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Regulations for company starters who receive unemployment benefits
Country of implementation
General short description of the innovation
This law gives UEB-recipients the right to partially continue their ue-benefits for six months when they start their own company, independent of their exact working hours and income.
Type of Policy
Duration of the policy
Since 2006, the regulation has been changed in 2013.
Scope of innovation
- Scope: Structural
- Spatial coverage: National
General description of (intended) objectives and strategies
This act gives UEB-recipients some income security when they start their own company. The objective is to stimulate unemployed to start their own company. Starting a company may also be a strategy for unemployed who have less chances to find employment with an employer.
Nature of the innovation-long-term perspective
structural change of UEB-law
Type of innovation
- new/changed output and/or outcome
- benefit level
Clarification of intended mechanisms, outputs and outcomes (optional)
During the first six months new entrepreneurs are entitled to continuation of their unemployment benefits regardless of earned income and hours worked. In the 2006-version a recalculation was made afterwards, after 52 weeks. 70% of the income earned from the company during the first 52 weeks was used to re-calculate the right to UEB during the first six months (which could mean UEB had to be paid back to the state when the company delivered sufficient income). In 2013 the regulation has changed because the original act led to administrative problems with the ex-post calculations. Since 2013, starting entrepreneurs can ask for a fixed reduction of their UEB of 29% during six months. This reduction is not balanced with real income or hours worked. New entrepreneurs with insufficient income from their company therefore face a reduction of their total income compared to continuation of their ueb. Entrepreneurs who work for their former employer are not allowed to use this regulation.
Intended target group
Unemployed on UEB who want to start their own company
Working age population
- main source of income: social protection (Unemployment benefits)
Actors involved in policy-making/implementation and/or evaluation
- agency or national social insurance body (The social insurance agency UWV determines the benefit level and administers the regulation)
- central state (Regulation)
- benefit eligibility
- benefit level
Did the innovation have any outcome related to job quantity?
It is estimated that the 2006-version of this act has resulted in 1000-1500 additional new companies started by formerly unemployed on ueb each year. The survival rate of new companies has not changed because of the law.
Intended and unintended outcomes
Between 1000-1500 additional companies are founded each year by unemployed on ueb as a result of this regulation
Clarification of outcomes in terms of impacting resilience and labour market inclusion
The 2006-version of this act has been evaluated and shows the regulation increases the number of unemployed starting a company. As a measure to facilitate unemployed to start a company it can be considered effective. Income effects have not been measured.The impact of this result for resilience is unsure. It is not clear whether the unemployed could have found regular employment as well. The 2013 adaptation has not been evaluated yet.