If you are ill and sign a settlement agreement, you are right to wonder whether you are still entitled to unemployment benefit afterwards. The answer is not always straightforward: there are specific conditions you must meet, and a wrong step can cost you your benefit. In this article, you can read what to watch out for.
What is the problem with unemployment benefit and illness?
Normally, when you are ill you are not entitled to unemployment benefit but to a Sickness Benefit through the UWV. The two schemes are mutually exclusive. Nevertheless, there are situations in which people are ill and still sign a settlement agreement. This raises the question: which benefit do you then receive, and do you lose your entitlement to either one?
After signing, the UWV always assesses whether you as an employee contributed to your own dismissal. That is a crucial point. If you are found to have become unemployed through your own fault, unemployment benefit will be refused or reduced.
You are entitled to unemployment benefit when you: * Are out of work through no fault of your own. * Are available for work. * Are actively looking for work. * Meet any specific residency or contribution conditions set by your country.
In principle, you are entitled to unemployment benefit after a settlement agreement if a number of basic conditions are met. The most relevant ones are:
- You did not become unemployed through your own fault — the initiative for dismissal lay with the employer.
- You meet the weeks requirement: in the 36 weeks prior to your unemployment, you worked for at least 26 weeks.
- The end date in the settlement agreement is no earlier than the date on which your employer would have been permitted to terminate the employment contract in accordance with the applicable notice period.
- The agreement contains no statement suggesting that you are agreeing to resign of your own accord.
That last point in particular is a pitfall. The wording of a settlement agreement can have significant consequences for how the UWV assesses your situation.
What changes if you are ill?
If you are ill at the time of signing, there are additional points to be aware of. During the first two years of illness, a prohibition on termination applies: your employer may not unilaterally terminate the employment contract on account of your illness. However, that prohibition does not apply in the case of a settlement agreement — you yourself can agree to termination.
But be aware: if you are ill and the employment contract ends by means of a settlement agreement, your right to continued payment of salary ceases. You are then dependent on Sickness Benefit, provided you are entitled to it. Whether you subsequently move on to unemployment benefit depends on your recovery and the specific circumstances.
The risk of culpable unemployment
The UWV always scrutinises settlement agreements carefully. If you, as an ill employee, agree to termination at a time when your employer had no legal right to dismiss you, the UWV may conclude that you unnecessarily cooperated in your own dismissal. That risk is real.
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Plan a conversationPractical situations in which this risk is greater:
- The employer puts pressure on you and you sign without seeking legal advice.
- The settlement agreement contains a clause stating that you are agreeing to dismissal ‘voluntarily’.
- An end date is specified that falls earlier than the statutory notice period would permit.
- No neutral reason for dismissal is included, but instead wording that identifies you as the initiating party.
For further explanation of the risks surrounding illness and settlement agreements, also read Settlement agreement during illness: everything you need to know.
Sickness Benefit as an interim solution
If you are ill at the time your employment ends, you may be eligible for a Sickness Benefit through the UWV. This applies when you no longer have an employer paying your salary — which is precisely the situation following a settlement agreement. Sickness Benefit then acts as a safety net until you recover. Once you have recovered and meet the unemployment benefit conditions, you can still apply for unemployment benefit.
Bear in mind that Sickness Benefit is generally lower than your previous salary, and that waiting periods and administrative obligations apply. Make sure you arrange this in good time.
What can you do to protect your rights?
There are steps you can take to safeguard your entitlements as effectively as possible:
- Always have the settlement agreement reviewed by an employment lawyer before you sign.
- Check that the notice period has been correctly reflected in the end date.
- Ensure that the reason for dismissal is clearly worded and shown to have been initiated by the employer.
- Ask for the inclusion of a dismissal ground that is favourable to your unemployment benefit claim.
- Report your illness to the UWV as soon as possible if your employment ends while you are still incapacitated for work.
- Keep all correspondence with your employer regarding the dismissal.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we understand how complex it is to be ill whilst simultaneously navigating dismissal procedures and benefit rules. We help employees in Eindhoven and the rest of Brabant to gain clarity on their position, critically assess the settlement agreement, and avoid unnecessarily losing their rights.
Are you uncertain about your situation, or have you received a settlement agreement whilst you are ill? Please do not hesitate to contact us for a no-obligation consultation. We would be happy to look at your situation together.
Frequently asked questions
Am I always entitled to unemployment benefit after signing a settlement agreement during illness?
Not automatically. The UWV assesses whether you became unemployed through your own fault. If the settlement agreement has been drawn up correctly and the initiative lay with the employer, you are in principle entitled to unemployment benefit — provided you also meet the weeks requirement.
What if I am still ill on the end date?
In that case, you may be entitled to a Sickness Benefit through the UWV as a safety net. You must apply for this yourself. Only after recovery can you become eligible for unemployment benefit, provided you meet the conditions.
Can my employer force me to sign a settlement agreement during illness?
No. You always have the right to refuse or to ask for time to consider. You have a statutory right to dissolve the agreement within fourteen days of signing it, without giving any reason.
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.
