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A minimum pension of EUR 1,500 net is probably not available and many people will never be able to claim the increased minimum amount. The new Minister of Pensions, Karine Lalieux (PS), will have a tough job selling the measure.
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An increase in the minimum pension to EUR 1,500 net was the great achievement with which the Socialists unpacked on Wednesday at the landing of the Vivaldi negotiations. More than half of the 2.2 million pensioners now have a lower pension and are therefore looking forward to a little extra. Two days later, the trophy turns out to sparkle a little less than first imagined.
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MR Chairman Georges-Louis Bouchez rang the bell to the cat. A minimum pension of 1,500 euros net? “That is not correct,” he declared in the French-speaking media. The French-speaking liberals point out that the minimum pension can increase with the allocated budget to a maximum of EUR 1,580 gross. Anyone who is a little familiar with the Belgian tax regime knows that he will not be left with a net 1,500 euros.
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Net promise difficult to substantiate
The problem with the socialists’ net promise is that it is difficult to substantiate. How much someone will be left with net from a gross pension depends to a large extent on his personal situation. The Pensions Service generally assumes in calculations that a pension of EUR 1,750 gross is required to keep EUR 1,500 net.
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To raise the minimum pensions to 1,500 euros net, 3 billion euros is needed, according to the Pension Service. If payback effects are taken into account, this is still 1.4 billion. By 2024, the De Croo government will release 1.2 billion, so too little to close the gap in the most optimistic case.
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The coalition agreement therefore states that the ‘minimum pension will be gradually increased towards € 1,500’. The word ‘direction’ is important here. In socialist circles it is admitted that raising minimum pensions to EUR 1,500 net will be difficult. ‘But we will be close,’ can be heard.
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Complex reality
The current minimum pension is 1,237 euros gross, so everything towards 1,500 euros is a nice progress. Only: reality is much more complex. That 1,500 euros is the minimum amount for a pensioner who has completed 45 career years. This includes years of work as well as periods of unemployment and illness. But even then, most retirees don’t get there and get less.
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After all, the minimum pension is compared to the length of the career. Anyone who has 30 years on the clock, and can therefore present two-thirds of a full 45-year career, is entitled to two-thirds of the minimum pension and soon therefore 1,000 euros. Today that is at least 825 euros. Again, this is a significant improvement, but many of those people have probably already dreamed of a minimum pension of EUR 1,500 and will never get there.
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Moreover, anyone who has worked less than 30 years is not entitled to the minimum pension. These are the very lowest pensions and they will not notice any improvement. In fact, the coalition agreement stipulates that the conditions for obtaining the minimum pension will be tightened. It is investigated whether the 30 career years required to receive the minimum pension should not include at least a specific number of years actually worked.
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“I wish a government that raises the minimum pension to 1,500 euros every success with communication,” he said pension expert Frank Vandenbroucke (sp.a) at the beginning of this year at De Tijd. Ironically, he is now a minister in that federal government. He can undoubtedly give his colleague Lalieux some advice.
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