Also Entitled to No-Risk Policy, if the Entitlement to a Sickness Benefit has not been “Consumed”

Year of publication


Year of publication



Court of Appeal Arnhem-Leeuwarden, 27 August 2019, ECLI:NL:GHARL:2019:7008


The WGA (Partial Work Incapacity) benefit of a former employee should not have been included when calculating the amount of the differentiated premium for an employer’s Work Resumption Fund, because the employee had been entitled to a benefit under the Sickness Benefit Act prior to the WGA benefit. Therefore the so-called "no-risk policy" applied. The fact that this entitlement to the sickness benefit had never been applied for and the fact that, for that reason, the UWV had never established the entitlement did not preclude it.

In 2004, an employer employed an employee who was entitled to a WAO (Labour Incapacity) benefit immediately preceding commencement of the employment. This benefit was not terminated until in 2006. Due to this WAO benefit, the employee continued to have the status of a labour incapacitated employee until 2011. As a result, the so-called "no-risk policy" applied. This implies that the employee is entitled to a sickness benefit in case of absenteeism due to illness. The employer is allowed to deduct this benefit from the wages to be paid during illness, so that the wages do not impose a burden on the employer.
If the employee is entitled to this sickness benefit, also the subsequent WGA benefit will not have to be borne by the employer. In that case, the WGA benefit is not included when calculating the differentiated premium for the Work Resumption Fund the employer has to pay to the tax authorities. And, if the employer is a self-insurer, he does not have to pay this WGA benefit.

In 2009 the employee became labour incapacitated. The employer failed to report the employee’s illness to the UWV, however, probably because he was not aware of the entitlement to a sickness benefit. Since the employee was still incapacitated in 2011, he was granted a WGA benefit then. When calculating the differentiated premium for the Work Resumption Fund, the former employee’s WGA benefit was included, so that an increased premium was set. When the employer found out that the premium had been set at a higher level, whereas it should not have been, the employer submitted requests to the tax authorities to revise the premium decisions over the years 2014-2016.
The tax authorities rejected this request, however, because the UWV stated that the entitlement to sickness benefit had not been "consumed". Since the no-risk policy had not been invoked, the WGA benefit should be allocated to the employer. The UWV added that the benefit would not have been allocated to the employer if the benefit under the Sickness Benefit Act had been applied for, since the employee was a labour incapacitated employee. In the absence of objections to the premium decisions over the years 2014-2016 at an earlier date, the employer could not contest this stand of the tax authorities. But when the premium decision for 2017 was made, the employer did object. When this objection was declared unfounded, the employer could refer the case to the Court. The Court found for the employer, but the tax authorities appealed to the Court of Appeal.

The Court of Appeal confirmed the Court's decision. The text of the law makes clear that a WGA benefit should not be included when calculating the amount of the differentiated premium for the employer’s Work Resumption Fund if, preceding the WGA benefit, there was entitlement to a sickness benefit. The Court considers this text unambiguous: payment of the benefit is not required. According to the Court of Appeal, it is irrelevant that the tax authorities should take the UWV's stand on the existence of the entitlement to benefits and that the UWV did not establish this right because no application or sick report had been made. It is up to the tax authorities to ensure that the UWV will still take a stand on the existence of the entitlement to a sickness benefit.
The fact that the employer can no longer apply for the sickness benefit because the period for reporting ill or for the application has expired only means, according to the Court of Appeal, that the entitlement to a sickness benefit cannot be effected any more, it does not also mean that the entitlement cannot be established. The application or notification is not a condition for the existence of the entitlement to a benefit; it is a condition for effecting the right to a benefit. If, as a result of the lapse of time, it is not possible any more for the UWV to determine whether the entitlement to a sickness benefit did exist, then the risk will have to be borne by the employer who failed to timely submit the sickness benefit application.


The fact that the Court of Appeal confirms the earlier ruling by the Court will satisfy employers' sense of justice. Claiming the no-risk policy or not claiming it may save the employer two years of sickness benefit and ten years of WGA benefit payment. How important this may be here for the employer will depend on the amount of the wage, but it is not uncommon if the amount involved is somewhere between € 200,000 and € 300,000.
This ruling is of major importance, because it quite often happens that, due to a lack of familiarity with the existence of the entitlement to the sickness benefit, employers do not invoke the no-risk policy. UWV research in 2018 shows that employers only invoked it for 60% of the employees with a Wajong benefit, for 50% of employees with a WGA benefit, for not more than 17% of employees with a WAO benefit and not more than only 14% of the employees to whom a WIA benefit had been rejected because they were for less than 35% labour incapacitated.
Therefore, employers are advised to investigate into employees and former employees to whom the no-risk policy applies or applied. Where necessary, with retroactive effect for five years, the tax authorities may be requested to review the premium decisions. So in 2019 premium decisions revision can still be requested for the years 2014-2019. Experience has shown that in particular the 2014 premium decisions (the first year in which the Bezava law applied and in which the benefits of “safety netters” were included) contained many errors. In order to still have the premium decision for that year revised, a revision request should be submitted to the tax authorities in 2019 at the latest.
It is not yet known whether the tax authorities have accepted the ruling of the Court of Appeal. They may still appeal to the Supreme Court.

Leave a comment

Name: *
E-mail address: *
Your comment:
Fill in the code: *


No comments.