Disability benefits (WGA-gap/WIA-excess)

The importance of the WGA-gap-benefit

In 2004 the government introduced a financial incentive for employees in the social security benefit on disability (WIA/WGA). The incentive will motivate partially disabled employees to return back to work earlier. When an employee is not able to earn more than 50% of the remaining earning capacity, the social security benefit (WGA) will fall down to 70% of the minumum wage. 

In real life it is hard for partially disabled people to find a job in which they can earn enough to avoid the fall down in their WGA-benefit. As of 2016 the government also limited the period of wage related benefits to a maximum of 24 months. The fall back in social security benefits steps in even sooner for young workers.

Being a good employer will mean in this case that not only the pension scheme is important. An additional disability benefit on top of social security might even be more important. 

Please note that the premium costs for a WGA-gap-insurance (top up to 70% of EUR 58.300) is in most cases not higher than 0,25% of the salary sum. Bastinck & van Doesum is happy to advise you further and can provide you with a premium quote.

WIA-excess-insurance

For employees with higher salaries it is good to know that social security benefits are capped on EUR 58.300,-. To cover the salary part above EUR 58.300 in case of disability, the employer can offer a WIA-excess-insurance.

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Example calculation on WGA-gap

In this example we present an employee, age 37, and an annual salary of € 40.000. 

This employee is 50% disabled, has no additional income and a working history of 12 years.

After 36 months of sickness/disability this employee will end up in a situation depending on savings, partner income, or social welfare.

The extended WGA-gap-insurance will provide a top-up on social benefits up to 70% of the salary. 

In many cases the employer and the employees split the costs of this benefit.

Please contact our specialists when you have questions on this subject.