Assessment of Degree of Incapacity for Work Before July 1, 2024
The determination of the degree of incapacity for work was based on a theoretical assessment and, if the employee had performed work after becoming incapacitated for work, a practical assessment.
The theoretical assessment involves a determination by the UWV occupational consultant what the employee is still capable of earning. This is based on jobs that the employee could theoretically perform and that offer the highest possible income. A comparison is then made between the reference hourly wage (the indexed hourly wage the employee earned before their illness) and the salary from the median of the three highest-paying theoretical jobs. The difference between these amounts constitutes the degree of incapacity for work.
If an employee engages in suitable work after becoming incapacitated for work and earns an income from it, a practical assessment is also conducted. This involves comparing the earned income with the reference hourly wage.
The assessment resulting in the lowest degree of incapacity for work is used to determine eligibility for a WIA benefit.
Reason for the Legislative Amendment
In recent years, there has been considerable concern over backlogs at the UWV and the prolonged uncertainty for employees (and employers) regarding income and benefit eligibility. In response, several measures have already been taken to address these backlogs. One of these measures is the simplified assessment for employees aged 60 and above (this measure will end on December 31, 2024). Under this assessment, eligibility for a WIA benefit is determined solely based on written documents.
To further reduce backlogs and improve the clarity of the assessment of the degree of incapacity for work, the government has explored ways to enhance the determination process. As of July 1, 2024, a new measure has been introduced for a three-year period, altering the method of the assessment of the degree of incapacity for work.
Assessment of Degree of Incapacity for Work After July 1, 2024
The new measure stipulates that, in principle, the theoretical assessment will no longer be conducted if the employee is performing suitable work after becoming incapacitated for work. The effect of this change is that for a certain group (the employees who are carrying out suitable work), the assessment is modified.
The involvement of the insurance physician will be more limited, saving significant time. The physician’s assessment is restricted to two key questions: i) is the employee unfit to perform their last job due to illness, disability, pregnancy, or childbirth; and ii) do the tasks performed by the employee exceed their physical or mental capacity? The insurance physician is no longer required to create a complete work capacity profile or prepare a Functional Abilities List (FML). However, if the physician concludes that the employee’s current tasks exceed their capacity, a full work capacity profile will still be prepared, and a theoretical assessment will be conducted.
The role of the occupational consultant changes too. He will assess the nature, scope, tasks, and demands of the work performed by the employee to determine whether the function meets the criteria for a practical assessment.
In cases where a practical assessment is conducted and the degree of incapacity for work is determined to be at least 80%, the employee may be eligible for a benefit under the Fully Disabled Persons Income Scheme (IVA), in addition to the benefit under the Partial Capability for Work Act (WGA). In such cases, a theoretical assessment will still be required to confirm IVA benefit eligibility.
Conditions
The ‘practical assessment’ measure applies only when an employee performs suitable work after becoming incapacitated for work. The criteria for determining whether work is considered suitable remain unchanged under this measure. The explanatory notes to the legislative amendment refer to criteria established or confirmed in case law over the years:
These criteria are:
- The employee performs actual work.
- The work is suitable for the employee’s capabilities and skills.
- The job is considered generally accepted work.
- The income reflects the remaining earning capacity.
- The income is sufficiently determinable.
Consequences
The measure aims to reduce the backlog of the degree of incapacity for work assessments, providing employees with financial clarity sooner. Additionally, the determination will be based on information already familiar to both the employee and employer, making the process more transparent and understandable.
However, there may also be negative consequences for employers. In some cases, the new measure could result in a higher WIA benefit being granted than would have been the case under the old rules. Even though the measure is temporary, it may have long-term implications for the level of the WIA benefit, as benefits remain unchanged unless there is a reason to conduct a reassessment. According to the explanatory notes, this will lead to higher costs for employers in approximately 10% of cases. Despite these potential drawbacks, the government has concluded that the need to reduce backlogs and provide quicker clarity outweighs the limited financial risks for (former) employers.
Questions?
If you have questions about this legislative amendment or related topics, feel free to contact Laura Gringhuis or one of our other specialists in the Employment, Employee Participation & Mediation team!
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