The government intends to abolish two compensation schemes for the transition payment on 1 January 2027: the compensation for dismissal after long-term incapacity for work, and the compensation for business closure due to the employer’s retirement or death. The transition payment itself remains in place. So what disappears is not the employee’s right to that payment, but the reimbursement the government currently pays to the employer. Please note: this is a proposed change that is not yet final.
This article was updated in April 2026. At that time the legislation is not yet final: the bill must first be passed by the House of Representatives and the Senate. Always check the current status with the official source before making decisions. In this article you will read what changes, what stays, what is still unclear and which steps you as an employer can already take.
What exactly changes in 2027?
At present, an employer can reclaim the paid transition payment from the UWV when dismissing a long-term ill employee. The same compensation exists when a small business closes because the employer retires or passes away. The government intends to abolish both schemes on 1 January 2027. As a reason, the government cites the contribution to sustainable public finances.
The government indicates that after the abolition the compensation will be limited to small employers. What exactly counts as a small employer, and what remains for that group, has not yet been worked out in the official communications. This means you cannot draw firm conclusions on this point yet. We explicitly flag this further on as an open question.
Important to remember: this concerns the abolition of the compensation, not the end of the payment itself. For the employee who is dismissed after two years of illness, the right to a payment does not change.
The transition payment itself remains in place
The transition payment will continue to exist after 2027. A long-term ill employee who is dismissed or whose contract is not renewed keeps the right to this payment. What disappears is solely the financial contribution from the government to the employer. You can read more about how it is built up and its amount in the article on the transition payment during second-track reintegration.
For employers this is the key point. The cost item remains, but the option to recover those costs from the UWV disappears in the proposed plans. As a result, after 2027 the payment following a long-term illness track will presumably fall entirely to the employer. That makes a well-documented sickness and reintegration file all the more important.
What does this mean for employers?
The biggest change is on the cost side of long-term absence. Where you now recover part of the paid transition payment, that would fall away after the effective date for employers who do not fall under the exception still to be determined. It therefore pays to look closely now at how you keep track of and control the costs of a sick employee.
A second point of attention is the reintegration track itself. Precisely because a file will carry more weight, a timely and careful second-track reintegration process is important. A file that is demonstrably in order prevents a wage sanction and keeps the options open, whether it concerns a return to work or a proper conclusion of the employment. When dismissal after two years of illness comes into view, it helps to know when you may dismiss a sick employee.
If you want to know how to set up the sickness and reintegration process in practice, take a look at our page on second-track reintegration for employers. There you will read how to stay in control and which steps come up at which moment.
Can you still claim compensation under the current scheme?
As long as the law has not been changed, the current scheme applies. Anyone who now dismisses a long-term ill employee and pays the transition payment can still claim the compensation from the UWV under the existing rules. Keep an eye on the application deadline, as the claim must be submitted on time after the payment has been made.
The precise conditions, deadlines and steps of the application are described in the article on the compensation for the transition payment in cases of long-term incapacity for work. Because the plans may lead to a different situation after 2027, it is wise not to delay ongoing cases unnecessarily and to check the current conditions carefully.
What is still unclear?
Because the legislation is not yet final, several points remain open. We name them deliberately, rather than filling in detail that does not yet exist:
- The effective date. The government aims for 1 January 2027, but the House of Representatives and the Senate still have to pass the bill. The date may therefore still change.
- The definition of a small employer. The government mentions a limitation to small employers, but what exactly falls under this has not yet been worked out.
- What remains for small employers. The precise content of a possible exception is also not yet known.
- Transitional rules and amounts. The official source names no concrete transitional rules or amounts. There is therefore no certainty on this point yet.
Take these points along as matters to watch, not as established facts. Once the law has been passed, it will become clear what exactly changes and from when.
The official sources
Because this is a time-sensitive topic and the legislation is not yet final, we refer to the official sources. Check there for the most up-to-date state of affairs:
- Ondernemersplein: compensation transition payment only for small employers
- Rijksoverheid: compensation schemes for the transition payment to disappear
Frequently asked questions
Will the transition payment itself disappear in 2027? No. The transition payment remains in place. A long-term ill employee who is dismissed keeps the right to a transition payment. Only the compensation that the government currently pays to the employer is what the government wants to abolish.
Is the abolition already certain? No. This is a proposed change. The bill still has to pass through the House of Representatives and the Senate. The effective date of 1 January 2027 is therefore not yet final.
Which two schemes are being abolished? The compensation for the transition payment on dismissal after long-term incapacity for work, and the compensation for business closure due to the employer’s retirement or death.
Can I still claim compensation now? As long as the law has not been changed, the current scheme applies and you can still claim the compensation after payment of the transition payment. Mind the application deadline and check the current conditions with the UWV.
What does this mean for me as an employer? The payment remains a cost item, but the option to reclaim it falls away in the plans for employers who do not fall under the exception still to be determined. A well-documented reintegration file therefore becomes even more important.
Questions about your situation?
Care4Careers has been supporting employers with absence and reintegration for more than thirty years, from a timely second track to a careful conclusion of the employment. We keep an eye on the legal frameworks and translate them to your situation.
Request a no-obligation advisory meeting and we will look together at how to deal smartly with the costs of long-term absence now.