Mandatory disability insurance for self-employed: developments delayed

The introduction of compulsory disability insurance (AOV) for self-employed workers will be postponed for the time being. Minister Eddy van Hijum (SZW) has announced that the bill will be adjusted after critical reactions from the market and implementing organizations such as the UWV and the Tax Office.

Basic Disability Insurance Act for the Self-employed (Baz)
The purpose of the Law on Basic Disability Insurance for the Self-Employed (Baz) is to protect self-employed entrepreneurs from the financial consequences of disability. The plans surrounding this law have generated much discussion in recent years.

Plans in Brief
The original proposal was based on the following principles:

• Mandatory insurance: All self-employed persons with profits from business must insure themselves against disability, unless they already have a private AOV.
• Affordability: A premium of 6.5% of business profits, with a maximum of €195 per month (minimum wage 2024), which would be tax deductible.
• Minimum benefit: In case of disability, a benefit of 70% of taxable earnings, capped at the minimum wage. Self-employed people with higher incomes can optionally purchase additional insurance.
• Waiting period: A waiting

Why adjustments are needed
During an Internet consultation, market parties expressed concerns about the feasibility and the impact on self-employed workers. The UWV and the Tax Administration also indicated that certain parts are difficult to implement. To ensure that the bill receives broad support and is practicable, it will be modified. The updated proposal is not expected before the summer of 2025.