Direct Request (CEACR) - adopted 2002, published 91st ILC session (2003)

Invalidity, Old-Age and Survivors' Benefits Convention, 1967 (No. 128) - Netherlands (Ratification: 1969)

With reference to its previous comments, the Committee notes the information supplied by the Government in its report on the Convention for the period from 1 June 1996 to 1 July 2001, as well as in its annual reports on the application of the European Code of Social Security (ECSS). In reply to the questions raised in the Committee’s direct request of 1996, the Government supplies in the annex to the report the answers it has provided under the ECSS in 1998 on the same questions which the Committee has already noted in its subsequent conclusions under the ECSS. The Committee has also carefully studied the legislation and supplementary information provided by the Government together with its reports on Conventions Nos. 128 and 102, including the brochures "A short survey of social security in the Netherlands, January 2001", "The Dutch disablement benefits system", the report prepared for Parliament "Efforts to reintegrate the unemployed: An overview", etc. It has taken note of the statistics on the indexation of benefits supplied by the Government under Article 29 of the Convention. It would like to receive additional information on the following points.

Part II (Invalidity benefit) of the Convention. (a) Article 8. In its previous comments, the Committee asked the Government to provide information as to the practical application of the new definition of the contingency contained in section 18 of the Disablement Benefits Act (WAO), which takes into account the remaining labour skills and the capacities of the persons concerned. The Committee notes that the rules to determine the residual capacity and aptitude of the disabled person were laid down in the "evaluation" decree supplied by the Government. It further notes that the level of the disability benefits provided under the General Disability Pensions Act (AAW) and under the WAO depends on the degree of incapacity and that, according to the enclosed brochure "A short survey of social security in the Netherlands, January 2001", under the WAO, seven classes of incapacity are established. In view of the technical nature of these provisions, the Committee would like the Government to specify how the degree of incapacity is taken into consideration and what degree of incapacity has been prescribed for the contingency of "incapacity to engage in any gainful activity", as defined in Article 8 of the Convention.

(b) Articles 10 and 11 (in conjunction with Part V (Standards to be complied with by periodical payments)). In its previous comments, the Committee asked the Government to provide the statistical information on the level of the initial and continuing permanent disability benefit under the WAO. The Committee notes, however, that the calculations given in the Government’s report do not indicate to which benefit they refer - the initial benefit paid during the first stage, which is limited in duration up to six years, or the continuing benefit paid during the second stage, which can last until the retirement age. These calculations simply assume that the benefit amounts to 70 per cent of the reference wages without specifying the degree of incapacity, the age of the beneficiary at the onset of the contingency (workers under 33 years at the onset of the contingency are not entitled to the initial benefit paid during the first stage) and the qualifying period completed. The Government also refers to the additional information contained in the enclosed brochure "A short survey of social security in the Netherlands, January 2001". The Committee notes from this brochure that, the level of the benefit depends on the degree of incapacity and the age of the beneficiary and that for incapacity of 80 per cent or more, the amount of the initial benefit will constitute 70 per cent of 100/108 of the daily wage, and not of the full reference wage. As what concerns the continuing benefit paid during the second stage, its monthly amount is calculated on the basis of the minimum wage augmented by 8 per cent of the holiday allowance and divided by 21.75, plus an additional amount of 2 per cent of the difference between the beneficiary’s last wage and the minimum wage multiplied by the number of years between the age of 15 and the age of the beneficiary at the onset of the contingency. The percentage of the final benefit granted depends on the actual degree of incapacity. The Committee would be grateful if the Government would take these rules into account in calculating the level both of the initial and continuing disability benefits paid to a standard beneficiary who has completed a qualifying period of 15 years of contribution or employment between the age of 15 and the age at the onset of the contingency and whose last wage was equal to the reference wage determined in accordance with Article 26 or 27 of the Convention, as appropriate. The Government is also asked to refer to the comments under Part V below.

(c) With regard to the new provisions introduced in 1998 by the PEMBA Act in the financing of the invalidity insurance scheme for employees established by WAO, the Committee asks the Government to refer to its comments under Convention No. 102.

