Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

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

With reference to its observation of 2006, the Committee notes the information supplied by the Government in its report, as well as the comments made by the Netherlands’ Trade Union Confederation (FNV).

Part II (Invalidity benefit), Article 10(a) and Article 27 of the Convention. The Committee notes that the amount of the invalidity benefit is calculated in the report under Article 27 on condition that the family of the beneficiary has no other income or social security benefits. As such a condition is not envisaged by this Article, the Government is asked to indicate whether the invalidity benefit provided under the terms of the Work and Income (Employment Capacity) Act of 10 November 2005 (WIA) to a wholly and permanently incapacitated employee (IVA benefit) is means tested and to what extent family income other than the earnings of the beneficiary is taken into account. The Committee further notes that the report gives no information on Article 11 of the Convention. The Government is asked to indicate whether IVA benefit is conditional upon a minimum period of contribution or employment, as well as on the age of the beneficiary when the contingency occurred (previously the initial WAO benefit was not available for disabled workers under 33 years of age), and to provide comparable calculation of the IVA benefit with respect to a beneficiary who has attained the age of 30 years at the time when invalidity occurred.

Part III (Old-age benefit). (a). The Committee notes that, under the National Old Age Pensions Act (AOW), all residents over 65 years of age receive an old‑age pension, which is a fixed amount paid in full after 50 years of residence in the country. The pension accrues from the age of 15 until the age of 65 each year by 2 per cent of the full amount of benefit. Each year during which the person concerned was not insured results in a 2 per cent reduction of the full amount of the pension. The replacement rate of the old-age pension is calculated in the report for the amount of the pension received by couples after 50 years of insurance, in relation to the reference wage of an ordinary adult male labourer determined under Article 27(4)(a) of the Convention. The report gives no information concerning Article 18 of the Convention. The Committee would therefore like the Government to show in its next report that the amount of the Dutch national old-age pension for a married couple composed of a man with dependent wife of pensionable age after 20 years of residence would attain the level of 45 per cent prescribed by the Convention.

(b). The Committee notes the Government’s statement that the Work and Social Assistance Act (WWB) can be taken into account when the calculation of the amount of the national old-age pension is made on the basis of Article 28 of the Convention. The WWB provides a minimum income for all persons residing legally in the Netherlands with inadequate financial resources to meet their essential living costs. Under the WWB, persons over 65 years of age with incomplete national old-age pension are entitled to a top-up benefit, which would increase their pension to the same amount as persons that receive a complete national old-age pension. Married couples are entitled to a benefit related to 100 per cent of the net statutory minimum wage. The Committee also notes that the FNV continues to be in disagreement with the point of view of the Government that the AOW in combination with WWB brings Dutch legislation fully into conformity with Convention No. 128. The FNV is of the opinion that the period of 50 years to qualify to full AOW pension is unacceptably long in comparison with the surrounding countries and given the period during which the entitlements to a complementary pension are built up. On the other hand, the WWB means test is too far-reaching: all income is subject to the means test and only a small amount of additional pension is not taken into account (17.35 euros for a single person and 34.70 for a couple in 2007). The same applies to property, apart from a small amount for savings (5,245 euros for a single person and 10,490 for a family). The FNV is of the view that the exempted amounts are far too low for pensioners who made savings for their old age.

The Committee observes that the scope of persons protected under Part III of the Convention is determined in the report in relation to Article 16(1)(c), which covers all residents, or residents whose means during the contingency do not exceed prescribed limits. Such coverage of the scheme permits to take into consideration benefits provided to all residents, as well as means-tested benefits which are provided as of right to those residents whose means exceed the substantial amounts determined under Article 28 of the Convention. The Committee would therefore invite the Government, if it considers it necessary, to include in the calculation of the level of the old-age benefit requested above any complementary social assistance benefit provided under the WWB to a married couple where both spouses are over 65 years of age and to specify the nature of the means test and the substantial amounts prescribed under Articles 16(1)(c) and 28(b) of the Convention. It recalls in this respect that, notwithstanding the length of the qualifying period laid down in the national legislation for the entitlement to a full pension, the pension at the level guaranteed by the Convention should be paid already after completion of the qualifying period of 30 years of contribution or employment, or 20 years of residence.

