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From 1 January 2020, the age limit for the Flemish target group reduction for older employees will be 58 years, but flexible transitional measures are foreseen.
The Flemish target group reduction for older employees consists of two parts: a ‘present’ employee reduction for all older employees and a recruitment reduction for older jobseekers. In both cases, the age limit will be increased on 1 January 2020 from 55 to 58 years.
For both types of reduction, transitional measures are provided for. They will be discussed below.
For both reductions, the employee must meet the following conditions:
For the (higher) recruitment reduction, the older employee must be younger than the statutory retirement age at the time of recruitment and be a non-working jobseeker.
The reduction for newly recruited over 58s who have not yet reached the statutory retirement age and who are registered with the VDAB (Flemish employment service) is not limited to a lump sum. The employer will be fully exempt from the basic contribution and the wage moderation contribution (in total, 25.00% on the gross wage) during the recruitment quarter and the following 7 quarters.
For recruitments as from 1 January 2020, the age condition is 58 instead of 55.
Jobseekers aged 55 and over who, in the event of recruitment until 31 December 2019, have been eligible for the reduction on the basis of the previous age condition, will not lose anything: their reduction will continue after 31 December 2019 until the period of 8 quarters has expired.
This reduction should promote the retention of older employees. As from 1 January 2020, the entry age will be 58 instead of 55 years.
age on the last day of the quarter
basic amount per quarter
number of quarters
58 to 59
€ 600,00
number of quarters of employment in this age group
from 60
€ 1,500,00
unlimited (up to and including quarter of termination of employment)
The new decree provides for a flexible transitional arrangement: persons who are at least 55 years old on 31 December 2019 can continue the reduction in 2020 and subsequent years or have it start from the age of 55, regardless of their recruitment date. In practice, this has a significant impact.
Some examples:
1.
Date of birth: 15 June 1964 Recruitment: 1 April 2020
The employee is 55 years old on 31 December 2019, so the transitional rule applies: he or she is entitled to a reduction from the age of 55, even in case of recruitment after 31 December 2019.
Reduction of € 600.00 from the second quarter of 2020 until the first quarter of 2024 and of € 1,500.00 from the second quarter of 2024.
2.
Date of birth: 15 March 1965 Recruitment: 1 April 2020
The employee is 54 years old on 31 December 2019, so the transitional rule does not apply: the reduction only applies from the quarter of the 58th birthday.
Reduction of € 600.00 from the first quarter of 2023 until the fourth quarter of 2024 and of € 1,500.00 from the first quarter of 2025.
3.
Date of birth: 5 March 1964 Recruitment: 1 July 2018
The employee is 55 years old on 31 December 2019, so the transitional rule applies: he or she continues to be entitled to a reduction from the age of 55 after 31 December 2019.
Reduction of € 600.00 from the first quarter of 2019 until the fourth quarter of 2023 and of € 1,500.00 from the first quarter of 2024.
Source: draft of the (Flemish) Decree containing provisions for the 2020 budget
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