Part III (Old-age benefit), Articles 17 and 18 (in conjunction with Part V (Standards to be complied with by periodical payments)). The Committee notes that the level of the old-age pension is calculated in the report for the full pension provided to the beneficiary who has completed 50 years of insurance, instead of 30 years of contribution stipulated by Article 18, paragraph 1(a), of the Convention. It further notes that, according to the report, each missing year of contribution results in a 2 per cent reduction in the pension. The Committee understands therefore that, in order to correspond to a qualifying period of 30 years of contribution, the full old-age pension has to be reduced by 40 per cent. In certain cases, the resulting pension may be lower than the minimum social income in force in the Netherlands, in which case the beneficiary would be entitled to a supplement so that the old-age pension is brought up to the level envisaged by the National Assistance Act (ABW). The Committee would be grateful if the Government would indicate the conditions for the provision of this supplementary assistance to pensioners with an indication of whether the supplement is subject to a means test. The Committee hopes that the Government will also be able to provide an updated text of the ABW, with an indication of the relevant provisions.

As regards the exact amount of the benefit, the Committee notes that the amounts of the single person’s pension, couple’s pension and single parent’s pension given on page 5 of the report are lower than the amounts of the same pensions given on page 6. Moreover, both of the indicated amounts of the couple’s pension, which, according to the brochure "A short survey of social security in the Netherlands, January 2001" supplied by the Government, should be equal to 100 per cent of the minimum wage, are either lower or higher than the indicated minimum wage. In view of these inconsistencies, the Committee would ask the Government to recalculate the level of the old-age benefit for a standard beneficiary (man with wife of pensionable age) in its next report, on the basis of updated statistics for the same time frame and with the addition of a monthly amount of the holiday allowance, which is paid once a year. Please refer also to the comments made under Part V below.

Part IV (Survivors’ benefit), Article 21. With reference to its previous comments concerning the new survivors’ benefits scheme (General Surviving Relatives Act), which came into force on 1 July 1996, the Committee notes that the basic assumption of the Government is that a widow or widower should be capable of self-support in cases where there are no obstacles such as family responsibilities or incapacity for work. The category born before 1 January 1950 is considered to be a transitional category, and persons born after this date are considered to have a fair chance on the labour market and are provided with the full range of services for their reintegration into the labour market.

Article 22. According to the statistics given in the report, the number of economically active persons covered by the social security system in 1999 amounted to 7,097,000 and surpassed the total number of economically active persons in the Netherlands (6,364,000), thus increasing the scope of coverage of the survivors’ benefit to 111 per cent. The Committee observes that this data does not make sense. By comparing the data given in the report on the personal coverage of other social security branches, the Committee understands that the figure 6,364,000 refers not to the total number of economically active persons, as it is repeated in the report under Article 16 of the Convention, but to the total number of employees, as stated under Article 9. It would be grateful if the Government would confirm this understanding and provide updated calculation of the number of persons actually covered by the survivors’ benefit.

Article 23. The report states that pay, benefits and family allowance have been calculated on the same time base, i.e. January 1994. The amount of the minimum wage is then given for 1 June 1999, pay index is indicated for the period 30 June 1994-30 June 1999, and the amount of the survivors’ pension is given for the period 30 June 1992-30 June 1994. The Committee further notes that the Government was reporting for the period 1 June 1996-1 July 2001. In this situation the Committee is unable to understand for which period of time the Government calculates the level of the survivors’ benefit. It wishes to point out that such disparate data provided for different time frames inconsistent with the reporting period makes it impossible to calculate the level of the benefit properly and to ascertain whether it attains the minimum level prescribed by the Convention in the period covered by the Government’s report.

