If you are ill and your employer offers you a settlement agreement, you may well wonder what will happen to your income afterwards. The statutory sickness benefit (ZW benefit) plays an important role in this, but there are conditions you must meet in order to retain your entitlement. This article explains how it works and what to look out for.
What is the statutory sickness benefit?
The Sickness Benefits Act (Ziektewet) is a safety-net scheme administered by the UWV. Employees who are ill but no longer have an employer paying their wages may be eligible for a ZW benefit. This applies, for example, to agency workers, people on a fixed-term contract that expires during a period of illness, or employees who leave employment via a settlement agreement whilst they are sick.
The benefit amounts to 70% of your daily wage in most cases, and continues in principle for as long as you are incapacitated for work, up to a maximum of 104 weeks.
When are you entitled to a ZW benefit after a settlement agreement?
Entitlement to a ZW benefit is not automatic. The UWV assesses whether you meet the conditions. One of the most important requirements is that you were insured under the Sickness Benefits Act on the first day of your illness. This means you must have been an employee at that point and that the illness must have existed before or at the moment your employment ended.
If you leave employment whilst sick via a settlement agreement, the so-called extended coverage (nawerking) of the Sickness Benefits Act applies. This means you may still claim a ZW benefit even after you are officially no longer an employee, provided you meet the conditions.
Extended coverage: what does this mean in practice?
The extended coverage period is four weeks after the end of your employment. If you are already ill on the day your employment ends, you can apply to the UWV for a ZW benefit within those four weeks. If you wait longer, you may lose your entitlement. It is therefore important to arrange this promptly.
The risk of the waiting period for unemployment benefit
In addition to the ZW benefit, unemployment benefit (WW) also comes into play. If you sign a settlement agreement with an end date that falls earlier than the date on which your contract would normally have ended, the UWV may apply a notional notice period. In that case, you will temporarily not be entitled to unemployment benefit.
The position is different for the ZW benefit: if you are ill when your employment ends, you will in principle transfer to the ZW benefit. Being ill and making use of the Sickness Benefits Act temporarily excludes you from unemployment benefit, but protects your income in another way.
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Plan a conversationPractical points to consider with a settlement agreement and sickness benefit
If you want to make sure your situation is properly arranged, pay attention to the following points:
- Report your illness promptly: Ensure your illness is formally recorded before the end date stated in the settlement agreement.
- Apply for the ZW benefit without delay: Do this within the extended coverage period of four weeks after leaving employment.
- Check the end date in the settlement agreement: An end date that is too early can have an adverse effect on your benefit entitlements.
- Have the settlement agreement checked: A settlement agreement sometimes contains clauses that can affect your right to benefit.
- Contact the UWV: As soon as your employment ends and you are still ill, get in touch yourself or seek guidance.
- Be aware of the cooling-off period: After signing a settlement agreement, you have fourteen days in which to withdraw your decision.
What if you are also entitled to continued salary payments?
During the term of your employment, your employer is in principle obliged to continue paying your salary during illness for a maximum of two years. If you sign a settlement agreement before those two years have elapsed, you are in effect giving up that obligation to continue salary payments.
It is wise to weigh this up carefully. A settlement agreement can sometimes offer advantages, such as a higher compensation payment or greater certainty. However, there is always a trade-off involved. Make sure you are properly informed before you sign, so that you understand the consequences for your particular situation.
Further background on this subject can be found in the comprehensive overview: Settlement agreement during illness: everything you need to know.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we help employees in the Eindhoven and Brabant region to make the right choices when it comes to dismissal, illness, and settlement agreements. Together with you, we examine the consequences for your ZW benefit, your financial situation, and your employment law position.
Are you unsure whether your settlement agreement has been properly arranged, or would you like to know what your rights are? Please feel free to contact us without obligation. We are happy to think things through with you.
Frequently asked questions
Am I entitled to a ZW benefit if I sign a settlement agreement whilst I am ill?
Yes, this is possible. If you are ill on the day your employment ends, you may be entitled to a ZW benefit through the UWV. You must apply for this within four weeks of leaving employment.
Can my employer compel me to sign a settlement agreement whilst I am ill?
No, you can never be forced to sign a settlement agreement. In addition, there is a prohibition on giving notice during illness. Only sign if you understand the contents and agree to them.
Will I lose my ZW entitlements if I agree to an end date that is too early?
An end date that is too early can have consequences for the waiting period for unemployment benefit, but the ZW benefit is linked to your first day of illness and the extended coverage period. Have a solicitor check the settlement agreement to avoid any unwelcome surprises.
We're happy to help you brainstorm ideas. For advice tailored to your specific situation, we'd be happy to sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