(c). The FNV questions whether the regulations regarding the spouse allowance paid to a pensioner for his spouse younger than 65 years of age are in conformity with the provisions of the Convention. The Committee points out that the standard beneficiary for Part III of the Convention is a “man with wife of pensionable age”, whereas the spouse allowance is paid for the wife younger than the pensionable age in the Netherlands.

Part IV (Survivors’ benefit) in conjunction with Part V (Standards to be complied with by the periodical payments). (a). The Committee notes that while ANW survivors’ benefit is a means-tested benefit which covers all residents, the calculation of its replacement level in the report is made on the basis of Article 27, which normally applies to schemes covering employees or economically active population. In establishing the scope of protection of the survivors’ benefit, the report refers to Article 22, paragraph 1(c), of the Convention, which covers residents whose means during the contingency do not exceed limits prescribed in such a manner as to comply with the requirements of Article 28 of the Convention. In this respect the report form on the Convention adopted by the Governing Body gives the following instruction under Article 23(b): “If, in implementing Article 22, recourse is had to the provisions of subparagraph (c) of paragraph 1 for defining the scope of protection, please furnish under this Article information in the form set out in Titles I and IV under Article 28 and in Title I under Article 27.” The Committee would be grateful if the Government would follow this instruction in calculating the level of the survivors’ benefit in its next report in accordance with Article 28 of the Convention. Please explain the means test applied to the survivors’ benefits with respect to the widow and the children of the deceased. With regard to the family allowances paid during employment and during the contingency, please explain whether the child tax credit is paid during the contingency in addition to a semi-orphan pension and how the semi-orphan pension varies according to the age of the child and the income situation of the eventual caretaker of the child.

(b). With respect to the widow’s benefit, the FNV considers that Article 28(b), which allows means testing of benefit only where the means of the family exceed prescribed substantial amounts, is not complied with because the income from the unemployment or invalidity benefit will be fully and not partially deducted from the survivors’ benefit, leaving no substantial amounts at the disposal of the beneficiary. In the light of these comments, please calculate the level of the survivors’ benefit paid to a widow with two children who is in receipt of the unemployment benefit paid on the basis of her previous wage equal to the reference wage determined under Article 27 of the Convention.

(c). The FNV also alleges that the fact that a widow loses her survivors’ benefit the day the youngest child turns 18 is not in accordance with the terms of the Convention. The Committee recalls that, according to Article 21(3)(b), the widow should continue to receive the benefit as long as she is caring for a dependant child of the deceased. It therefore asks the Government to indicate whether an exception is made with respect to children over 18 years of age covered by the Convention in accordance with Article 1(h)(ii).

Part V (Standards to be complied with by periodical payments). The report indicates that the ordinary adult male labourer is selected according to Article 27(4)(a) as “a person deemed typical of unskilled labour in the manufacture of machinery other than electrical machinery”; an ordinary male labourer’s wage is equal to the amount of the statutory minimum wage, which was 1,176.47 euros net per month on 30 June 2007. The FNV points out that no explanation is offered as to why the statutory minimum wage is chosen, as most ordinary adult male workers in the manufacture of machinery earn more than the minimum wage. It also states that the minimum wage was frozen in 2004 and 2005, which was not the case for the real wages of the ordinary workers in the Netherlands. In reply, the Government states that the wage of an ordinary labourer “is the same amount as the minimum wage (on average)”. The Committee recalls that, in accordance with Article 27(7), the wage of the ordinary labourer shall be determined on the basis of the rates of real wages received for normal hours of work fixed by collective agreements, by or in pursuance of national legislation, where applicable, or by custom, including cost‑of-living allowances if any. The Committee would therefore like the Government to provide statistics on the actual rates of wages for normal hours of work in manufacture of machinery other than electrical machinery.