The Federal Government's proposed relaxation of the flexi-job system by may qualify as state aid, meaning it should therefore notify the European Commission.
According to the opinion of Belgium's Council of State on a draft law under review by Belgian MPs, the reform would breach EU law if the Commission was not properly notified, with possible penalties.
The flexi-job system, introduced in 2015 by the Michel government and continued by the De Croo government, was designed to allow retirees and those working at least four-fifths time to earn extra income.
Over the years, the system has been significantly expanded, and the government now plans to ease the rules further.
Under the proposed changes, the system would apply to all professional sectors unless a sector explicitly opposes it. Additionally, the income threshold for eligibility would rise from €12,000 to €18,000.
However, the Council of State has raised concerns about these changes. It considers the planned relaxation of flexi-jobs to be “state aid” under Article 107(1) of the Treaty on the Functioning of the European Union (TFEU).
Consequently, the draft system must, in principle, be notified to the European Commission unless an exemption applies.
The Council stated that it does not see how the conditions set out in EU state aid rules can or will be met by the draft text. It has cautioned the government about the implications of failing to notify such measures.
Open VLD members of the previous Belgian Government during a press conference on their proposals for flexi-jobs, on Monday 27 May 2024 in Blankenberge. Credit: Belga
A non-notified state aid is “completely illegal,” the Council warned, adding that courts are required to raise this issue even if it is not contested by the parties involved, and beneficiaries may be compelled to repay the aid.
Further objections concern potential discrimination within the same sector between regular workers and those employed under a flexi-job framework.
While such distinctions were upheld by the Constitutional Court when the system was first introduced, the Council of State now notes that circumstances have changed over the past decade.
The draft law proposes yet another increase in the tax exemption ceiling, which would further widen the gap in fiscal and social security treatment between flexi-job workers who are not pensioners and regular workers in the same sectors.
The Council stressed the need for an "adequate justification" for this growing disparity.
