Netherlands Update - September 2017

by Alexander Beard, on Sep 27, 2017 7:07:01 AM


On September 19th 2017, the Dutch Government has published its spending plans for 2018. However this year the situation is different than normal for several reasons.

First of all there is still no new government in place. After the elections from March this year several attempts have been made to form a new coalition, but so far without result. New negations between four parties however seem to be going well at the moment and a new government is expected to take office within the next few weeks.

Bound by the convention that the current government should refrain from making substantial policy decisions while its successor is being formed, no surprises are presented for the spending plans.

The second reason why this years’ spending plans are different is that for the first time in yours the government was able to announce a positive message, with a €2.9bn budget surplus in 2017, predicted to soar past €10bn by 2021.

More money is promised for healthcare, defence and tackling the challenges of climate change, but the details of these will have to wait until the new government takes office.

Effects on Health Care in 2018
Mandatory deductible (own risk)
In 2019 the mandatory deductible will most probably not increase. This means that the insured has to pay the first € 385 of medical expenses such as specialist care and medicines, himself. The mandatory deductible does not apply to obstetric and maternity care and costs that are made at the general practitioner.

Initially in the spending plan’s, it was stated that the mandatory deductible is increased to € 400 per year, however the forming parties of the expected government have declared that they do not wish to increase this amount. This however might affect the annual premium that is paid to the insurance companies.

It is expected that the premium level for the basic coverage will increase from € 1.290 to € 1.362 per year.

However on the 26th of September DSW announced the opposite. Their premium for the basic coverage will be € 6 per year lower, and they also announced that they are going to lower the mandatory deductible to € 375. This is the first time ever an insurance company offers a lower own risk than required by law. This can only be done in very special circumstances. DSW claims that the government has calculated the total health care costs too high, and believe that a lower own risk is possible. It will be very interesting to see how other providers respond!

Income-dependent Zvw-contribution
The employer premium will increase in 2018 with 0.25% to 6.9%. This amount is calculated on the maximum wage for contribution purposes.

Basic package coverage
No large adjustments are announced on the coverage of the basic package.

Healthcare allowance
To reduce this cost for residents with limited financial means, the Dutch government pays out a healthcare allowance. This allowance is paid out to citizens older than 18 years and with an income lower than € 27.012 a year. The maximum healthcare allowance will be raised to € 131 per year.

Corporate pension age
The retirement age for occupational pension schemes will be increased from January 1, 2018 from 67 to 68 years. The increase to the pension age has consequences for the maximum allowed accrual rates in DC plans. These will be lowered from 4% to 6%.

The accrual rate in average pay schemes remains 1.875% per year for old age pension. The new pension benefits will be paid later (68 instead of 67 years).

This legislation change could affect your company’s pension plan. If the current scheme exceed the fiscal maximum allowed percentages after 01-01-2018, the plan needs to be adjusted.

State Benefit pension (AOW) age
In 2018 the state retirement age is 66 years and will increase according to a fixed schedule to 67 year and 3 months in 2022. This means that a difference remains between the two pension ages, which can be confusing for those employee's eligible for both state pension and a pension benefit from their employer.

Bram Bogaard
Managing Director: Europe - AB International Benefits B.V.

Topics:Alexander BeardHealthcarePensions