The 6 billion euros that the upcoming coalition of D66, VVD and CDA wants to save on social security is immense. This is painful for the unemployed and disabled. But it is also necessary, CDA leader Henri Bontenbal said at the presentation of the coalition agreement, to keep the social safety net “available in the future”.
How necessary are these cuts for the unemployed, the disabled and the retirement age? Is there an idea behind it, or are they mainly flat cuts? The three largest interventions at a glance.
1Unemployed
The maximum duration of the unemployment benefit (WW) could be shorter than the current two years, an expert committee wrote in 2020 in an advice on the labor market. And that is exactly what the new cabinet plans to do. The unemployment benefit must last a maximum of one year.
However, the government plan is not in line with the advice of this ‘Borstlap committee’, led by former top civil servant Hans Borstlap. Because the committee proposed to first prevent people from having to remain on unemployment benefits for a long time. The government had to set up a system that encourages employees to always keep their knowledge and skills up to date, so that they can quickly find new work after losing a job. Unemployed people also had to be guided much more intensively towards a new job.
These recommendations have hardly been followed, says labor market professor Ton Wilthagen (Tilburg University). “This means that people who have been working in the same job for a long time may have outdated skills. They cannot always find a new job within one year.” He is thinking mainly of people who are not keeping up with digitalization and the “increasingly higher demands” on the labor market. They will soon be able to return to social assistance level after just one year. “That’s no nonsense.”
The upcoming coalition parties like to say that they want to make the unemployment benefit “more active”, but for Wilthagen it is clear: “They just want to make cuts.” The measure should generate 1.3 billion euros per year.
That fits in with a trend. Benefits for the unemployed and disabled have become increasingly “sparse and more selective” in recent decades, says Cok Vrooman, emeritus professor of social security and participation (Utrecht University).
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In 2002, unemployment benefit lasted a maximum of seven years. Since then it has been shortened several times. Ministers repeatedly said that they did this to make the unemployment benefit “more active”. But the parliamentary proceedings showed that the “austerity motive” was more important to them, discovered lawyer Madhvi Ramparichan, who received his PhD on this subject five years ago.
2Disabled people
People who are declared completely and permanently incapacitated for work now receive a slightly higher WIA benefit than others: 75 percent of their old salary instead of 70 percent. The government wants to abolish this broader WIA regime, which should ultimately save 1 billion euros per year.
It is also a response to the long waiting lists at the UWV benefits agency, due to a shortage of insurance doctors who can carry out the examinations. These waiting lists are made worse, experts say, because it is so time-consuming and complicated to assess and substantiate whether someone who cannot work now will no longer be able to do so in the future. If doctors no longer had to make predictions about this, it would make a big difference.
A third reason: the WIA scheme is now very complicated because it consists of all kinds of different benefit regimes. This must be simpler, said another committee that two years ago made recommendations about a renewal of disability schemes.
But here too, the upcoming coalition only picks one item from a broader list of recommendations. Because the expert committee also wanted to simplify the WIA by scrapping the most austere benefit regime – that plan would actually cost money, half a billion euros per year.
This concerns the low ‘follow-up benefit’ that partially disabled people eventually end up in if they earn much less than the UWV expects of them. This benefit is often far below the subsistence minimum.
The coalition agreement states that it wants to take the “human dimension” into account in the WIA, but according to Professor Vrooman, the interpretation of this remains “richly vague”.
3Work longer
For decades, 65 was the self-evident state pension age. But in 2012, in the middle of an economic crisis, VVD, CDA, D66, GroenLinks and ChristenUnie agreed in the so-called Spring Agreement to increase the state pension age ‘one-on-one’ with life expectancy: living one year longer means working one year longer.
In 2019, politicians in The Hague weakened this measure. In the pension agreement, the Rutte III cabinet agreed with trade unions and employers to increase the state pension age more slowly: for every year that life expectancy increases, the state pension age would increase by eight months. The one-on-one increase was very “hysterical,” said then Prime Minister Mark Rutte.
This commitment persuaded unions to support the major reform of the pension system. Now that the controversial system reform has almost been completed, D66, VVD and CDA are returning to the AOW agreement that they themselves made as government parties in Rutte III.
Increasing inequality is lurking, professor Vrooman expects. Highly educated people sometimes want to continue working after their state pension age. While among people in practical and heavy professions, “a growing group will not reach retirement age in this way.”
What Vrooman is especially missing in the plans regarding the unemployed, the disabled and the retirement age is a vision. A perspective on what social security should look like in 2050. Not only focused on affordability and feasibility, as is now the case, but also on the “quality of society, social cohesion and inequality”. “Now the political discussion remains quite limited.”
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