Wage cost benefits from the first of January 2018 onwards

It is the Salary Costs (Incentive Allowances) Act of the Netherlands by means of which the current social insurance contribution discounts are converted to wage cost benefits for the occupationally disabled and for older recipients of social benefits. The Act was published in the Netherlands Bulletin of Acts, Orders and Decrees in 2015. It is by Royal Decree that the various wage cost benefits (these being allowances made available to employers in recognition of their recruitment of employees from the aforementioned target groups) are put into operation.

Wage cost benefits

The wage cost benefit for an employee who is older or has an occupational disability is capped at € 6,000 annually, compared with a cap of € 2,000 per annum for the target group as per the Occupational Disability (Employment Targets and Quotas) Act. The amounts in question are converted to a fixed amount per payrolled hour. The upshot is as follows:

• wage cost benefit per older member of staff: € 3.05,
• wage cost benefit per occupationally disabled member of staff: € 3.05,
• wage cost benefit per Occupational Disability (Employment Targets and Quotas) Act-specified member of staff: € 1.01.

The wage cost benefit entitlement lapses in the event of the termination of the service contract involving an employee from one of the above categories being followed within a six-month term by a service contract being concluded afresh between the same employer and employee. The wage cost benefit-specific provisions as per the Salary Costs (Incentive Allowances) Act of the Netherlands are set to take effect on the first of January 2018. The Royal Decree that provides for the entry into force has duly been published in the Netherlands Bulletin of Acts, Orders and Decrees.

Low-income incentive

The maximum of the low-income incentive has been fixed at € 2,000 annually for those in the annual wage range from 100 to 110 percent of the statutory minimum wage, against € 1,000 annually for those in the annual wage range from 110 to 120 percent of the statutory minimum wage. The low-income incentive is awarded per payrolled hour, as follows:

• low-income incentive for average hourly wage in the € 9.66 to € 10.63 range: € 1.01 per hour,
• low-income incentive for average hourly wage in the € 10.63 to € 12.08 range: € 0.51 per hour.

Only those who work at least 24 ours hours a week qualify for the low-income incentive scheme. No minimum age requirement applies. There is an upper age limit, however, which – understandably – has been fixed at state pension age, as the age with effect from which employee insurance contributions cease to be levied for employees having gained state pension entitlement.

The low-income incentive scheme has been up and running since the first of January 2017.

Dutch version: Loonkostenvoordelen per 1 januari 2018