Statutory Sick Pay and Settlement Agreements: What Happens to Your Sickness Benefit Rights?

If you are ill and your employer offers you a settlement agreement, you may be wondering what will happen to your income afterwards. The sickness benefit (ZW benefit) then plays an important role, but there are conditions you must meet in order to retain entitlement to it. In this article you can read how this works and what to look out for.

What is the sickness benefit?

The Sickness Benefits Act (Ziektewet) is a safety-net scheme operated by UWV. Employees who are ill but no longer have an employer paying their salary may be eligible for a ZW benefit. This applies, for example, to agency workers, people whose fixed-term contract expires during a period of illness, or employees who leave employment by means of a settlement agreement while they are ill.

In most cases, the benefit amounts to 70% of your daily wage, 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 Sickness Benefit (ZW) after a settlement agreement?

Entitlement to a Sickness Benefit (ZW) does not arise automatically. The UWV assesses whether you meet the conditions. One of the most important requirements is that you were insured under the Sickness Act (Ziektewet) on the first day of illness. This means that you must have been an employee at that time and that the illness already existed before or at the moment your employment ended.

If you leave employment whilst ill by means of a settlement agreement, the so-called continued effect (nawerking) of the Sickness Act applies. This means that you may still be entitled to a Sickness Benefit (ZW), even after you are officially no longer an employee, provided you meet the conditions.

Continued effect (nawerking): what does this mean in practice?

The continued-effect period is four weeks after the end of your employment. If you are already ill on the day your employment ends, you can apply for a Sickness Benefit (ZW) from the UWV within those four weeks. If you wait longer, you may lose your entitlements. It is therefore important that you arrange this in good time.

The risk of the waiting period for unemployment benefit (WW)

In addition to the Sickness Benefit (ZW), unemployment benefit (WW) is also relevant. 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 (WW).

The position is different for the Sickness Benefit (ZW): if you are ill at the time your employment ends, you will in principle transfer to the Sickness Benefit (ZW). Being ill and making use of the Sickness Act temporarily excludes entitlement to unemployment benefit (WW), but protects your income in a different way.

Practical points to consider with a settlement agreement and Sickness Benefit (ZW)

Would you like to know whether your situation is properly covered? Pay attention to the following points:

• Meld je tijdig ziek: Make sure your illness is officially recorded before the end date stated in the settlement agreement.
• Apply for the Sickness Benefit (ZW) promptly: Do this within the continued-effect period of four weeks after your employment ends.
• Check the end date in the settlement agreement (VSO): An end date that is too early can have an adverse effect on your benefit entitlements.
• Laat de VSO checken: A settlement agreement sometimes contains clauses that can affect your entitlement to benefits.
• Contact UWV: As soon as your employment ends and you are still ill, contact UWV yourself or seek guidance in doing so.
• Let op de bedenktermijn: After signing a settlement agreement, you have fourteen days in which to reconsider your decision.

What if you are also entitled to continued payment of salary?

During the term of your employment, your employer is in principle obliged to continue paying your salary in the event of illness, for a maximum of two years. If you sign a settlement agreement before those two years have elapsed, you are in effect relinquishing that obligation to continue paying your salary.

It is advisable to weigh this up carefully. A settlement agreement can sometimes offer advantages, such as a higher payment or greater certainty. However, you are also giving something up in return. Make sure you are properly informed before you sign, so that you understand the consequences for your specific situation.

You can find more background information on this subject in the comprehensive overview: Settlement agreement during illness: everything you need to know.

Why Employment 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 look at the implications for your sickness benefit (ZW), your financial situation, and your position under employment law.

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. We are happy to think things through with you.

Frequently asked questions

Am I entitled to sickness benefit (ZW) if I sign a settlement agreement while I am ill?

Yes, that is possible. If you are ill on the day your employment ends, you may be entitled to sickness benefit (ZW) through UWV. You must apply for this within four weeks of leaving employment.

Can my employer compel me to sign a settlement agreement while I am ill?

No, you can never be forced to sign a settlement agreement. Furthermore, a prohibition on dismissal applies during illness. Only sign if you understand the contents and agree to them.

Will I lose my ZW entitlements if I agree to an early end date?

An early end date may affect the waiting period for unemployment benefit (WW), but the ZW benefit is linked to your first day of illness and the post-employment period. Have a legal adviser check the settlement agreement (VSO) to avoid any surprises.

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.