The mandatory disability insurance (AOV) explained

A mandatory disability insurance (AOV) for entrepreneurs. A hotly debated topic in the Netherlands. What is the current status of the political negotiations? Will you have to take out AOV, and when? This article gives you the latest update on the mandatory AOV for entrepreneurs.

After years of negotiation, politicians and employer and employee organisations have reached a pension agreement. Part of this agreement is a mandatory disability insurance (AOV) for entrepreneurs. The introduction of this law has been postponed several times for several reasons. It is now expected to enter into force in 2027.

Occupational disability insurance

How do you make sure you have enough money to live on when you are sick? You might be able to cover a short period of illness with savings. But if you fall ill for a long time, it can be difficult to manage. Currently, there are  several ways to cover occupational disability. One way is through an AOV, with which you insure yourself for a certain monthly amount to cover your cost of living while you are sick. An AOV for entrepreneurs is not mandatory at the moment. Most entrepreneurs do not have disability insurance.

Advantages of the AOV

With a mandatory AOV for entrepreneurs, all working people in the Netherlands are protected against the consequences of occupational disability. This ensures fewer risks and lower costs for society. In addition, it gives entrepreneurs more financial security in the event that they are unable to work. Insurers will also no longer be able to exclude entrepreneurs. For example, entrepreneurs with a high-risk profession.

Disadvantages of the AOV

Not all organisations are happy with mandatory disability insurance. Some expect the premium, the amount you pay monthly, to be too high. This would make things financially tight for entrepreneurs. Others have the opinion that entrepreneurs themselves are responsible for finding a solution to reduce risks. Entrepreneurs know best what suits their situation.

The mandatory AOV in practice

It is not yet clear what the mandatory AOV will look like for you. The laws and rules are currently being worked out based on an advisory report (in Dutch). It is not known whether all recommendations will be adopted in the new law.

Still some time to go

The exact rules and when the mandatory AOV will come into force are not yet known. In the meantime, something may happen to you that prevents you from working. So it is important to have a plan in place for your finances, in case you become incapacitated for work.