As to the statistical data used by the Government to calculate the level of the survivors’ benefit, the benefits’ amounts show a substantial decrease in comparison with the same data given by the Government in its previous report for the year 1994. Thus, the amount of the pension allocated to a widow with children has decreased from 2,419.72 guilders in 1994 to 2,261.34 guilders indicated in the present report, the amount of the family allowance has decreased from 470.40 guilders in 1994 to 390.91, and the amount of the holiday allowance paid to the widow has decreased from 158.25 guilders in 1994 to 118.76. The Committee would like the Government to explain the reasons of this decrease in benefits, if the figures given in the present report are more recent than those given for 1994. In this respect, it notes that the same amounts of the orphan’s pension and of the pension of a widow without children, which in the previous report were indicated for the year 1994, in the present report are given for 1992. As to the exactness of the data, the Committee would also like to point out that the amount of the minimum legal wage on page 5 of the report stands at 2,344.20 guilders, while on page 7 it is one guilder less. The Government might also wish to explain why the basic amount of family allowance applicable to families with two children between 6 and 11 years of age used in the calculation of the level of the invalidity benefit on page 3 of the report constitutes 1,060.10 guilders, while the same allowance in the calculation of the survivors’ benefit on page 7 amounts to only 390.91 guilders. The Committee notes in this respect that, according to the Government’s latest report on Convention No. 102, for the period 1996-2001, the amount of 1,060.10 guilders constitutes the double of the family allowance of 530.05 guilders per child per calendar quarter for families with two children between 6 and 12 years of age at the end of the specified period (unspecified, presumably 1999). As to the second amount of 390.91 guilders, the Committee recalls that this latter amount was cited in the 32nd annual report on the ECSS as the amount of family allowance payable to families with one child between 6 and 12 years of age per calendar quarter in June 1999. The Committee would be glad if in its future calculations of the level of the survivors’ benefit on the monthly basis the Government would use the monthly amount of the family allowance, instead of the quarterly amount as it has been doing previously, payable to families with two children under 6 years of age during the employment as well as during the contingency. Finally, taking into account that the survivors’ benefit include benefit of the surviving spouse, the dependent child allowance, the orphan’s benefit and the gross holiday allowance per month, the Committee would be grateful if the Government would explain in its next report the manner in which the survivors’ benefit for a standard beneficiary of this branch (a widow with two dependent children) is calculated. Please refer also to the comments made under Part V below.

Articles 25 and 33, paragraph 1. The Committee notes that, whereas Article 25 of the Convention requires survivors’ benefit to be granted throughout the contingency, under the terms of section 16, paragraph 1(c), of the General Surviving Relatives Act (ANW), survivors’ benefit comes to an end when the beneficiary reaches the age of 65 years, when he or she is entitled to an old-age pension by virtue of the General Old-Age Pensions Act (AOW). It also notes that, in accordance with section 24(2) of the ANW, the half-orphan allowance payable to a surviving spouse taking care of the child of the deceased also comes to an end when the spouse reaches the age of 65. The Committee recalls in this respect that, in accordance with Article 33(1) of the Convention, when the survivors’ benefit is substituted by the old-age benefit, the person protected shall not suffer a reduction in the amount of the benefit. The Committee would therefore like the Government to show in its next report, on the basis of comparable statistics given for the same time base, that the standard of living ensured to a widow with two children by the survivors’ benefit would not be lowered by its replacement by the old-age benefit. As regards calculation of the level of these benefits, please also refer to the comments made under Articles 17, 23 and Part V of the Convention.

Part V (Standards to be complied with by periodical payments). With reference to its previous comments, the Committee notes the calculations of the level of benefits provided by the Government in its report for June 1999, as well as in its 35th annual report on the ECSS for June 2002. It also notes the complex structure of the family allowances provided during employment and during the contingency, which depend on the age of the child, the size of the family and whether the child was born before or after 1 January 1995. In order to ascertain whether the level of the invalidity and survivors’ benefits attains, in all cases, the minimum level of benefits prescribed by the Convention for a standard beneficiary with family responsibilities (a man with wife and two children or a widow with two children), the Committee asks the Government to use in its calculations the lowest amount of the family allowance provided for a dependent child. The Committee understands from the 35th annual report on the ECSS that the lowest amount of family allowance is paid with respect of a child under 6 years of age born after 1 January 1995. It would like the Government to confirm this understanding and, if so, to use the corresponding monthly amount of this family allowance for two children in the calculation of the level of invalidity and survivors’ benefits. The Committee would also be grateful if the Government would specify whether a holiday allowance, to which it refers in the calculation of invalidity, old-age and survivors’ benefits, is also paid during employment and, if so, if its amount is different from that paid during the contingency in question. Finally, with these considerations in mind, it would like the Government to supply up-to-date statistics on the level of benefits for the period covered by its next report, provided on the same time basis as for the year 2002 and in the manner requested in the report form of the Convention, with a clear indication of whether the statistics refer to gross or net amounts.

[The Government is requested to report in detail in 2003.]