The mandatory disability insurance (AOV) will cost a maximum of €195 p/m

  • KVK Editors
  • Background
  • Edited 10 July 2024
  • 2 min
  • Rules and laws

A new law that will make occupational disability insurance (AOV) mandatory for entrepreneurs is being prepared. Entrepreneurs will pay a maximum of €195 per month for AOV. This is stated in a legislative proposal. Find out more.

The Basisverzekering arbeidsongeschiktheid zelfstandigen (BAZ, in Dutch) legislative proposal was made public on 11 June 2024. You can comment on that proposal until 23 July in a so-called consultation. The precise details of the law and the moment the AOV becomes mandatory have not been fixed yet. This articles lists the main items in the proposal. 

AOV for entrepreneurs

With an AOV, entrepreneurs insure themselves against loss of income due to illness or incapacity for work. This is currently not mandatory. The proposal, which is not yet final, states that the AOV will become mandatory for self-employed professionals who are considered entrepreneurs for income tax by the Netherlands Tax Administration (in Dutch). 

Many self-employed people do not have an occupational disability insurance policy (in Dutch). They often have other solutions to reduce the financial risk in case of incapacity for work.

The proposed premium for mandatory AOV

In the future, you must have an AOV if you have profits from your business for income tax purposes. An AOV is not compulsory for collaborating spouses. If you are still active as an entrepreneur after you reach the state pension age, you do not have to pay premiums. However, if you do not pay, you are not entitled to benefits either. This is in the proposal.

The annual premium will be about 6.5% of the taxable profit from your business, including the SME profit exemption and the entrepreneur allowance. Per month, the entrepreneur pays a maximum of about €195 for the AOV. That amount is based on the 2024 minimum wage.

You pay the premiums to the Tax Administration. You can deduct the amount from your profits. The premium itself is taxed. 

Be prepared for loss of income

The exact rules and when mandatory disability insurance will come into effect are not yet fixed. In the meantime, something could happen to you that prevents you from working. Therefore, think about how you will manage your finances if something unexpected happens and you cannot work.

Mandatory AOV benefits

The UWV starts paying invalidity benefits after 1year of illness. This benefit continues up to the AOW pension age. You are entitled to a benefit if, due to an illness, you are no longer able to earn an amount at least equal to the minimum wage.

The amount of the benefit is 70% of the taxable earnings before incapacity for work. That amount is at most equal to the minimum wage. This is different from employees. There, the last earned wage is taken into account.

Opt-out of mandatory AOV

Self-employed people who already have private disability insurance can continue to use it. Entrepreneurs who find the mandatory AOV insufficient or prefer private insurance can also make use of a so-called opt-out.

Such private insurance must, however, meet a number of conditions. For instance, the premium must be at least equal to that of the mandatory AOV. Also, the amount of the disability benefit must not be lower than that of the mandatory AOV. The private disability insurance must also continue until the state pension age.

A transitional right will apply to existing insurance policies.

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