Disabled employees can apply to the UWV for benefits under the Work and Income according to Capacity for Work Act (WIA) after two years of illness. It is often clear early on that an employee will never be able to work again. In these cases, an employee can apply for early WIA benefit (called IVA benefit). Granting this benefit also has consequences for the employer who employs the employee in question. In this blog, Lonneke Nouwen and Bas Blaauwhof discuss some points of interest and practical tips for employers regarding early IVA benefits.
Benefit under the WIA
An employee is entitled to WIA benefits only if the person is unable to work or work less than before due to illness. An additional requirement also applies, which is that the employee can no longer earn his or her former wages due to the illness. An entitlement to WIA benefit normally arises only after the full waiting period of at least 104 weeks of disability.
WGA and IVA
The WIA has two benefits: the WGA and the IVA. The WGA benefit is intended for employees who are back at work, but due to partial occupational disability can earn a maximum of 65% of their former wages. The IVA benefit is intended for employees who are completely and permanently disabled. This means that they can earn 20% or less of their pre-disability wages and that there is little or no chance of recovery.
Employees who are completely and permanently disabled may be more likely to be entitled to IVA benefits. This is because in those cases it is unnecessary for both the employer and the employee to make efforts to reintegrate, while the chances of recovery are very small. They do not have to sit out the full waiting period of 104 weeks and may apply for the benefit after only three weeks of disability. Subsequently, entitlement to IVA benefit does not arise until ten weeks after the application is submitted at the earliest.
Wage payment obligation with early IVA benefits
If an employee receives IVA benefits, the employer still has a legal obligation to continue paying wages. The employer must continue to pay the employee's wages for 104 weeks, in accordance with the law, collective bargaining agreement or individual agreements made. However, the employer may deduct the benefit from the amount he would normally have to pay the disabled employee. This also applies to the vacation allowance. The UWV pays 8% vacation allowance on the gross benefit the employee receives. The employer is obliged to pay the vacation allowance on the remaining amount.
Notice prohibition and compensation of severance pay for early IVA benefits
Despite the employee's entitlement to early IVA benefits, during the 104-week period, the ban on notice for illness applies. Thus, the employer may not terminate the employment contract during this period.
If the employment contract is nevertheless terminated earlier, for example by concluding a settlement agreement, the employer cannot claim the UWV's scheme to compensate for the transition fee. In that case, the employer must bear the transition compensation in full himself. The amount of the transition compensation is calculated on the basis of the gross salary the employee was entitled to before becoming ill.
Accrual of vacation hours with early IVA benefit
The employee who is (partially) disabled still accrues vacation hours with his employer. The number of statutory vacation days, must remain guaranteed. Employers may therefore not stop accruing vacation hours. However, the individual employment contract or the collective bargaining agreement may contain deviating agreements regarding the accrual of vacation hours in excess of the statutory entitlement during occupational disability.
Practical tips on early IVA benefits
- Advise your fully and permanently disabled employee to apply for benefits under the WIA in good time . This will prevent hopeless reintegration efforts and the UWV will catch (part of) the costs of the mandatory continuation of salary payments.
- Keep in mind the ban on notice due to illness. You may not terminate your employee's employment during the first 104 weeks of disability. If you do so anyway, the transition fee will not be compensated by the UWV.
- Make arrangements for vacation accrual during (long-term) disability.
Need help determining whether your employee is entitled to early IVA benefits? Call one of our attorneys employment law or contact us using the form below.
