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Insurance obligation with van oers

Insurance obligation

If you work in the country where you live, you will generally be covered by the social security system there. Usually you will have at least a broad understanding of that country’s rules for medical insurance and for disability insurance and benefits.

Working across borders can have important consequences for your social security position. The country where you work is not necessarily the country where you pay social security contributions or receive benefits.

The applicable rules depend on your individual working situation. Different rules may apply if you work in one country, are temporarily assigned abroad or regularly work in two or more countries. Your place of residence and the countries involved can also be relevant.

Van Oers helps employers and employees determine which social security system applies and what needs to be arranged in practice.

Insurance obligation with van oers

Working within Europe

If you work across borders within Europe, European social security rules generally determine which country’s legislation applies as in principle the rules of one country will be applicable. The main principle is that an employee is covered by the social security system of the country where the work is performed.

However, important exceptions apply. For example, an employee who is temporarily posted to another country may, subject to certain conditions, remain covered by the social security system of the home country. Specific rules also apply to employees who regularly work in two or more countries.

An A1-certificate can be used to confirm which country’s social security legislation applies.

Working outside Europe

When an employee works outside Europe, the social security position depends on the countries involved. The Netherlands has concluded social security treaties with various countries. If a treaty is applicable, the treaty will determine which country’s social security legislation applies and for which insurances. Those treaties can help prevent an employee from being subject to social security contributions in two countries or not being covered at all.

If no social security agreement applies, the national legislation of both countries must be considered. This can result in additional obligations or, in some cases, gaps in social security coverage.

Social Security in the Netherlands

The Netherlands has two main categories for social security. The first is national insurance, for which the insured generally pays his or her own contributions. In employment situations, the contributions are generally withheld and remitted from the employee’s gross wages. The second category is employee insurance, which is paid by the employer.

National insurances are insurances such as:

the General Old Age Pensions Act (AOW);
the Surviving Dependants Act (Anw); and
the Long-term Care Act (Wlz).

Employee insurance covering risks such as:

unemployment (WW);
sickness in specific circumstances (ZW); and
long-term incapacity for work (WIA).

Depending on the employee’s position, Dutch healthcare insurance requirements may also apply. Under the Dutch Healthcare Insurance Act, persons who are subject to the insurance obligation must take out qualifying health insurance.

For cross-border workers, the healthcare position can require additional attention. For example, if you do not live in the country where you are covered by the social security scheme, arrangements may be required to obtain access to healthcare in the country of residence.

Insurance obligation with van oers

Employer obligations

Determining the applicable social security system is only the first step. Employers also need to establish where and how contributions must be paid.

Cross-border employment may result in employer registration and payroll obligations in another country. The employer may need to withhold and remit contributions locally, even if it has no local entity.

In the Netherlands, employee and employer contributions are only levied on the employee’s income up to a certain maximum. Other countries, however, do not always apply this ceiling. In addition, the rates sometimes differ significantly from one country to the next. An obligation to pay social security contributions in another country might therefore have a significant impact on the financial situation, for both the employer and the employee. Knowing what to expect upfront, will give you an opportunity to find a solution.

Social security contributions and benefits

Paying social security contributions in a country does not necessarily mean that every social security benefit will ultimately be paid by that same country.

Rules on unemployment, sickness, incapacity for work, pensions and healthcare can differ, particularly in the situation where an employee lives and works in different countries. It is important to not only understand your obligations, but also be aware of your rights.

How can Van Oers help?

Van Oers assists employers and employees with the social security aspects of international employment. We can help with, among other things:

determining which country’s social security legislation applies;
assessing the position of cross-border commuters, posted workers and employees working in multiple countries;
applying for social security certificates;
assessing the impact of working from home across borders;
determining employer registration and contribution obligations;
assessing (Dutch) healthcare insurance requirements;
reviewing the social security position of accompanying family members;
estimating the financial impact of social security contributions;
coordinating with foreign advisers and authorities; and
monitoring changes in an employee’s international working pattern.

Working across borders? Van Oers can help you understand your social security obligations and make sure the necessary arrangements are in place. Feel free to reach out to one of our specialists.