It seemed like the most fitting end to a horrific year for the healthcare workers of Belgium: a one-off payment of €985 in token of thanks of a grateful nation.
The reality was somewhat different: the premium was subject to the same tax and other deductions as any other income. Result: once the sum of €985 arrived in the workers’ bank accounts, it had been reduced by more than half.
“I was working in the Covid department during both the first and the second waves,” one nurse told the VRT.
“Normally I work normal hours, then suddenly it became all day long, weekends and holidays.”
Like most of her colleagues, she regarded the premium as more than justified, and at the same time welcome. Few members of the public will have seen it otherwise.
The sum of €985 was reserved for those who work full-time. Part-time workers receive a pro rata premium. For those who receive the full amount, the actual sum they have left after the government has swallowed up its share comes to €407.
“The premium is regarded as extra wages, on which social contributions and withholding tax have to be paid, and these are high in our country,” said Professor Michel Maus, expert on taxation at the VUB in Brussels.
It could have been done differently, says Maus. “The nuisance premiums for companies are tax-free, a political choice that has been ratified by parliament. The same could have been done for the [healthcare] premium.”
In effect, the taxation of the premium is a clawback advantage for the government. The more it gives out by generosity and tribute, the more it is able to claw back in tax, Maus said.
“Politicians are of course carefully calculating the gross amounts,” he said. The sensitive issue of a tribute to hard-working people lays bare yet again a sore point of the Belgian system.
“The high tax burden in our country is a bitter reality that international organisations have been pointing out for years,” he said.