From 1 January 2017 the employer contribution in the event of early retirement (DECAVA) will be increased once more

Systems of bridging pension, in particular the ‘USCS’ (=system of unemployment with company supplement)) and the ‘USAA’ (=system of unemployment with additional allowances for older employees) will become more expensive for new rightholders from 1 January 2017. It is one of the measures to stimulate longer working included in the budget 2017.

System of unemployment with company supplement (‘USCS’)

‘USCS’ summarized

Older employees meeting the age and career conditions of the system of unemployment with company supplement (‘USCS’ – the former bridging pension scheme) are entitled to a special unemployment status and to an additional allowance paid by the last employer at the time of their dismissal.

On that additional allowance, a special employer contribution is due, expressed as a percentage of that supplement.  

Increased employer contribution from 1 January 2017

For the 'new' USCS meeting the following conditions:

• the notice or termination was notified on 01 November 2016 at the earliest
• AND the system of unemployment with company supplement begins on 01 January 2017 at the earliest

... the special employer contributions shall be determined as summarized in the tables below.

Profit sector

age at the beginning of the USCS	special employer contribution from 01.01.2017
percentage of the gross monthly amount of the additional allowance	minimum
< 52 years	No longer applicable	-
≥ 52 - < 55 years	142.50 %	€ 50.00
≥ 55 - < 58 years	75.00 %	€ 50.00
≥ 58 - < 60 years	75.00 %	€ 50.00
≥ 60 - < 62 years	37.50 %	€ 37.60
≥ 62 years	31.25 %	€ 37.60

The employer contribution for the profit sector shall be increased by a coefficient 1.20 compared to 2016, except for the age group from 62 years.

Additionally, the division into age groups shall be adapted to the new 'USCS' age limits:

• for the age group < 52 years, there shall no longer be a contribution for the simple reason that the 'USCS' at this age is no longer permitted;
• the age group between 60 and 62 years shall be grouped in a category with a higher contribution, now the legal age for the 'USCS' has been increased to 62 years (instead of 60 years previously)

Mind that for companies in difficulty or in restructuring lower percentages apply.

Because of the very complicated context, we will not discuss these cases in this infoflash.

Non-profit sector

age on the last day of the month	special employer contribution from 01.01.2017
percentage of the gross monthly amount of the supplement	minimum
< 52 years	No longer applicable	0
≥ 52 - < 55 years	48.11 %	0
≥ 55 - < 58 years	43.04 %	0
≥ 58 - < 60 years	27.86 %	0
≥ 60 - < 62 years	12.38 %	0
≥ 62 years	10.00 %	0

The employer contribution for the non-profit sector shall be increased by a coefficient 2.25 compared to 2016.

For the age group above 60 years, henceforth a contribution shall have to be paid (formerly exempted).

Additionally, here too, the division into age groups shall be adapted to the new 'USCS' age limits:

• for the age group < 52 years there shall no longer be a contribution, for the simple reason that the 'USCS' at this age is no longer permitted;
• the age group between 60 and 62 years shall be grouped in a category with a higher contribution, now the legal age for the 'USCS' has been increased to 62 years (instead of 60 years previously)

Additional allowances on top of certain social security benefits ('USAA')

'USAA' summarized

Are concerned: older employees who receive an unemployment or a time credit/career break benefit as well as a supplement paid by the (last) employer, without meeting the age and career conditions of the 'USCS'. In practice, the 'USAA' groups all systems formerly called 'pseudo-bridging pension' or 'Canada-dry'. On these additional allowances, once again, a special employer contribution is due, expressed as a percentage of these allowances.  

1. Additional allowance on top of unemployment

Increased employer contribution from 1 January 2017

For 'new' additional allowances on top of unemployment ('USAA') that meet the following conditions:

• the notice or termination was notified on 1 November 2016 at the earliest
• AND the unemployment begins on 1 January 2017 at the earliest

... the special employer contributions shall be determined as summarized in the tables below.

Profit sector

age at the beginning of the 'USAA'	special employer contribution from 01.01.2017 = percentage of the gross monthly amount of the additional allowance
< 52 years	150.00 %
≥ 52 - < 55 years	142.50 %
≥ 55 - < 58 years	75.00 %
≥ 58 - < 60 years	75.00 %
≥ 60 - < 62 years	58.24 %
≥ 62 years	48.53 %

The employer contribution for the profit sector shall be increased by a coefficient 1.20 compared to 2016, except for the age group from 62 years. 

The age group between 60 and 62 years shall be grouped in a category with a higher contribution, similar to the 'USCS'.  

Non-profit sector

age on the last day of the month	special employer contribution from 01.01.2017 = percentage of the gross monthly amount of the additional allowance
< 52 years	50.63 %
≥ 52 - < 55 years	48.11 %
≥ 55 - < 58 years	43.04 %
≥ 58 - < 60 years	27.86 %
≥ 60 - < 62 years	12.38 %
≥ 62 years	10.00 %

The employer contribution for the non-profit sector shall be increased by a coefficient 2.25 compared to 2016.

For the age group above 60 years, henceforth a contribution shall have to be paid (formerly exempted). 

The age group between 60 and 62 years shall be grouped in a category with a higher contribution, similar to the 'USCS'.  

2.   Additional allowance in the event of time credit

Employer contribution does not change

In this context, the employer contribution shall not be increased as from 1 January 2017 – the contribution remains at the level of 2016.

All sectors (profit and non-profit)

special employer contribution from 01.01.2017 = percentage of the gross monthly amount of the additional allowance
start ≥ 1 January 2017	48.53 %

Source: Belgian National Social Security Office - information subject to validation in (draft) texts regulation.

Author: Els Poelman

07/12/2016