Belgium's Pensions Minister Karine Lalieux (PS) detailed her planned reform of the country's pensions on Monday. If approved, the reform should reduce Belgium's budget deficit and allow the government to receive part of the EU's Covid-19 recovery package.
In an exceptional turn of events, the Federal Government had turned down the first payment of the EU's post-pandemic aid – worth €850 million. European leaders had asked Belgium to reduce the costs of their planned pension reform, which the government has chosen to renegotiate.
As a result, Karine Lalieux has unveiled her six-point plan for the reform to French-speaking newspaper Le Soir. Lalieux expects the reform to be approved by March at the latest.
What could change
Lalieux aims to reduce gender inequality in the labour market by including days off due to maternity leave to reach the minimum pension threshold of 30 years in working hours (or a 42-year-long career).
This alteration ties into the significant change that would now see the minimum pension no longer be calculated by age but rather by career length, the minimum of which will be 30 years in working hours. Belgium currently has a minimum pension age of 62; this will now be dropped so that only once an employee has carried out 42 working years will they be eligible for the state pension.
The reform also aims to address wealth inequality by scrapping the €2 per day bonus for those working beyond the retirement age. This has been heavily exploited by the country's wealthier workers and Belgium's highest 3 to 4% of pensions will now be subject to a progressive tax rate.
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Fourth, the reform will aim to harmonise pensions between the public and private sectors by limiting public servant pensions to 0,5% per year, as well as pushing their minimum pension age from 20 to 30 years of actual work.
Lalieux has asked employers to play their part in employing older staff. This would see any company that employs a below-average number of more experienced staff subject to a fine, that would fund the public pension fund. and will sanction any company that employs a below-average number of older workers, who have had over 42 years of work.
Finally, temporary retirement due to physical incapacity would be extended but with the aim of helping those who become unable to carry out one role retrain for another role.
The proposal has already received some negative responses from other parties and politicians, most notably in Flanders. The Flemish nationalist party N-VA and their Federal MP Wim Van der Donck stated that Lalieux’s reform seeks “to impose additional taxes on those who work or create work, especially in Flanders.”
Samy Mahdi of the Flemish CD&V (also a member party of the Federal Government), took particular umbrage with sanctioning companies that fail to employ workers over the age of 60.
Given that his party has recently decided to position itself as a defender of older Belgians, Mahdi stated that the idea was “a false good idea” which will only put “further strain” on older workers.
Aandacht voor 60+’ers juich ik toe, maar dit is zo’n fausse bonne idée @karinelalieux. Enkel bedoeld om weer extra te belasten.Respect voor 60+’ers bereik je niet via betuttelende quota en boetes. Pak discriminatie hard aan en beloon wie werkt. https://t.co/Fu0KaCRwzv — Sammy Mahdi (@SammyMahdi) February 13, 2023
Translation of tweet: "I applaud the attention to those over the age of 60 but this is a false good idea Karine Lalieux. This will only put further strain on them. Respect for people over 60 cannot be achieved through patronising quotas and fines. But instead by tackling discrimination and rewarding those who work."