‘Soft’ end-of-career job: allowance not subject to social security contributions

The premium that is granted to employees of at least 58 years to reduce their workload, is not subject to social security contributions.

Measures referred to

Reducing the workload must be carried out in the framework of:

• either a measure to switch from shift and night work to day work;
• either a measure to decrease the workload;
• either the transition from a full-time to a minimum 4/5 employment if the employee is aged 60 or more (if the age condition is not met, the premium will be subject to social security contributions).

Conditions to be met

If the following conditions are met, this allowance is exempt from social security contributions:

• The allowance has to be laid down in a sectoral collective labour agreement (CLA) or, failing that, in a company CLA or an amendment to the employment regulations;
• If CLA no. 104 applies to the employer (this CLA compels companies employing more than 20 employees on 2 January 2017 to draw up an employment plan for employees aged 45 and older (see our Infoflash of 15 February 2017)), this CLA or amendment to the employment regulations must be taken in the context of CLA no. 104;
• The CLA or amendment to the employment regulations explicitly specifies for which measures to reduce the workload the allowance may be granted;
• If the measure consists only of a transition from a full-time to a 4/5 employment, the employee must be at least 60 years of age;
• The allowance is paid by the employer or the Welfare Fund;
• The allowance (partially) compensates the loss of wages following the measure that was taken to reduce the workload of the employee concerned. So there must be a reduction in the income. However, the allowance may not exceed the amount of the loss of wages. The net wages of the employee may not be higher than before the reduction of the workload;
• The employee’s actual hours worked (Q/S) must be equal to at least a 4/5 employment after his workload has been reduced;
• This allowance is indexed according to the indexation mechanism that applies within the company. The amount thus obtained is rounded to the higher euro.

Entry into force

The exclusion of this allowance from the notion of remuneration at social security level entered into force retroactively on 1 January 2018.

Source: Royal Decree of 9 January 2018 amending article 19 of the Royal Decree of 28 November 1969 adopted in implementation of the Act of 27 June 1969 amending the Decree-Law of 28 December 1944 on social security for workers, Belgian Official Gazette of 25.01.2018.

Author: Anne Ghysels

20/02/2018