Final report OCTAS: three variants for a future-proof occupational disability benefits system

Occupational disability benefits system under pressure

We wrote earlier about the backlogs at the UWV, the shortage of insurance doctors, and the bottlenecks in the occupational disability benefits system. Minister Van Gennip appointed the Independent Committee on the Future of the Occupational Disability Benefits System (OCTAS) because of these issues. OCTAS was tasked with evaluating the occupational disability benefits system and advising the legislator on a future-proof system. OCTAS was tasked with coming up with several directions for solutions to the fundamental and structural bottlenecks.

OCTAS’ interim report

In October 2023, OCTAS published its interim report assessing the current occupational disability benefits system. That assessment was not mild. The committee identified many – often long-standing – bottlenecks; even more than it thought it would find. The biggest sticking point, and most urgent problem, is the complexity of the system. The system is incomprehensible to people, they cannot oversee the consequences of their actions for their benefits, and therefore are afraid to do something wrong: the system paralyzes them. In addition, the most vulnerable individuals experience the greatest disadvantages, the implementation is hampered by staff shortages and regulatory pressure, and the system does not stimulate work enough, which leaves work capacity unused and increases the distance to the labor market of those who are disabled.

OCTAS’ final report

On 29 February 2024, OCTAS presented its final report to the legislator. According to the committee, the occupational disability benefits system of the future must provide more "attention, confidence and security" for all involved.

OCTAS recommends focusing first and foremost on prevention. Effective prevention prevents sick leave and long-term disability. The healthy work environment, a shared responsibility of employer and employee, should receive more attention.

OCTAS does not offer a ready-to-use solution to the problems, but recommends that the legislator chooses one of three variants:

1. Current system but better
2. Work comes first
3. Basis for working people

The starting point for all variants is that complexity must decrease: people must be able to understand the system. In addition, trust must be the a founding principle. People should not be punished harshly if they make a mistake: the humanity of the system must return. This is heard more often since the Child Care Benefits Scandal. A bill with this humane approach was submitted for Internet consultation, but was received critically by the Council for the Judiciary. OCTAS emphasizes that employers have an important role to play in any variant.

Current system but better

The first variant remains the closest to the current system. That system once worked well. This variant addresses bottlenecks quickly and effectively, particularly by reducing complexity.

Changes that OCTAS recommends include:

• adopt a single benefit regime in the Work and Income (Capacity for Work) Act (WIA), instead of the current distinction between the Partially Disabled Persons Scheme (WGA), with subcategories, and the Full Invalidity Benefits Scheme (IVA), with a benefit rate equal to 70% of the (capped) social security wage;
• lower the disability threshold in the WIA from 35% to 25%;
• more room for the labor expert to find suitable jobs that fit the limitations;
• making the inflow of high-earners more difficult by capping the wages used as the basis for calculating disability rates;
• public insurance for the self-employed that gives them a benefit entitlement equal to the social minimum after the waiting period;
• make reintegration services more accessible and provide more intensive guidance to work.

Work comes first

This variant focuses more on what people can do, rather than on what they cannot do. People do not reintegrate on the basis of an occupational disability benefits system, but the other way around: reintegration comes first; if it does not work, then benefits are paid.

After the 104-week waiting period, disabled people receive reintegration benefits for 3 to 5 years. This is the same amount over the entire period and relatively high. Working pays off for them, because income from work may be kept in part. Reintegration is supervised more intensively and effectively during this period. Only if reintegration fails do a disability assessment and benefits follow. Access to these benefits is strict: only for those completely disabled, or people who do work but have a structural loss of income. The amount of these benefits depends on the disability percentage. For the self-employed, the amount is equal to the social minimum.

Basis for working people

In this variant, all working people are treated the same; employee or self-employed. In case of incapacity for work, they can fall back on one basic insurance for illness and disability, for which a fixed premium has to be paid. The amount of the basic benefits is at the level of the social minimum, regardless of the degree of disability. The benefits will therefore be lower for many occupationally disabled persons than under the current system, which should motivate them to use their opportunities to work sooner.

Employees are subject to compulsory supplementary insurance, which is not available to the self-employed. However, the self-employed can insure this risk on the private insurance market. The supplementary insurance pays benefits depending on the occupational disability percentage. The premium for this supplementary insurance is differentiated, similar to the current system.

This variant further implements other suggestions from the "current system but better" variant, as well as a focus on reintegration through the Regional Reintegration Service Point (RRL).

Not entirely enthusiastic

The OCTAS-report has not been received with only enthusiasm. Both employee and employer representatives see disadvantages. Unions consider workers to be underprotected, especially in the "work comes first" and "basis for working people" variants. They are critical of the more limited role of disability assessment and lower benefits – especially for the most vulnerable individuals. Employers' associations, on the other hand, feel that the costs of the system variants is (still) being placed too much on employers – especially SMEs. They hoped, for example, for a reduction in the 104-week waiting period. The systems will also be more expensive – an estimate is difficult, but up to a maximum of €2bn, according to OCTAS – which costs will be (mostly) recovered from employers.

How to move forward?

Minister Van Gennip has announced that she will assess the report and its variants for the occupational disability benefits system. The outcome of this assessment and of the three variants – and their budgetary effects – should be ready in the fall of 2024. This is relatively quickly for such a task, but it is still some time away given the current problems with the system. We will, of course, keep you informed.

Questions about OCTAS or the occupational disability benefits system? If so, please contact our Employment Law Department.

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