Administrative court once again stops common practice UWV: WGA-advances cannot be attributed to self-insured employer (ERD)

UWV backlogs

The Employee Insurance Agency (UWV) has been dealing with significant backlogs in social-medical assessments for years. The main causes are a shortage of UWV-physicians and the complexity of the systems. As a result, the social-medical assessments for the Work and Income (Capacity for Work) Act (WIA), Sickness Benefits Act (ZW), Invalidity Insurance (Young Disabled Persons) Act (Wajong), Invalidity Insurance Act (WAO), and Participation Act, are frequently late. For WIA claim assessments alone, there was a backlog of more than 17,000 cases by the end of 2022, according to the UWV Annual Report 2022.

Recently, measures have been taken to reduce these backlogs, such as the simplified WIA claim assessment for those over 60, more effective deployment of UWV-physicians in the ZW, periodic monitoring of the so-called WGA 80-100 group, and the establishment of Social Medical Centres (SMCs). These measures seem to be leading to be reducing the backlog. Further measures, such as adjustment of the application process for WIA reassessments and the temporary measure "Practical Assessment" have been announced. Long-term solutions will be based on the findings of the Independent Commission on the Future of the Occupational Disability System (OCTAS), which issued an interim report on 9 October 2023.

We previously wrote an article on the UWV backlog in relation to the dismissal proceedings at the UWV for long-term incapacity for work due to illness.

WIA claim assessment

An employee who is incapacitated for work due to long-term illness files the WIA-application from the 88th week of disability. Ideally, the UWV will process the application before the end of the 104-week waiting period. If the UWV deems the employee at least 35% incapacitated for work, the employee will receive WIA-benefits immediately after the end of the waiting period. These could either be WGA-benefits based on the Partially Disabled Persons Scheme, or IVA-benefits based on the Full Invalidity Benefit Scheme.

If the employee receives WGA-benefits, this may result in a cost increase for the (former) employer. The publicly insured employer will pay a higher premium for the Work resumption fund (Whk). Employers can opt out of public insurance. They then pay no premium, but bear the risk of any disability benefits themselves (or insure this with a private insurer): the so-called self-insured employer (ERD).

If the UWV grants a WGA-benefit to an employee, it is then attributed to the ERD. The IVA-benefit, for full and permanent invalidity, is not attributed to the ERD.

WGA-advances

If the UWV is late with the WIA claim assessment, the employee may then be deprived of income: after the end of the waiting period, the employer’s obligation to pay wages ends and the employee does not yet receive any benefits. In such cases, the employee can receive an advance on the benefit: the WGA-advance.

The WGA-advance is as high as a WGA-benefit. The first two months 75% of the monthly wage, then 70%. The UWV attributes and recovers these costs from the ERD. The UWV does this on the basis of a phrase from Section 84(3) of the WIA, which states that the UWV recovers the costs of the WGA-advance from the ERD. This phrase has been included in the WIA since 1 January 2022 by the Collective Act on Social Affairs 2022 (Verzamelwet SZW 2022).

No legal basis

Even before 1 January 2022, the attribution of WGA-advances to ERDs was already common practice by the UWV. With the legislative amendment, the legislator wanted to codify this. In case law and literature, the question whether the phrase in Section 84(3) of the WIA is sufficient for this has been debated for some time. Such was the case before the Administrative Court of Arnhem.

This case involved a mechanical operator who was incapacitated for work due to illness. The WIA-application was done on time, but the UWV needed more time to process it. The employee was granted a WGA-advance after the end of the waiting period. This advance was attributed to and recovered from the ERD. The ERD disagreed and appealed this decision.

First, the court considered the ERD's litigation interest. Indeed, the employee had since been awarded WGA-benefits – more than a year later. That WGA-benefit was attributed to the employer ERD retroactively and was set off against the WGA-advances paid, meaning attribution of WGA-advances was no longer an issue. Nevertheless, the employer ERD has an interest in pursuing the appeal against the attribution of the WGA-advances, because it is not "implausible" that the employer ERD has suffered damages as a result of the UWV's conduct, according to the administrative court.

Next, the administrative court answered the question of whether the WIA contains a legal basis for attributing WGA-advances to ERDs. The administrative court ruled that it does not. The phrase introduced with the Collective Act on Social Affairs 2022 is insufficient. This is because the legislative system of the WIA determines that "recovering" and "attribution" of costs are not the same thing. Sections 82 and 83 of the WIA describe when a benefit may be attributed to the ERD; in other words, create a legal basis for attributing benefits to the ERD. There is nothing in these articles about attributing advances. Nor does it follow from the legislative history of the Collective Act on Social Affairs 2022 that the legislature intended to create this authority for the UWV. According to the administrative court: Section 84 (3) of the WIA only stipulates the possibility of recovery, not attribution. Attribution is needed to have recovery.

As such, the administrative court declared the ERD's appeal to be well-founded, set aside the UWV's attribution of the WGA-advances, as a result of which the WGA-advances are not attributed to the ERD. In addition, the administrative court orders the UWV to pay the court fee and the costs of the proceedings.

Different case law, same conclusion

The Administrative Court of Arnhem is not the first administrative court to rule in this way. Both pre- and post-1 January 2022 cases were decided against the UWV:

• An important ruling by the Administrative High Court (CRvB), the highest administrative court in social security cases, was issued on 8 March 2023. The CRvB ruled that neither the WIA, nor the General Administrative Law Act (Awb), contained a basis for allocating advances to the ERD. In doing so, the CRvB followed the ruling of the Administrative Court Roermond. This judgment dealt with the situation before 1 January 2022: the Roermond case prompted the legislature to amend Section 84(3) of the WIA in the Collective Act on Social Affairs 2022.
• The Administrative Courts Utrecht and Almelo ruled on 16 November 2022 and 13 July 2023 respectively, on the question of whether the Collective Act on Social Affairs 2022 created a statutory basis for attribution of advances. These administrative courts, like the case of Administrative Court Arnhem discussed above, concluded that it did not. In their opinion, the law must contain a clear basis, because these are burdensome decisions for the ERD. This does not allow for a broad interpretation of the law: the basis must follow unambiguously from statute. That is not the case now.

UWV cannot attribute WGA-advances to the ERD

It is clear from several administrative court rulings that there is no legal basis for the UWV's common practice of attributing advances to ERDs. Even so, the UWV is not yet changing this practice. Minister Van Gennip has announced in a parliamentary letter that she will not change this policy until the CRvB has ruled on appeal that there is no legal basis after 1 January 2022 either. This appeal is ongoing. It is expected that the ruling in that case will be in line with the aforementioned rulings. The UWV will then have to change its policy, or the legislature will then have to create a legal basis in the WIA. We are keeping an eye on developments and will inform you when more is clear.

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