimants under the new scheme are considered to be more serverly handicapped given the stricter selection. Also, there is a large group of disabled without employer (?vangnetters?), whose participation in work significantly lags behind because they don?t have a relation with an employer anymore where they could re-integrate into work. The income situation for partially handicapped who keep working as well as of completely handicapped has improved. Partially disabled without work however may face income deterioration, depending on their personal situation. The scheme as increased the use of re-integration services. The evaluation does not observe differences in outcome between the public and the private schemes. / / To summarize, the main effect of the scheme is a massive drop in the number of new claimants of disability benefits. This appears to have contributed to higher participation rates, given that the percentage of disabled workers with social protection in the economic active population has decreased. The activation effect once people enter the scheme appears to be modest: participation in work of benefit claimants has not improved compared to the old scheme. Completely handicapped are better protected financially than before, but partially handicapped run a greater risk on poverty as long as they don?t find suitable work. Different outcomes between public and private implementation are not evident until now. /
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