Pseudo-bridging pensions considerably more expensive as of now: the activation contribution

Pseudo-bridging pensions considerably more expensive as of now: the activation contribution

In an earlier newsletter we introduced you to the Summer Agreement and the Programme Act at the end of December 2017 which partially executed this agreement.

One of the measures that was implemented is the special activation contribution in case of exemption of performance. The government noticed that in case of reorganisations employers increasingly tended to give older employees exemption of performance until they reached pensionable age, whereby they continued to receive their pay wholly or partly, and thus got around the SWT (unemployment with company allowance) rules (the former bridging pension) and from 1 January 2018 will penalise such constructions by implementing an activation contribution.

Scope

The activation contribution is owed for every employee who has not worked for an entire quarter at the same employer, except when this fits in with a legal suspension ground of the execution of the contract of employment, such as illness or holiday. Exemption of performance during the period of notice is still possible as well.

The contribution is not owed for employees who entered into a mechanism of full exemption of performance before 28 September 2017.

Contribution

The activation contribution is a percentage based on the employee's age at the time he is exempted from performance. It concerns a (considerable) percentage of the pay that is paid during the period of exemption of performance, but with a minimum quarterly fee.

Age at the start Percentage on quarterly pay Minimum quarterly contribution
Up to the age of 55 20% EUR 300,00
Between 55 and 58 18% EUR 300,00
Between 58 and 60 16% EUR 300,00
Between 60 and 62 15% EUR 225,60
Older than 62 10% EUR 225,60

Exemption or reduction of the contribution in case of training

When an employee during the period of exemption of performance follows an obligatory training, the contribution will be exempted or decreased. The Programme Act determines which training courses come into consideration.

Training Influence on the contribution
Time Conditions of training Influence Period
During the first 4 trimesters of the period of exemption of performance

Obligatory training:

  • organised by the employer;
  • with a cost price of at least 20% of the gross wage that the employee earned annually, prior to the interruption
Exemption Full period of exemption of performance
During a random period of 4 consecutive trimesters, situated during the period of exemption of performance

Obligatory training:

  • organised by the employer;
  • which provides at least 15 days of training in this period of 4 consecutive trimesters
Reduction by 40% Only the period in question of 4 consecutive trimesters

Exemption on resumption of activity

When the employee commences at least a 1/3 employment with one or more other employer(s) or in the capacity of a self-employed person, and this for an entire quarter, the employer who owed the contribution is exempted from this, and this during the period of resumption of work.

1/3 employment refers to an average performance of 1/3 of a full-time equivalent, and this over a reference period of a quarter. The Social Security Office will add up all employments in 1 quarter and find out whether this corresponds with at least a 1/3 employment of a full-time equivalent during this period. A royal decree still needs to determine as to what will be understood with resumption of a new, at least 1/3 employment in the capacity of a self-employed person.

When the employee terminates the aforementioned activity, the contribution is owed again by the employer who exempted him from performance.

For more information about this specific subject, please contact Sébastien van Damme (author) and Sara Cockx (author and unit head).