How claiming social assistance could impact your right of residence

Everaert Advocaten is a respected leader in Dutch immigration law. Based in Amsterdam, its multilingual team advises expats on residency and immigration-related legal issues.

The coronavirus pandemic is currently affecting most aspects of daily life. It will have a negative impact on the Dutch economy. The Netherlands has several schemes under which its citizens and legal residents can apply for social security benefits, in case of unemployment or incapacity to work.

The Dutch government has also made public funds available to provide temporary financial support for companies, entrepreneurs and freelancers during the coronavirus pandemic.

However, claiming assistance from public funds can jeopardise your right of residence in the Netherlands and may disqualify you from obtaining permanent residence in the future.

In this article, we will explain which public funds might be applicable during the pandemic and how claiming social assistance could impact the right of residence for highly skilled migrants, self-employed persons, family members, EU and UK nationals and permanent residents. Lastly, we will advise how you can secure a stronger right of residence.

COVID-19 and public funds

The following schemes are available:

Temporary Emergency Bridging Measure for Sustained Employment (NOW)

The NOW-scheme allows employers to claim a maximum of 90% of wages for a period of 3 months, depending on how much turnover is lost. It is possible to extend the compensation period for a further 3 months.

Extra Bbz support for self-employed professionals (Tozo)

Self-employed professionals who run a viable business can claim extra temporary financial support under the Tozo scheme if they are experiencing financial difficulties due to the pandemic. The support consists of income support (maximum of 1.500 euros net per month) for a maximum of three months and/or a loan for business capital (maximum of 10.157 euros net).

SME credit guarantee scheme (BMKB)

Small and medium-sized businesses (with no more than 250 employees) may qualify for a guarantee for part of a loan through the BMKB scheme, which has been extended to deal with the economic consequences of the pandemic. Under this scheme, the Ministry of Economic Affairs and Climate Policy stands as a guarantor. This will allow businesses to borrow more than would otherwise be possible. The guarantee covers up to 75% of the credit given by the financing party.

Compensation for entrepreneurs in affected sectors (TOGS)

The TOGS-scheme allows small and medium-sized businesses to claim a one-time, set compensation of 4.000 euros to mitigate the financial consequences of the necessary closing of their enterprise, restriction of meetings and/or the curtailment of travel.

Consequences for your right of residence

There may be some consequences when you apply for one of the schemes as an expat in the Netherlands:

Highly skilled migrants

As a highly skilled migrant, you are required to meet a salary threshold. While your employer may make use of the public funds that have been made available during the coronavirus pandemic, it is important that your salary stays above the threshold that applies to you.

If your salary is temporarily less than the threshold due to the pandemic, your employer will need to notify this change to the immigration authorities. This could have consequences for your residence permit. Although we do expect the Dutch immigration authorities to be lenient in their review of these notifications due to the exceptional and temporary nature of this situation, it is advised to be mindful of your salary and start a conversation with your HR representative if this situation applies to you.

In case of unemployment, highly skilled migrants have a three-month search period to find new employment as long as their permit is still valid. During this period, highly skilled migrants may be eligible for unemployment benefits. Claiming public funds under other social security schemes may jeopardise your legal residence.

Self-employed professionals

If you have a residence permit as an entrepreneur (including DAFT permit holders), you may be eligible to apply for temporary financial support under the Tozo scheme and the one-time compensation under the TOGS scheme and the loan under the BMKB scheme. 

The State Secretary of Justice and Security confirmed that a claim for financial support under the Tozo scheme – by means of exception – will not have any consequences for the right of residence of persons with a residence permit as an entrepreneur due to the temporary and exceptional nature of the scheme.

However, the Dutch immigration authorities have not yet provided guidance on whether claiming financial support under the TOGS-scheme and the BMKB scheme can jeopardise legal residence. 

For now, it is advised that self-employed residence permit holders refrain from applying for funds under the TOGS-scheme until the Dutch authorities have published a clear policy. 

Considering the aid under the BMKB scheme is in the form of a loan, it is not considered welfare and receiving aid under the BMKB scheme may therefore not jeopardise legal residence.

Family members

If you have a residence permit as a family member, you and your sponsor must meet income requirements, and a claim to public funds by either of you could jeopardise your legal residence.

Even if your sponsor is Dutch or has permanent residence in the Netherlands, a social security claim can have consequences for your residence right as their dependent.

While the State Secretary was clear about whether entrepreneur residence permit holders can claim financial support under the Tozo scheme, she omitted whether this exception applies to family members and their sponsors as well. While we do expect this to be the case, it is advised, for now, to refrain from claiming financial support under the Tozo and TOGS schemes for family members and their sponsors.

Claiming benefits for which premiums are paid, such as unemployment and sickness benefits, is however permitted for residence permit holders and their sponsors.

EU and UK nationals

As an EU (or UK) national residing in the Netherlands, you are required to have sufficient resources for yourself and your family members not to become an unreasonable burden on the social assistance system in the Netherlands.

Claiming benefits from public funds, such as social assistance or the special funds made available during the coronavirus pandemic, does not automatically constitute an unreasonable burden. The authorities will need to examine your personal circumstances and whether you are only temporarily experiencing financial difficulties.

Considering the fact that the coronavirus public funds are inherently temporary, a claim to them may not be considered an unreasonable burden.

Applying for a stronger right of residence

Permanent residents, EU long-term residents and Dutch nationals can claim public funds without it having consequences for their own legal residence in the Netherlands. This includes the public funds made available to help businesses and self-employed professionals alleviate the economic consequences of the coronavirus pandemic.

If you have been living in the Netherlands for five uninterrupted years and you have passed the civic integration exams, you may qualify for permanent residence or Dutch citizenship.

One of the requirements for permanent residence is that your income is sufficient, independent and sustainable. Your income may not be deemed independent if you have claimed benefits from public funds in the past.

Furthermore, your income may not be deemed sustainable if you do not have an employment contract at the time of application. During these times of uncertainty, it is important to make sure – sooner rather than later – that your right of legal residence is secure.

Do you want to know more about claiming public funds and how it might affect your residence permit, or do you need assistance in obtaining permanent residence or Dutch citizenship? Don't hesitate to contact Elles Besselsen and Danielle Snaathorst from Everaert Advocaten.