What is a bread fund?
A bread fund is a collective of usually 20 to 50 entrepreneurs. Members agree to support each other financially in case of illness. Everyone puts money aside each month in their own account. This money stays yours. If a member falls ill, that person receives donations from the other members. The benefit runs for a maximum of two years. After that, support from the bread fund stops.
How does it work?
You join an existing group or set up a new group together. You choose in advance what monthly income you want to receive in case of illness. Based on this, you pay a fixed amount into your own bread fund account every month. If you become ill, there is usually a waiting period of one month. After that, you receive monthly donations from the other members. If you recover, the donations stop immediately. If the illness lasts longer than 2 years, the bread fund no longer pays out.
What does a bread fund cost per month?
At the gift level of €1,500 per month, Broodfonds states that a monthly contribution of €75 plus a €12.50 fee applies: a total of €87.50 per month. For a new group, you also pay a one-off registration fee of €225. For an existing group, the joining costs may vary. Checked on 14 September 2026 at Brood fund.
The deposit remains in your own account until donations are made from it; contributions and registration fees are something else. Therefore, do not compare this directly solely with the premium of an insurance policy. Choose a level that aligns with your income and the terms of participation.
Benefits of a bread fund
A bread fund can be attractive for self-employed people looking for a simple and affordable solution. The system is transparent and clear.
- No medical examination upon participation.
- Personal contributions and membership fees can be viewed separately.
- Support consists of donations; tax conditions remain important.
- Unused deposits remain yours as equity.
- You will be part of a network of entrepreneurs.
Disadvantages of a bread fund
A Broodfonds also has clear limitations. Consider these carefully when deciding whether to join.
- The benefit stops after a maximum of 2 years.
- You depend on the group and mutual trust.
- The monthly deposit is not tax deductible.
- There is no professional guidance for long-term illness.
- Not suitable as sole solution for permanent disability.
Brood fund and AOV: differences and overview
A bread fund and a disability insurance differ greatly in design, duration and tax treatment. The table below shows the main differences side by side.
| Brood fund | AOV |
|---|---|
| Mutual agreement between entrepreneurs | Insurance with an insurer |
| Benefit for up to 2 years | Benefit possible until retirement age |
| No medical examination | Health assessment according to acceptance criteria; not always a physical examination |
| Deposits not tax deductible | Premium for periodic payments deductible under certain conditions |
| Deposit plus contribution | Premium dependent on chosen cover |
| Based on trust within the group | Contractual rights established |
| No cover for permanent disability | Potentially long-term cover, depending on policy and expiry age |
Many self-employed professionals choose a combination. The bread fund covers the first period of illness. An AOV can pay out after that if you meet the policy conditions. Check whether the waiting period aligns with the maximum of two years of support and whether you can cover the first month and any differences in monthly income yourself. Compare the same desired income, the same waiting period and benefit duration.
Online gifting circles
An online gifting circle can have different participation, payment and support conditions than a local Broodfonds. Compare the maximum duration, required personal buffer and assistance during long-term illness for each scheme. The explanation and amounts for Broodfonds do not automatically apply to every other gifting circle.
Is bread fund tax deductible?
Money paid into your own Broodfonds account is not a deductible disability insurance premium. The balance remains private capital and is relevant to box 3. Gifts to other participants are not deductible in the same way as an AOV premium. Assess money received under the gift-tax rules, including your relationship with the donor and the total gifts received during the year. Check with the Dutch Tax and Customs Administration whether you need to file a gift tax return. A bread fund is therefore not necessarily tax-neutral. Keep bank statements, contributions, and received and paid donations separately.
