In addition to the unemployment benefit, there is an income provision for older unemployed people. When the unemployment benefit ends and you, as an older person, do not yet receive an AOW pension or another source of income such as a pension or salary, there is an income gap. This Income Provision for Older Unemployed Act, or IOW for short, is intended for this group of older unemployed people. This law applies to unemployed people aged 60 and over. This law has been amended several times in the past, causing the criteria to change slightly. What is the Income Provision for Older Unemployed Persons Act (IOW) and how and when do you qualify for it? If you have become unemployed as a person over 60 and, despite all your efforts and those of the UWV, you have not been able to find work, you will find yourself in a completely new situation after the end of your unemployment benefit: if at that time you If you have not yet reached retirement age, you will have to bridge a number of months, but often years, until you can enjoy your pension and you will therefore have to provide for your living during that time.
Who is this law intended for?
In general, for those who are unemployed and no longer receive unemployment benefits, there is the Participation Act, which enables you to provide for your livelihood, while you are obliged to look for work. This means that you do not have sufficient income or equity to provide for your livelihood and your partner’s income and equity also count. Your own assets and those of your partner may not exceed a certain amount.
Any pension or salary-related benefits are deducted from the IOW. Annuities are not included, unless the right to them has been granted to replace lost or future lost wages.
Older unemployed people
As a result of this law, older unemployed people would probably have to dip into their ,piggy bank,, often intended to supplement a pension, or sell their house. In combination with raising the state pension age and shortening the maximum unemployment benefit period, this creates a socially unacceptable situation. After all, this group no longer has the time or options to close the financial gap, with all the consequences that entails. The IOW is intended for this group.
The IOW for those over 60 after your unemployment benefit
You are eligible for an IOW benefit after the WW if you meet the following requirements:
- You were 60 years or older when your unemployment started
- Your unemployment benefit started after September 30, 2006
- You have received unemployment benefits for more than 3 months because you (again) met the years requirement at that time. If your benefit period of 3 months has already been extended by the remaining duration of a previous unemployment benefit entitlement, you do not meet this condition.
- Your unemployment benefit has reached its end date.
The IOW after your wage-related WGA benefit ends
You can receive an IOW benefit after your wage-related WGA benefit expires, if you meet the following conditions:
- You were over 60 when you started receiving your WGA benefit
- Your WGA benefit started after December 31, 2007 and before January 1, 2020.
- Your WGA benefit has come to an end. If you received unemployment benefits before you became incapacitated for work, you are only entitled to IOW benefits if you became unemployed after September 30, 2006 and if you were 60 years or older at the start of your unemployment.
Amount and duration of the benefit
The amount of the IOW benefit depends on the moment at which your previous WW benefit or your wage-related WGA benefit started, and can be broken down as follows:
If your WW or WGA benefit started before July 1, 2015, then the following rules apply:
- The IOW is never more than 70% of the applicable minimum wage
- The benefit may be lower if your WW or WGA benefit (in the last entire month before the end of the benefit) was lower than 70% of the then applicable minimum wage.
- If you also receive other income during your IOW benefit, such as a pension or salary. This income will then be fully deducted from the amount of your IOW benefit.
If your unemployment benefit or WGA benefit commenced on or after July 1, 2015, the following rules apply:
- Your IOW benefit will then never be higher than the established social minimum for a single person. This is the minimum amount that a single person needs to live on.
- The amount is determined annually by the Ministry of Social Affairs and Employment.
- Here too, if you have other income during your IOW benefit, such as wages or pension, these amounts will be deducted from your benefit.
NB It may happen that your IOW benefit is lower than the social minimum for a single person. This situation arises if the monthly wage for your unemployment benefit or wage-related WGA benefit in the last calendar month before your IOW benefit was lower than the social minimum for a single person. Your IOW benefit will then be 70% of the monthly wage.
The assets or income of any partner do not count towards the amount of the IOW benefit.
The IOW benefit starts when your unemployment benefit or your lo- related WGA benefit reaches the maximum benefit duration. The IOW benefit will continue until you reach state pension age.
In combination with your pension
In the past, it was not possible to postpone the pension benefit, which often starts at the age of 65, until the moment you receive your state pension. As a result, this was deducted from the IOW benefit, with all the dire financial consequences. It is now permitted to postpone this without a requirement to continue working, at least if the relevant pension regulations provide for this. This means that you can take full advantage of the IOW between the end of your unemployment benefit and your state pension age.
If you are entitled to an IOW benefit, it will continue until you reach the state pension age. You can find out when your AOW commences on the government website .
Obligations for an IOW benefit
If you receive an IOW benefit, you are expected to make an effort to find work, the so-called job application obligation. You must also accept suitable work that is offered to you. The UWV implements the IOW and can, under certain circumstances, exempt someone from the obligation to apply for a job. You do not have to apply for the IOW benefit yourself. In the past, the UWV checked whether you were eligible for the IOW after your unemployment benefit or WGA benefit expired, but this now only applies to those with a WGA benefit. People who come out of unemployment must apply for the IOW themselves digitally on my UWV.nl.
Cabinet plans to extend IOW benefits
For the time being, the government has determined that the IOW will continue to apply until 2027, for people aged 60 or older, on the day of their first unemployment benefit day. This has to do with the fact that this group is faced with the increase in the state pension age.