COVID 19-measures in the Netherlands
COVID 19-measures in the NetherlandsNo temporarily unemployment, but the “NOW-scheme”
Hester van Seventer
Hester van Seventer

Senior Legal Expert
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COVID 19-measures in the Netherlands: No temporarily unemployment, but the “NOW-scheme”


The Netherlands has also taken various measures to support entrepreneurs in these difficult times. In the Netherlands it was also possible until the 17th of March to apply for temporary unemployment.

However, this regulation was withdrawn at the 17th of March, and a new regulation was announced. Based on this new regulation, employers can receive compensation of up to 90% of their wage costs. The amount of compensation depends on their loss of turnover. This regulation applies retroactively from 1 March 2020.

The Dutch government today provided important additional information on the NOW-scheme. We hereby inform you about this NOW-scheme.

The NOW-scheme is also open to foreign employers who employ an employee who is ensured under the Dutch social security system. Of course, the foreign employers must also meet all conditions.

The NOW-scheme

Practically all employers are eagerly awaiting it: the possibility to apply for compensation for labour costs. The government has today indicated that this possibility will probably be available from Monday, April 6. Friday the 3rd of April will be announced when it will be definitively possible to submit applications.

The scheme will initially apply for three months, but the government explicitly states that it can be extended if necessary.

Subsidy height
If you meet the conditions, you can apply for a subsidy for your labour costs. The amount depends on your wage costs, and on your decrease in turnover. The percentage of your labour costs for which you receive a subsidy is 90% of the percentage that your turnover drops. Some examples: if you have a 100% decrease in turnover, you will receive a subsidy of 90% of your labour costs. If your turnover drops by 50%, you will receive a subsidy of 45% of your labour costs.

After approval of your application, the UWV will make an advance payment of 80% of the expected subsidy available. This advance payment will be paid in three instalments. The aim is for the first payment to be made to you within 2-4 weeks of the application.

Wage costs
The subsidy amounts to a maximum of 90% of the total wage you’re paying. This wage contains the wage for social insurances (SV-loon) from current employment (e.g. no severance payments). In addition, a fixed surcharge of 30% on the wage is taken into account for all employer charges (e.g. employer's tax contributions, pension contributions, holiday allowance, etc.). The subsidy will therefore ultimately be based on 130% of the total wage.

Only wages up to twice the maximum monthly wage (€ 9,538 gross per month) are eligible. The wage that an employee receives above this limit therefore does not count towards the subsidy.

Please note: the salary paid to employees that are not compulsorily socially insured in the Netherlands, does not count towards the subsidy. Therefore, you cannot apply for a subsidy for this salary.

When applying for a subsidy, your wage costs in January 2020 (times three) will be taken into account. Your subsidy (and therefore your advance payment) will initially be based on these wage costs. When the subsidy is finally determined, the actual wage costs in the months March to May 2020 will be taken into account. If the actual wage costs in these months turn out to be lower, the subsidy will be set at a lower level. If the actual wage costs in these months turn out to be higher, no higher subsidy will be determined.

Condition 1: decrease in turnover by at least 20%
To calculate your turnover decline, you need to compare 25% of your revenue in 2019 with the expected revenue over three consecutive months in 2020. You may choose the starting month of this period, the options are: 1 March, 1 April or 1 May 2020. Any seasonal influences or growth ambitions have deliberately not been taken into account in order to keep the scheme as simple as possible.

If your company is part of a group of companies, the decrease in turnover must be calculated over the entire group.

If the (expected) decrease in turnover over the chosen three months is on average 20% or higher, you are eligible for the NOW-scheme.

Condition 2: Obligation to make an effort to maintain wage costs at the same level
As an employer, you have a best-efforts obligation to keep your wage costs in the months March to May 2020 as equal as possible to your wage costs in January 2020. If the wage costs in March to May 2020 are lower, a discount will be applied to your subsidy on this difference afterwards. In many cases, this discount is not proportional and can increase considerably. It is therefore advisable in most cases to continue paying on-call workers (at least the number of hours they were paid in January 2020), and to extend temporary employment contracts that expire in the coming months until at least the 1st of June 2020.

Condition 3: No application for dismissal for economic reasons
During the period for which you wish to apply for the subsidy, you may not apply to the UWV for dismissal for economic reasons. If you do, a discount will be applied to your subsidy that is always higher than the wage costs you would save if you’d dismiss the employee. Applying for dismissal at the UWV also takes a considerable amount of time (certainly in combination with the notice period you have to observe). So if you are eligible for the NOW-scheme, applying for dismissal for economic reasons is not wise in most cases.

Other terms and conditions

  • the subsidy provided may only be used to pay your wage costs;
  • at the end of the subsidy period, you provide final turnover figures with an auditor's report (an auditor's report will not be required for smaller applications, the definition of 'smaller applications' isn’t clear yet);
  • you inform your staff (whether or not via the workers’ council) about the grant;
  • you always file the payroll tax declaration in time, keep auditable records and provide insight into these records upon request up to 5 years after the date of grant determination;
  • if you receive a wage subsidy on the basis of the Participation Act, you must inform the body granting this subsidy if you receive a subsidy on the basis of the NOW.

When the subsidy is finally determined, you must provide a declaration that you have met these conditions.

Apply for subsidy
You can apply for the subsidy at the UWV. The necessary form will (probably) be made available on the 6th of April. The application can (for now) be submitted by 31 May at the latest. The date of application is irrelevant, as a subsidy can be applied for with retroactive effect to 1 March.

When applying, you must indicate the percentage of loss of turnover you expect, and in which continuous period of three months. You must also state your bank account number, which must be the same as the bank account number on which you receive payments from the tax authorities in respect of payroll taxes. If you have already submitted an application for temporarily unemployment, you must state the file number of this application with your subsidy application.

The subsidy application is linked to your payroll tax number. If you have more than one payroll tax number, you must submit an application for each payroll tax number.

Your (provisional) subsidy application will be granted or rejected within 13 weeks at the latest (the advance payment will be paid to you in the meantime). If you are granted a subsidy, you must request a definitive subsidy within 24 weeks after the end of the specified period. In doing so, you must submit the final turnover figures for the period in question, possibly add an auditor's report, and the statement that you have met all the other conditions (see above).

Finally, within 22 weeks of your request, a final decision will be made as to whether you qualify for the subsidy, and whether you may be required to pay back or receive a supplementary payment.

From Monday 6 April, our legal advisors will be ready to submit your subsidy application or support you with your application. No “eHerkenning” is required for this application. Feel free to contact our legal advisors or your regular contact person if we can assist you with your application.

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