Voluntary AOW insurance – When you live or work outside the Netherlands

The AOW is a national insurance scheme. This means that you will normally be compulsorily insured under this scheme if you live in the Netherlands. If you start living or working outside the Netherlands, you will normally cease to be compulsorily covered under these schemes. This will affect the amount of your AOW pension or Anw benefit. If you meet the conditions, you can continue these insurance programs on a voluntary basis.

Your compulsory insurance under the AOW scheme will normally end as soon as you start living or working outside the Netherlands. In that case, you can apply for voluntary AOW insurance. By taking out voluntary AOW insurance, you can ensure that you receive an AOW pension at an unreduced rate when you reach the pensionable age. A person can take out voluntary AOW insurance as from his or her 15th birthday. Certain conditions have to be met for participation in the AOW voluntary insurance scheme. You can only qualify if you:

• were compulsorily insured for at least one year immediately prior to the period of voluntary insurance,
• and you submit a written application for voluntary insurance to the SVB within 12 months of the compulsory insurance having ended,
• and you are aged 15 or over.

The cost of a voluntary AOW insurance

The cost of voluntary AOW insurance depends on your personal income. The term income here refers to your income from the Netherlands as well as from other countries.

Insofar as applicable, the voluntary AOW insurance contribution will be deducted from your:

• wages or salary;
• social security benefit(s);
• other periodic benefits and provisions;
• profit from enterprise;
• income from other activities (e.g. fees);
• taxable income from home ownership (notional rental value – eigenwoningforfait);
• income from temporary renting out of the accommodation.

Certain expenses are deductible for a voluntary AOW insurance, such as:

• social insurance contributions deducted from the salary;
• mortgage interest;
• annuity premiums;
• contributions to a scheme providing for a periodic benefit in case of sickness, incapacity or accident;
• child care expenses;
• personal expenses and obligations (donations, alimony, expenses relating to children under 30).

PEPP pension synchronization in the EU

The PEPP Regulation introduces a new type of voluntary personal pension product. The product will have the same features throughout the EU and may be sold by a wide range of providers, such as insurance companies, banks, occupational pension funds, investment firms and asset managers. An EU passport allows providers to sell PEPPs in different Member States.

The pan-European pension product is a new form of savings that enables people across the Union to supplement their state, corporate and national personal pension schemes. This allows consumers to voluntarily top up their pension savings, while at the same time enjoying solid protection. The PEPP will be transferable between Member States so that savers can continue to contribute to their PEPP when they move to another Member State.

Podcast about AOW insurance, own pension and life annuity

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