Have you dismissed a long-term sick employee and paid a transition allowance? You may be able to recover these costs (partially) through the UWV compensation scheme. Read here how it works and what to pay attention to.
When you dismiss an employee after two years of illness, you are obligated as an employer to pay a transition allowance. Since April 1, 2020, you can often recover these costs partially or fully through the Transition Allowance Compensation Scheme. This scheme even applies retroactively to allowances paid between July 1, 2015, and April 1, 2020, and also applies to civil servants.
Conditions for Compensation
To qualify for compensation, several conditions must be met:
- The employment relationship was terminated due to long-term incapacity for work (more than 2 years).
- The employee was still sick at the end of the employment relationship.
- The employee was entitled to a transition allowance and it was actually paid.
Amount of Compensation
In many cases, UWV reimburses the full paid transition allowance. The amount depends on the duration of employment, the last earned salary, and the actual amount paid. This can involve substantial amounts for employers.
Pay Attention to Deadlines
The application to UWV must be submitted within six months after payment of the transition allowance. If you are late, the right to compensation expires. From July 1, 2026, the scheme may also be limited to small employers only.
Our approach
We guide employers through every step of the process:
- Checking whether you meet the conditions
- Collecting the required supporting documents
- Submitting the application to UWV
- Guidance with any questions or additional investigation
More than just Compensation
Do you still have ongoing employment contracts with long-term sick employees or so-called dormant employment relationships? We also advise and support with terminating employment relationships, drafting settlement agreements, and conducting UWV dismissal procedures.
Conclusion
The compensation scheme can yield employers tens of thousands of euros. Do not let this opportunity pass and do not miss the application deadline. Contact our employment law attorneys for immediate support.
