New social measures in the Programme Law

The federal government approved the Programme Law on 20 December 2020 – and, at the same time, new social measures in 7 domains. The measures entered into force on 1 January 2021. We provide an overview.

Johannes Pannus, Manager BDO Legal

1. Exemption on payment of withholding tax for employees in training

Employers are partially exempted from payment of the withholding tax on wages of employees who have taken a training course. Under certain conditions, of course. The employee must have a length of service of at least 6 months, and the training must last at least 10 days during a period of 30 calendar days (for a full-time employee). Furthermore, the training must also meet specific criteria. Also read the article ‘Programme Law contains 7 new tax measures’.

2. Social security financing

The government has taken a number of measures to guarantee the budget for the various branches of social security. For instance, it provides for the retention of additional amounts arising from the professional withholding taxes and the withholding taxes on movable assets.

3. More birth leave days

Until the end of last year, birth leave, also known as paternity leave, was 10 working days. As from 1 January 2021, workers covered by the legislation will be entitled to 15 days. As from 1 January 2023, paternity leave will be increased to 20 working days.

As from 1 January 2021, employees who are new fathers are entitled to 15 days of birth leave.

4. Paternity and birth leave allowance for the self-employed extended

Just as with the extension of birth leave for employees, the financial allowance for the self-employed in the context of a birth is also being extended. The period covered of up to 10 working days was increased to 15 days (or 30 half days) as from 1 January 2021. As from 1 January 2023, this will be 20 working days (or 40 half days).

5. Higher bridging right benefit possible

By Royal Decree, the federal government can increase the benefit granted within the context of the bridging right for the self-employed who had to close their doors as a result of the COVID-19 crisis. This includes the self-employed who depend mainly on sectors subject to mandatory closure.

6. Higher guaranteed retirement pension

In order to guarantee pensioners a higher minimum income, the Programme Law provides for 4 increases that will take effect on 1 January 2021, 2022, 2023 and 2024, respectively. The minimum income will gradually increase by 2.58% in 2021 up to 10.75% in 2024.

7. Exceptional measures (supplementary) pensions and social security

With the law of 7 May 2020, the government took a number of exceptional support measures to combat the consequences of the COVID-19 pandemic. In view of the current health situation, the Programme Law extended or adjusted a number of measures relating to pensions, supplementary pensions, and other supplementary social security benefits. One example: employers are granted a postponement of the payment of contributions for the accrual of a supplementary pension and collective cover in the event of death, healthcare work incapacity or disability.