Social Security Contributions - Non-Labour Income
Retirement and survival pensions
Retirement and survival pension benefits for employees, both in the private and the public sector, are subject to a social insurance contribution for the funding of sickness and disability insurance. Computed on the gross pension benefit, this contribution amounts to 3.55% for employees in the private sector, 7.5% for statutory civil servants, and 1.5% for managers in the public sector. However, if the contribution brings the pension amount below a certain threshold, contributions are limited to the amount exceeding the threshold. Thresholds are reported in Table 12.1.
Table 12.1: Thresholds for contributions on pensions
|
Household situation/Year
|
2015
|
2016
|
2017
|
2018
|
2019
|
|
Pensioner without dependent family
|
1413.84
|
1442.08
|
1470.9
|
1470.9
|
1500.36
|
|
Pensioner with dependent family
|
1675.59
|
1709.07
|
1743.22
|
1743.22
|
1778.14
|
An additional (solidarity) contribution is withheld according to the following scheme (Table 12.2 and Table 12.3).
Table 12.2: Solidarity contributions on pensions (no dependent family)
|
Pension amount in €/month
|
Contribution
|
|
\(0.01\leq P \leq 2,594.45\)
|
\(0\)
|
|
\(2,594.46 \leq P \leq 2,674.68\)
|
\((P - 2,594.45) \times 0.5\)
|
|
\(2,674.69 \leq P \leq 2,873.57\)
|
\(P \times 0.015\)
|
|
\(2,873.58 \leq P \leq 2,903.51\)
|
\(43.10+(P-2,873,57) \times 0.5\)
|
|
\(P \gt 2,903.52\)
|
\(P \times 0.02\)
|
|
* Brackets and contributions for 2019.
|
Table 12.3: Solidarity contributions on pensions (with dependent family)
|
Pension amount in €/month
|
Contribution
|
|
\(0.01\leq P \leq 2,999.51\)
|
\(0\)
|
|
\(2,999.52 \leq P \leq 3,092.26\)
|
\((P - 2,999.51) \times 0.5\)
|
|
\(3,092.27 \leq P \leq 3,287.31\)
|
\(P \times 0.015\)
|
|
\(3,287.32 \leq P \leq 3,321.55\)
|
\(43.10+(P-3,287.31) \times 0.5\)
|
|
\(P \gt 3,321.56\)
|
\(P \times 0.02\)
|
|
* Brackets and contributions for 2019.
|
This solidarity contribution has the purpose to increase solidarity among pensioners (the rate is progressively increasing) and it is especially used to protect and preserve minimum pensions.
Conventional early retirement benefits
Although, strictly speaking, the early retirement benefit is an unemployment benefit (see Section 7.1.4), its treatment concerning social insurance contributions is more similar to that of pensions. A social insurance contribution of 3.5% is withheld by the employer on the part paid by the employer to fund the pension insurance, and a contribution of 1% or 3%, depending on the start date of the early retirement, is withheld by the unemployment office on the unemployment benefit. The 1% is for those whose early retirement started before 1997 and the 3% for those who retired early after 1997. Also for early retired, the pension cannot fall below certain thresholds, which depend on the presence of a dependent family. If it does, no contributions are due.
Disability benefits
On disability benefits received by wage earners a social insurance contribution of 3.5% is due to fund the pension insurance scheme. Again, the payment of such contribution may not have as a consequence that the benefits fall below a certain threshold. If so, contributions are limited to the amount exceeding the threshold. The thresholds (€/day) for beneficiaries with and without dependent family are summarized in the Table 12.4.
Table 12.4: Thresholds for contributions on disability benefits
|
Household situation/Year
|
2015
|
2016
|
2017
|
2018
|
2019
|
|
Beneficiary without dependent family
|
47.63
|
48.58
|
49.55
|
49.55
|
50.54
|
|
Beneficiary with dependent family
|
57.37
|
58.52
|
59.69
|
59.69
|
60.88
|
Contributions are not due on benefits for primary disablement (first year).
Unemployment benefits
The unemployed do not pay social insurance contributions.
