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Calculation rules from July 1, 2020

As of July 1, 2020 there are adjustments in the gross statutory minimum wage. They apply to minimum amounts and benefits. The calculation rules provide insight into this.

These calculation rules incorporate the consequences of adjustments in the gross statutory minimum wage as of 1 July 2020 for benefit amounts and principles at the minimum level. Policy changes with regard to these benefit amounts are also included.

Adjustment of daily wages as of 1 July 2020

Ministerial regulation 2020-0000050963 provides that the (gross) minimum wage per day will be increased by 1.60 percent as of 1 July. The daily wages of the WAO / WIA, WW and ZW benefits will also be increased by that percentage as of 1 July. The maximum employee insurance premium premium will be fixed at EUR 57,232 on an annual basis during 2020. The annual amount is rounded down to whole euros.

Minimum (youth) wages

The minimum (youth) wages as of 1 July 2020 (gross per month, per week and per day, in euros, excluding holiday allowance):

Age Month Week Day
From 21 years old € 1,680.00 € 387.70 € 77.54
20 years € 1,344.00 € 310.15 € 62.03
19 years € 1,008.00 € 232.60 € 46.52
18 years € 840.00 € 193.85 € 38.77
17 years € 663.60 € 153.15 € 30.63
16 years € 579.60 € 133.75 € 26.75
15 years € 504.00 € 116.30 € 23.26

LIV and youth LIV

The low-income benefit (LIV) is a compensation for employers with people who earn a salary around the minimum wage. The new LIV criteria will follow in the calculation rules as of 1 January 2021. The minimum youth wage increase (youth LIV) compensates employers for the increase of the minimum youth wage. The criteria for youth LIV will be adjusted as of July 2020. The following table shows the resulting hourly wage criteria for youth LIV in 2020:

Age Lower limit Upper limit
20 years € 8.30 € 10.29
19 years € 6.23 € 9.24
18 years € 5.19 € 6.93

Minimum level benefits

AOW and Anw benefits are derived from the reference minimum wage for the AOW and the reference minimum wages for the assistance. In accordance with the net-net-link system, the gross amounts have been adjusted compared to January 2020.

Since 1 January 2012, the double general tax credit has been reduced in the reference minimum wage for social assistance. This means that the general tax credit falls by 2.5 percentage points every six months until the general tax credit is included once in the reference minimum wage for social assistance.

In the period 2014-2018, the phasing out was reduced by half. The run-off will also be tempered in the period 2019-2021. During this period, the general tax credit falls by 1.875 percentage points per half year. As of 1 July 2020, the general tax credit will be included 1.7 times in the calculation of the reference minimum wage for social assistance (if it had not been phased out in recent years, this would have been 2 times).

Income support has been introduced for the elderly, which depends on the years of accrual under the AOW. After indexation, the amount in 2020, with a full AOW accrual, will be 307.56 euros per year (unchanged as of July 2020). The allowance for ANWs in 2020 is EUR 208.68 per year (unchanged as of July 2020).

Principles for the Wajong, WAZ and WAZO benefits for the self-employed

From 1 July 2015, the cost-sharing standard in the Anw applies. As of January 1, 2019, the standard has been set at 50 percent of the minimum wage. In Annex II.1 the relevant amounts as of 1 July 202 are listed. The bases for the Wajong, WAZ and WAZO benefits for the self-employed, which are derived from the minimum (youth) wages, will also be adjusted as of 1 July 2020. The amounts per day (excluding holiday allowance) are as follows:

Age From 21 years old 20 years 19 years 18 years
Basis excl. Holiday allowance € 77.24 € 61.79 € 46.34 € 38.62

Wajong titleholders

The Wajongers Allowance Scheme ensures that Wajongers who are 18 years of age or older on 1 January, but who have not yet reached the age at which employees are entitled to the adult statutory minimum wage, receive an allowance in addition to the disability benefit. For Wajong beneficiaries under the age of 21, the levels of the allowance as of 1 July 2020 will be adjusted as follows:

Age 20 years 19 years 18 years
Per month € 10.24 € 17.09 € 17.79
Per year € 122.88 € 205.08 € 213.48

Allowance Act

The Supplementary Benefits Act provides a supplement to the wage loss benefit under, among other things, the Unemployment Insurance Act, Sickness Benefits Act (safety net), Wajong, WAO, WIA and IOW if the person’s income falls short of the relevant social minimum. The standard amount for married couples is linked to 100% of the gross reference minimum wage. The standard amount for singles from the age of 21 is 70% of the net reference minimum wage, while the standard amounts for 18 to 20-year-olds are linked to 75 percent of the relevant net minimum youth wages. The net coupled benefits of the Supplementary Benefits Act also take into account the reduction of the double general tax credit in the reference minimum wage since 1 January 2012.

The allowance is the difference between the gross benefit and the relevant standard amount, for some the allowance is capped. From 1 July 2016, the cost-sharing standard in the TW applies to 21-year-olds and older. The cost-sharing standard has been gradually reduced in recent years. The cost-sharing standard is now 50 percent for all relevant groups.

Premiums and premium limits

The Ministry of Social Affairs and Employment describes the premiums and premium limits for 2020 in Annexes I.1 and II.2:

Read here the Calculation Rules 1 July 2020 with appendix I.

Read here Annexes II.1 – II.3 to the Calculation Rules 1 July 2020

Read here Appendices II.4 – II.5 to the Calculation Rules 1 July 2020

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