The mandatory disability insurance (AOV) explained

The government reached a pension agreement with workers' and employers' organisations in 2022. Part of that agreement is a mandatory occupational disability insurance (AOV) for entrepreneurs. This will not come into force until 2027. Still, it is a good idea to prepare.

The law proposal on the pension agreement (in Dutch) will be ready near the end of 2024, the government expects. If the Senate and House of Representatives approve the proposal, the law will be introduced in 2027.

Key elements of the mandatory AOV

The exact rules of the mandatory AOV are not yet known. The Ministry of Social Affairs is currently drafting the law based on an advisory report by the Labour Foundation.

These are expected to be the key elements:

  • If you pay income tax on profits from your business (in Dutch), you are obliged to take out an occupational disability insurance (AOV). The obligation also applies to a spouse working for your business.
  • The annual premium is between 7.5% and 8% of your last earned income. You only pay insurance over earnings up to 143% of the legal minimum wage. Any income above that is premium-free.
  • The benefit in case you become unfit for work is 70% of your last-earned income (profit from business). The maximum benefit is 100% of the statutory minimum wage.
  • If you become unfit for work, you will have to cover the first year financially yourself. After that year, you will receive the benefit.
  • The premium is tax deductible.

Prepared for loss of income

The exact rules and the moment at which the mandatory AOV will come into effect are not yet known. In the meantime, something may happen to you that prevents you from working. So think about how you can arrange your finances if you become unfit for work.

AOV for entrepreneurs

With an AOV, entrepreneurs insure themselves against loss of income due to illness or disability. This is currently not mandatory. Many self-employed people do not have an AOV (in Dutch). They usually choose to reduce the financial risk in case of incapacity for work.

All working citizens protected

A mandatory disability insurance for self-employed professionals will soon ensure that all working people in the Netherlands are protected against the consequences of occupational disability. According to the government, mandatory disability insurance reduces costs and risks for society.