Some important and urgent developments in the area of Social Security and disability benefits are:
- By 2023, it will cost society 22.7 billion euros to provide benefits to the unemployed, young parents on leave and people who can no longer work (fully) due to illness or disease. For 2022, that amount is estimated at 20.9 billion euros.
- In total, the burden of benefits for which the UWV is responsible will rise by 1.8 billion euros in 2023. This is a lot compared to the 93 million euro increase in 2022. Most of the increase in 2023 (over one billion euros) will come from disability benefits. The number of people becoming disabled is increasing rapidly, and the UWV is unable to stop this trend.
- The forecast for 2022 is for 57,200 new WIA benefits. By comparison, inflows into the Work and Income according to Labour Capacity Act (WIA) were unexpectedly high for the first time in 2016 at 40,000 new benefits. An explanation for this sharp increase is still under investigation by the UWV.
- Research on 2021 shows that the increase in WIA inflows in that year will come mainly from the Sickness Insurance Act. This is the group of benefit recipients not covered by the wage continuation obligation. WIA enrollment increases by 13% in 2021.
Understaffing at UWV major cause of increase in WIA inflow
A major cause of the increase in WIA inflows is understaffing at the UWV.
The UWV has insufficient staff (including medical examiners) to complete all applications for socio-medical assessments on time. In cases where the processing time for a WIA claim assessment is too long, the UWV leaves an advance payment for the WGA. Because fewer physical consultation hours went ahead due to corona restrictions and the UWV was unable to make up for them due to rising demand for assessments and insufficient capacity, the number of people waiting for assessments continued to rise and the number of WGA advances increased.
By the end of 2021, as many as 12,000 people were waiting for the UWV to assess their eligibility for disability benefits. In addition, tens of thousands more were waiting for their medical conditions to be reassessed. This is according to the UWV’s annual report. Legally, this review should take place within eight weeks. At the end of last year, the average waiting time was already 17 weeks, and it continues to increase.
Impact on employers
Rising Social Security costs and backlogs at the UWV is bad news for employers. Indeed, under legislation, they will be presented with the bill for this. This includes not only the cost of mandatory sick pay, but also rising premiums paid by employers to finance Sickness and Disability Insurance Act and WGA benefits. Besides the negative financial impact for both employee and employer, this situation also has negative consequences for the reintegration activities and grip you have on them as an employer. This while continuing to actively pursue employment opportunities and stay connected to the labor market is of utmost importance to both employee and employer.
Costs can be influenced
The good news is, the cost paid by the employer and the direction you can take as an employer can largely be influenced. Not only by getting a better grip on absenteeism, through prevention or interventions, for example, but also by making the right choice in terms of risk financing. The sharply rising costs and backlogs at the UWV may require a different approach when it comes to funding the risks around Human Capital. Consider choices for funding WGA and sickness benefits. A vision and deliberate approach is necessary to stay in control of costs, services and deployment of reintegration activities. One solution may be to become self-insurer for the Sickness Benefits Act and/or WGA that gives you more control over this risk. To make the right choice later, we recommend that you start considering the right approach for your organization now.
Consulting opportunities Kröller Boom
Kröller Boom can identify for you what the costs for your organization are at present and how they are likely to develop in the coming year. We clarify where more focus is needed and what you can influence.
We offer this quick scan free of charge and without obligation, and it not only includes an overview of current and future costs. You will also receive advice on possible actions to take. To take advantage of this, send the Tax Office’s Work Resumption Fund Decision (Whk Decision) to corporatewellness@krollerboom.nl. You will then receive a report and possibly a plan of action for a follow-up examination.
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