Settlement Agreement and WIA: What Does an Agreement Mean for Your Benefit?

Settlement agreement and your WIA benefit

If you have been off sick for some time and your employer proposes a settlement agreement, you are right to wonder what this means for your WIA benefit. Signing such an agreement can affect the amount and continuity of your benefit, particularly if the timing is not right. Below you can read what to look out for.

What is the WIA and when are you entitled to it?

The Work and Income according to Labour Capacity Act (WIA) is intended for employees who, after two years of illness, are still unable to work fully. The UWV then assesses how much you are still able to earn compared to your previous salary. On that basis, you fall under either the IVA (fully and permanently incapacitated for work) or the WGA (partially or temporarily incapacitated for work).

It is important to understand that your WIA application and your employment contract are two separate processes. Nevertheless, they intersect at the moment a settlement agreement is placed on the table.

When does a settlement agreement play a role in relation to the WIA?

A settlement agreement may also be offered during or shortly after the two-year period of illness. Sometimes an employer does this just before the WIA assessment takes place, and sometimes only afterwards. The moment at which you sign makes a significant difference.

If you sign before the WIA assessment, you run the risk of missing out on the application procedure or of uncertainty arising regarding the obligation to continue paying your salary during the remaining period. If you sign after the WIA has been granted, the consequences for the benefit itself are generally more limited, but there are still points to be aware of even then.

What changes to your WIA benefit when a settlement agreement is involved?

Your WIA benefit is linked to your incapacity for work, not to your employment contract. In principle, that benefit continues even after you and your employer part ways through a settlement agreement. However, there are situations in which the benefit may be at risk:

• Verkeerde einddatum: if the official end date of the employment contract does not connect seamlessly with the WIA decision, gaps may arise in your income.
• Incorrect wording in the settlement agreement: if the agreement contains anything that suggests you resigned of your own accord or that illness played no part, this may have consequences for the assessment by the UWV.
• Provisions regarding additional earnings or reintegration: if the settlement agreement contains provisions about work you are going to carry out, this may affect your percentage of incapacity for work.
• No account taken of the reassessment period: The WIA is reassessed periodically; any arrangements in the settlement agreement must not interfere with this process.

Pay close attention to the content of the settlement agreement

Not every settlement agreement is the same. The standard texts provided by employers are almost always drafted in the employer's favour. This means you must review the text critically before you sign.

A few things to check specifically:

• Does the stated reason for termination match the actual situation?
• Is a correct transition payment included, even if you are already receiving WIA benefit?
• Are there arrangements for an additional payment on top of the statutory transition payment?
• Does the settlement agreement contain a full and final discharge that also excludes future claims?
• Has the end date been carefully aligned with the WIA decision?

More general information about your rights in connection with a settlement agreement during illness can be found on the page Settlement agreement during illness: everything you need to know.

Transition payment and WIA: are you entitled to these?

Yes, even if you are receiving a WIA benefit, you are in principle entitled to a transition payment upon dismissal by means of a settlement agreement. The amount depends on your years of service and your salary. Employers sometimes try to circumvent this by arguing that the WIA benefit already provides sufficient compensation. That is not legally correct. Do not be misled and always verify that the payment has been calculated correctly.

Wat kun je zelf doen?

There are a few concrete steps you can take if you are offered a settlement agreement while you are receiving, or expect to receive, a WIA benefit:

• Always request time to consider; you have a statutory right of fourteen days in which to withdraw your signature.
• Have the text reviewed by an employment law specialist before you sign.
• Ask UWV or an expert to explain what the termination means for your specific benefit situation.
• Negotiate the terms; a first offer is rarely the final one.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven, we know that a settlement agreement in combination with a WIA process raises many questions. We help you understand the wording, map out the consequences for your benefit, and negotiate better terms. That way, you are not facing your employer alone.

Would you like to know what your position is? Feel free to contact us with no obligation. We are happy to think things through with you.

Frequently asked questions

Will I lose my WIA benefit if I sign a settlement agreement?

In most cases, no, because the WIA is linked to your incapacity for work and not to your employment contract. However, certain provisions in the settlement agreement or incorrect timing can indirectly have consequences. Always have the agreement checked.

Am I entitled to a transition payment if I am already receiving WIA?

Yes, even if you are receiving a WIA benefit, you are in principle entitled to a transition payment upon dismissal by means of a settlement agreement. The amount is calculated on the basis of your years of service and salary. Check whether this has been correctly included in the agreement.

What is the best moment to sign a settlement agreement in relation to the WIA assessment?

Generally speaking, it is wiser to wait until after the WIA decision, so that you know where you stand. If you sign beforehand, you risk income gaps or complications in the application process. Always seek advice about your specific situation.

We are happy to think along with you. For advice tailored to your situation, we would be glad to talk. No rights can be derived from the content of this page and it may contain inaccuracies.