In principle, a person may not benefit from both pension and professional income (or social allowances). This prohibition is applicable in each of the three pension schemes, i.e. for employees, the self-employed, and civil servants. Nevertheless, it has already been possible for several years to benefit simultaneously from pension and professional income, subject to strict limitations and under certain conditions. As of 1 January 2013, the Government had already softened this restrictive system. The Government has now decided to go a step further by issuing new rules applicable as of 1 January 2015.
More flexible rules in 2013 and 2014
As of 1 January 2013, two important changes had already been introduced:
1. The possibility to benefit, without limitations, from pension and professional income, subject to the cumulative condition of being 65 years old and being able to prove a professional career of a minimum of 42 years on the starting date of the pension (mixed career included).
If these two cumulative conditions were not complied with, a pensioner wishing to continue working after the starting date of his pension had to observe the legal income cap.
2. An increase in the income cap (subject to annual indexation) in excess of which the pension is suspended. When the income cap was exceeded by 25%, the pension was suspended in its entirety. Before this modification, the pension was already entirely suspended once the income cap had been exceeded by 15%.
Despite these more flexible rules, the possibility for a pensioner to benefit, with or without limitations, from both pension and professional income was still very restricted.
Moreover, the age and career conditions for benefiting from both pension and professional income without limitations (65 years old and 42 years of professional career) gave rise to opposition. Several motions for annulment have been filed with the Council of State ("Raad van Staat"/"Conseil d'Etat") for alleged violation of the principles of equality and non-discrimination. These actions are still pending today.
New rules as of 1 January 2015
In order to further encourage older workers to continue working and in order to reduce early retirement, two Royal Decrees of 18 January 2015 and 20 January 2015 have been adopted, for the self-employed and for employees respectively. The legislator intends soon to align the rules in the three pension schemes, and thus also for civil servants.
These Royal Decrees entered into force retroactively on 1 January 2015. They are applicable for the first time to professional income in 2015.
The two new measures are the following:
1. The possibility to benefit from both pension and professional income without limitations for:
pensioners older than 65 years (i.e. the statutory retirement age) as of 1 January of the year during which they reach this age, or
pensioners who have not reached the age of 65 but who can prove a professional career of 45 years according to the provisions regarding early retirement on the starting date of their first pension (i.e. the number of years of a "complete" career).
The age condition of 65 years is not required to be complied with at the moment of retirement. As a result, a person who retires at the age of 64 years will be able to benefit from professional income without limitations as of 1 January of the year during which he/she reaches the age of 65.
The existing rule that a pensioner who continues working after retiring does not acquire new pension entitlements remains in force.
In case of non-compliance with the aforementioned conditions, a pensioner who continues to work must observe the income cap.
The retired partner of a person benefiting from a pension at a "family rate" (i.e. when only one of the partner benefits from an income or when the other partner benefits from only a very limited income) must also observe the income cap.
2. Adaptation of the sanction when the income cap is exceeded: the suspension of the entire pension in case of the limits being exceeded by more than 25% is abolished. Henceforth, the pension is proportionally reduced taking into account the percentage by which the income cap is exceeded. Hence, for example, exceeding the income cap by 28% will result in a the pension being reduced proportionally by 28%.
Overview
(*) For the amounts, see: http://www.onprvp.fgov.be/FR/pension/working/limits/pages/default.aspx.
The newly adopted measures, which come in addition to other measures taken or still to be taken by the Government in the framework of the pension reform, certainly represent an important step forward.