Self-employed workers face having to pay up to €195 a month to cover the risk of being unable to work under plans unveiled by the outgoing government.

Compulsory insurance for freelancers is one of the cornerstones of the government’s long-running pension reforms, but the idea has been criticised by many entrepreneurs as an expensive and intrusive burden.

The number of people whose own business is their main source of income has grown by 85% in 10 years, but only one in four is insured against work incapacity. Those who have insurance currently pay an average of €3,200 a year.

Under the plan by social affairs minister Karien van Gennip, self-employed workers who are unable to earn the minimum wage for longer than a year will be paid 70% of their former wages, up to the minimum wage level, until they retire.

Those who opt for private insurance would still have to register and ensure that their cover meets the government’s standards.

The plans were put out for public consultation on Tuesday via the government website Rijksoverheid.nl. The online consultation can be accessed via this link.

Van Gennip said the move was justified because the cost of independent workers who have to live on welfare support after becoming incapacitated was currently met by the taxpayer.

Safety net

Employees and companies have to pay into the unemployment insurance scheme operated by the UWV agency, which will also determine claims from self-insured workers.

Around 1.2 million people in the Netherlands are defined as ZZP’ers – independent business owners with no staff – accounting for 13% of the total workforce, according to the statistics agency CBS.

“This insurance cover means the self-employed can count on a basic safety net for work incapacity and people will no longer end up on welfare, with all the checks and the erosion of their capital reserves as a result,” the minister said.

But Roos Wouters, former chair of the Werkvereniging, which campaigned for better regulation for freelance and self-employed workers, said the plans were unrealistic and unworkable.

“The organisation that would have to operate this is already unable to deal with work incapacity for employees,” Wouters, who shut down the group last month in frustration at the lack of reforms to modernise working conditions, told BNR.

“The tax office doesn’t know who is self-employed and can’t monitor it. Several commissions have said this is too complicated and costs too much for too little. Moreover, self-employed workers don’t want it.”