1 December 2011 onwards
As of 1 December 2011, Indian employees on secondment are covered exclusively under Indian social security legislation. To show they are insured in India, they require a secondment certificate. They are no longer insured under Dutch insurance schemes. The same applies to their family members living in the Netherlands, unless they work in the Netherlands, in which case they will be insured in the Netherlands. From this date, employers therefore no longer have to deduct and pay Dutch social insurance contributions for employees with a secondment certificate.
National insurance schemes
Consequences for employees;
Employees stopped building up rights to an AOW old age pension as of 1 December 2011. For example, an employee who has already been working in the Netherlands for 4 years as of 1 December 2011 will have built up rights to 8% of the full amount of AOW pension. Each year of insurance entitles a person to 2% of the full AOW pension. The SVB will pay the AOW pension as from an employee’s 65th birthday. If you move to another country, this may affect your AOW pension. Restrictions apply to the payment of AOW pensions to certain countries. Employees requiring information about their AOW pension rights before they leave the Netherlands can visit www.svb.nl and request an SVB pension statement (pensioenoverzicht). They will need a DigiD code for this. If you live outside the Netherlands, you cannot apply for a DigiD code in the traditional method, but may be able to apply for one directly from the SVB website (conditions apply).
If an employee dies after 1 December 2011, a surviving partner is not entitled to a Dutch survivor benefit, unless the employee had taken out voluntary insurance to continue the insurance under the survivor benefit scheme. More information is available at www.svb.nl.
An employee’s entitlement to child benefit ended on 1 January 2012.
Employee insurance schemes
Since 1 December 2011, the employee is no longer insured against the risk of unemployment. If the employee becomes unemployed, no Dutch unemployment benefit will be payable.
Since 1 December 2011, the employee is no longer insured against the risk of sickness. An employee who becomes sick is not entitled to a Dutch sickness benefit.
Incapacity for work (WIA benefit)
Since 1 December 2011, an employee is no longer insured under the WIA scheme. If an employee becomes incapacitated, India will pay the incapacity benefit because your employee will be insured under Indian legislation.
Since 1 December 2011, costs incurred for medical care are no longer reimbursed. Employers can, however, take out private health insurance to cover these costs.
Companies can apply for a secondment certificate for employees. It is advised that companies apply for secondment certificates as soon as possible so that employees will not have to repay any child benefit or reimbursements for medical costs. Indian company employees are advised to apply for the secondment certificate as soon as possible from The Employees’ Provident Fund Organisation; please visit www.epfindia.com. Employees must keep an original copy of the secondment certificate. Employers must also keep a copy, so that in the event of an inspection, they can show that no contributions are due in the Netherlands. In cases where a request for a secondment certificate is still being processed by EPFO, the SVB may ask the employee/employer to show a copy of the application form.