Exemption for social security in end of year indexation, urge francophone liberals

Exemption for social security in end of year indexation, urge francophone liberals
MR chairman Georges-Louis Bouchez. Credit: Belga.

Belgium is one of the few countries in Europe with a system of automatic indexation for employee pay in line with the rate of inflation; how this is handled is a continual topic of political debate, particularly in light of growing inflation rates.

This has prompted the francophone liberal MR party to propose that this year's final indexation does not apply to social security contributions – but will continue to be applied to employees' wages.

On Thursday morning, MR's leader Georges-Louis Bouchez told Le Soir and La Première (RTBF), "the state has the most to gain from automatic indexation."

"An 8% increase in inflation means that the state will collect €20 billion in business expenditures over the next two years," he continued.

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Therefore, the exemption, according to him, would allow the Federal Government to combat inflation and boost corporate competitiveness by financing a one-time €1.5 billion project that would deliver a billion to firms and 500 million to their employees.

This initiative is part of MR's larger plan for labour-market reform ("Jobs Deal II"), with an aim to achieve an 80% employment rate.

The various proposed measures include a €3,000 increase in the tax-free quota from €9,000 to €12,000, which is the level of the social integration income. The key idea is that a worker should not be taxed at all until they earn the equivalent of what a social welfare recipient receives.

In parallel, MR are calling for the gradual reduction of unemployment benefits as well as the exclusion from unemployment benefits of job seekers who, after at least two years of unemployment, refuse two jobs and/or two training courses in an underemployed sector.

Those suffering from long-term illnesses face new measures to ensure they must return to work. On the other hand, employers will also see increased tax deductibility for their companies when they train workers.

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