Unemployment benefit after a settlement agreement during illness: are you entitled to it?

Are you entitled to unemployment benefit (WW) after a settlement agreement when you are ill?

Receiving unemployment benefit (WW) after a settlement agreement during illness is not a given. We explain the conditions and pitfalls so that you do not lose out on your benefit.

If you are ill and nonetheless sign a settlement agreement, you may rightly wonder whether you are still entitled to unemployment benefit (WW) afterwards. The answer is not always straightforward: there are specific conditions you must meet, and a wrong step can cost you your benefit. This article explains what to look out for.

What is the problem with WW and illness?

Normally, when you are ill you are not entitled to WW but to a Sickness Benefit (Ziektewet) payment through the UWV. The two schemes are mutually exclusive. Nevertheless, there are situations in which people are ill and also sign a settlement agreement. This raises the question: which benefit will you then receive, and do you lose your entitlement to either one?

After the agreement is signed, the UWV will always assess whether you as the employee cooperated in bringing about your own dismissal. That is a crucial point. If it is found that you became unemployed through your own fault, the WW will be refused or reduced.

When are you entitled to WW?

In principle you are entitled to WW following a settlement agreement if a number of basic conditions are met. The most relevant are:

• You did not become unemployed through your own fault — the initiative for the dismissal lay with the employer.
• You meet the weeks requirement: in the 36 weeks before 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 was permitted to terminate the employment contract in accordance with the applicable notice period.
• The agreement contains no declaration suggesting that you agree to dismissal at your own request.

That last point in particular is a pitfall. Wording in the settlement agreement can have major 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 dismissal applies: your employer may not unilaterally terminate the employment contract on account of your illness. However, that prohibition on dismissal does not apply to a settlement agreement — you yourself can agree to termination.

Bear in mind, however, that if you are ill and the employment contract ends by means of a settlement agreement, your right to continued payment of wages lapses. You will then be dependent on the Sickness Benefit Act (Ziektewet), provided you are entitled to it. Whether you subsequently move on to unemployment benefit (WW) 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 a termination whilst your employer was not legally in a position to dismiss you, the UWV may take the view that you unnecessarily cooperated in your own dismissal. That risk is real.

Practical 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'.
• The agreement contains an end date 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 more explanation of the risks surrounding illness and settlement agreements, read also Settlement agreement during illness: everything you need to know.

Sickness Benefit Act as an interim solution

If you are ill at the time your employment ends, you may be eligible for a benefit under the Sickness Benefit Act (Ziektewet) through the UWV. This applies when you no longer have an employer who continues to pay your wages — and that is precisely the situation following a settlement agreement. The Sickness Benefit Act then acts as a safety net until you recover. Once you have recovered and meet the conditions for unemployment benefit (WW), you can still apply for a WW benefit.

Please be aware that a Sickness Benefit Act payment 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 yourself 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 formulated and stated as employer-initiated.
• Request the inclusion of a ground for termination that is favourable for unemployment benefit (WW) purposes in the agreement.
• Register as incapacitated for work with the UWV as soon as possible if your employment ends while you are still unfit for work.
• Keep all correspondence with your employer regarding the dismissal.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven, we understand how complex it can be to be ill and at the same time navigate dismissal procedures and benefit rules. We help employees in Eindhoven and the rest of Brabant to clarify their position, critically assess the settlement agreement and avoid unnecessarily losing their rights.

Are you unsure about your situation, or have you received a settlement agreement while you are ill? Please feel free to contact us with no obligation. We are happy to look at your case together with you.

Frequently asked questions

Am I always entitled to unemployment benefit (WW) after signing a settlement agreement during illness?

Not automatically. The UWV assesses whether you have become 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 (WW) — provided you also meet the weeks-worked requirement.

What if I am still ill on the end date?

In that case you may be entitled to a Sickness Benefit payment via the UWV as a safety net. You must apply for this yourself. Only after recovery may you become eligible for unemployment benefit (WW), provided you meet the relevant conditions.

Can my employer force me to sign a settlement agreement during illness?

No. You always have the freedom 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 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.