Modelling Assumptions
Social security contributions on retirement pensions (Section 12.1) are coded within the calculation of pensions. Among former public sector employees, no distinction is made between statutory civil servants and managers, which should normally be subject to a different social security contribution rate of 1.5%. Therefore, the 7.5% rate use to compute retired statutory civil servants’ social security contributions is applied indistinctly to all former public sector employees.
To calculate the social contributions on work-related sickness and disease and occupational injuries benefits, we use the variable “Sickness benefits” as if it extensively includes work-related sickness/disease and occupational injuries.
Module output
|
Name
|
Description
|
|
t_ssc_nly_pens
|
amount of the social security contributions on pensions
|
|
t_ssc_nly_conv_erb
|
amount of the social security contributions on conventional early retirment benefits
|
|
t_ssc_nly_dis_ben
|
amount of the social security contributions on disability benefits
|
|
t_ssc_nly_work_sick_ben
|
amount of the social security contributions on work sick benefits
|
References
[] J. Derboven, Z. Rongé, S.
Van Houtven, et al. “EUROMOD COUNTRY REPORT, BELGIUM (BE) 2016 – 2019”.
In: n.d. (2019).
Chapter 12 Social Security Contributions - Non-Labour Income
12.1 Retirement and survival pensions
Retirement and survival pension benefits for employees, both in the private and the public sector, are subject to a social insurance contribution for the funding of sickness and disability insurance. Computed on the gross pension benefit, this contribution amounts to 3.55% for employees in the private sector, 7.5% for statutory civil servants, and 1.5% for managers in the public sector. However, if the contribution brings the pension amount below a certain threshold, contributions are limited to the amount exceeding the threshold54. Thresholds are reported in Table 12.1.
An additional (solidarity) contribution is withheld according to the following scheme (Table 12.2 and Table 12.3).
This solidarity contribution has the purpose to increase solidarity among pensioners (the rate is progressively increasing) and it is especially used to protect and preserve minimum pensions.
12.2 Conventional early retirement benefits
Although, strictly speaking, the early retirement benefit is an unemployment benefit (see Section 7.1.4), its treatment concerning social insurance contributions is more similar to that of pensions. A social insurance contribution of 3.5% is withheld by the employer on the part paid by the employer to fund the pension insurance, and a contribution of 1% or 3%, depending on the start date of the early retirement, is withheld by the unemployment office on the unemployment benefit. The 1% is for those whose early retirement started before 1997 and the 3% for those who retired early after 1997. Also for early retired, the pension cannot fall below certain thresholds, which depend on the presence of a dependent family. If it does, no contributions are due.
12.3 Disability benefits
On disability benefits received by wage earners a social insurance contribution of 3.5% is due to fund the pension insurance scheme. Again, the payment of such contribution may not have as a consequence that the benefits fall below a certain threshold. If so, contributions are limited to the amount exceeding the threshold. The thresholds (€/day) for beneficiaries with and without dependent family are summarized in the Table 12.4.
Contributions are not due on benefits for primary disablement (first year).
12.4 Benefits for work-related sickness and disease and occupational injuries
For occupational injury and disease, the percentage applicable is 13.07% on benefits for either permanent or temporary disablement, but no contribution is due on benefits for assistance by a third person.
12.5 Unemployment benefits
The unemployed do not pay social insurance contributions.
12.6 Modelling Assumptions
Social security contributions on retirement pensions (Section 12.1) are coded within the calculation of pensions. Among former public sector employees, no distinction is made between statutory civil servants and managers, which should normally be subject to a different social security contribution rate of 1.5%. Therefore, the 7.5% rate use to compute retired statutory civil servants’ social security contributions is applied indistinctly to all former public sector employees.
To calculate the social contributions on work-related sickness and disease and occupational injuries benefits, we use the variable “Sickness benefits” as if it extensively includes work-related sickness/disease and occupational injuries.
12.7 Module input
12.7.1 Variables
12.7.2 Parameters
12.8 Module output
12.9 References
[] J. Derboven, Z. Rongé, S. Van Houtven, et al. “EUROMOD COUNTRY REPORT, BELGIUM (BE) 2016 – 2019”. In: n.d. (2019).