The Dutch coalition government plans to accelerate the rise in the state pension age AOW (algemene ouderdomswet). The employee insurance agency UWV (uitvoeringsinstituut werknemersverzekeringen) expects this move to increase the number of people aged over 60 receiving occupational incapacity benefits. A spokesperson for the agency confirmed this trend following reports in De Telegraaf and Trouw.
What changes?
Under current rules, the pension age increases by eight months for every additional year of life expectancy. This “eight-to-twelve” ratio allows for some extra time in retirement as life expectancy grows. However, the D66, CDA, and VVD parties want to move to a “one-to-one” link starting from 2033. This means that every year of increased life expectancy would result in a full year’s increase in the retirement age, pushing it towards 70 more quickly.
The UWV anticipates a higher influx of claimants into the work and income according to labour capacity scheme WIAÂ (wet werk en inkomen naar arbeidsvermogen). This benefit specifically covers those who are unable to work due to long-term illness or injury. Data suggests that for every three-month increase in the pension age, several hundred more people are likely to stop working due to health issues.
A spokesperson for the agency noted that there has already been a rise in incapacity applications among those over 60. They explained that raising the retirement age increases health risks for older employees, as they are exposed to the physical or mental demands of work for a longer period.
UWV concerns
According to UWV figures, the number of people over 60 entering the incapacity system grows by an average of 0.2 per cent for every month added to the pension age. While this would lead to higher spending on these benefits, the government would save money overall because it would pay out less in state pensions. These savings are estimated to reach nearly 2.8 billion euros by 2060.
The public will not see the first effects of these changes for some time. Authorities have already fixed the state pension age until 2031, and future increases depend on how life expectancy evolves in the coming decades.
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