TRANSITIONAL ALLOWANCE

Does the transitional allowance affect your (WW-uitkering) unemployment benefit?

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Does the transitional allowance or severance pay affect your entitlement to unemployment benefit? In this blog, we explain exactly how this works.

Upon dismissal, many questions often come to mind, especially about your financial situation. An important question is: does the transitional allowance or severance pay affect your right to benefits, such as unemployment benefit? In this blog, we explain exactly how this works and what you need to be aware of.

What is transition allowance?

The transitional allowance is a financial compensation you are entitled to when you are fired. This compensation is intended to support you in finding a new job or possible reorientation in the labour market. This is separate from any severance pay you may receive through negotiations in a settlement agreement.

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No direct impact on the right to WW-benefit

The good news: the transition allowance does not directly affect your entitlement to unemployment benefits. This is because the transitional allowance is considered a compensation and not a wage or income. You may therefore be entitled to both the compensation and WW-benefit.

When can a compensation do have an impact?

While the transitional allowance usually does not cause a problem, there are situations where a severance payment may have an impact on social benefits. This depends on how the compensation is paid:

Deferred benefit: If you receive severance pay in the form of an amount intended to bridge a period of unemployment, the UWV may see this as income. In that case, your right to unemployment benefit will be temporarily suspended.
Fictitious notice period: In the case of dismissal through a settlement agreement, you have to take the notice period into account. If your dismissal date falls earlier than the statutory notice period, the UWV may rule that your unemployment benefit will start after this fictitious notice period.

What about other social benefits?

The transitional allowance may affect social benefits, such as social welfare. When applying for social welfare benefits, your assets are reviewed. If you receive a high severance payment, this may result in you having to draw on your savings or this compensation before you are eligible for social welfare.

Get advice about your situation

Because the rules around compensation and benefits are complex, it is important to have your situation properly assessed by an employment lawyer. An employment lawyer can help you understand the financial consequences of a transitional allowance and advise on how best to have a settlement agreement drawn up.

Our team of employment lawyers will be happy to help you with advice on your transitional allowance, unemployment benefit and other social benefits. Together, we will ensure that you can take the next step in your career without any worries.

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