Social Security Law

Many Western countries provide a basic governmental Old Age and Next of Kin Pension for inhabitants. The amount of the individual claim is often directly linked to the total previous financial contributions to the State of each inhabitant.

The coverage is often solely based on being an inhabitant and not related to nationality or existence of an employment contract.

In a number of Western countries there is a basic governmental Disability Pension coverage for employees only.

As expat the first step is to check if participation to mentioned coverages is mandatory.
If not, then to check if it might be interesting to participate in a voluntary manner.

This requires to compare these coverages with alternatives through employment or private coverage. This comparison has to be made each time again as each individual situation might be different. In general it is good to know that often voluntary State coverage might not be that attractive due to the cost level and as future governmental claims might decrease.

When checking voluntary coverage be aware that often it can only be chosen within a certain amount of time. Of course it is also advisable to see if your employer might be willing to pay the premiums.

Many Western countries have such treaties with one or more other countries.

It improves social security protection for people who work or have worked in both countries. It often helps many people who, without the agreement, would not be eligible for monthly retirement, disability or survivors benefits under the social security system of one or both countries.

Often it also helps people who would otherwise have to pay social security premiums or taxes to both countries on the same earnings.

The EU provides rules to protect your social security rights when moving within Europe. These rules do not replace national systems. All members each decide who is to be insured under their national legislation, which benefits are granted and under what conditions.

These EU rules apply to nationals of the EU and nationals of non-EU countries who legally reside in the EU and who have moved between these countries.

Main Principles

1] You are covered by the legislation of one country at a time so you only pay contributions in one country. The decision on which country's legislation applies to you will be made by the social security institutions. You cannot choose.

2] You have the same rights and obligations as the nationals of the country where you are covered: The principle of equal treatment.

3] When you claim a benefit, your previous periods of insurance, work or residence in other countries are taken into account if necessary.

4] If you are entitled to a cash benefit from one country, you may generally receive it even if you are living in a different country: The principle of exportability.

EU Coverage

EU guidelines figure out your social security situation when you’re employed within the EU. The following rules decide by which country you will be covered:

1] If you spend at least 25% of your working time in your country of residence, you will be covered by the legislation of that country.

2] If you work less than 25% in your country of residence and you have just one employer, you are covered by the country of domicile of your employer.

3] If you do not work in your State of residence for at least 25%, you have several employers and all employers are domiciled in the same State, then you are covered by the country of domicile of your employers.

4] Do you have two employers that are registered in different countries and you work less than 25% in your country of residence? Is one of the two employers based in your country of residence? In this case, you are covered by the country of domicile of the employer which is not based in your country of residence.

5] Do you work less than 25% in your country of residence, you work for more than one employer and the employers are not all based in the same country? In that case, you will be covered by your country of residence.

6] Are you working within the Netherlands or abroad based on a Secondment Agreement of no more than 2 years? Then you can stay covered by the social security system of your home country if conditions are met. In most cases, this term may be extended to a maximum of 5 years in total.

Holland has many social security treaties for situations in which a Dutch employee works outside of the EU. Each specific treaty stipulates in which country the employee will be insured.

If there is no treaty applicable, the Netherlands will apply Dutch unilateral rules to determine the social security contribution and coverage of a Dutch employee who is working outside of the EU.

EU

If you are resident of an EU State and working in one or more EU States, it is possible to get certainty about your social security situation beforehand by applying for a so-called ‘A1 Form’ at the social security authorities of the State whose social security system covers you.

If the authorities grant you a ‘A1 Certificate’, it proves that you are covered by their social security legislation. Any other EU State you may be working or living in has to accept this.

The A1 certificate is valid for maximum five years and it is only applicable among EU-Member States, EER countries and Switzerland.

Non EU

If you are moving from a non EU country a certificate of coverage can also be requested. It gives you the same protection as an A1 certificate.

In the Netherlands there are two kinds of governmental social security coverages:

General National Insurances

All residents of the Netherlands are i.e. automatically insured by:

• General Old Age Pensions Act (AOW)
• Surviving Dependents Act (ANW)
• Long-term Care Act (WLZ)

The premiums are withheld from and paid out of your salary, if you are a resident of the Netherlands.

If so desired and if the conditions are met, it is possible to acquire additional claims regarding the past or to voluntarily prolong the ending mandatory coverage. Please be aware of the applicable time limits.

These coverages are implemented by www.svb.nl

Employment Contract Related Mandatory Insurances

• Unemployment Act (WW)
• Disability Insurance Act (WAO)
• Work and Income Act (WIA)
• Sickness Benefits Act (ZW)

The premiums are paid by the employer.

If so desired and if the conditions are met, it is possible to voluntarily prolong the ending mandatory coverages. Please be aware of the applicable time limits.

These coverages are implemented by www.uwv.nl

Each resident in Holland is by law obliged to pay for and receive basic health insurance. Furthermore a mandatory contribution to the health insurance system (Zorgverzekeringswet or Zvw) is also included.

The amount and payment of this contribution depends on your status. If you have an employee contract, your employer withholds the Zvw contribution from your wages. If you are an entrepreneur, you pay your own contributions through the annual income tax return.