Background
The Belgian social security system, as is the case in many other countries, can be traced back to solidarity mechanisms of the crafts and guilds. It was influenced by the Atlantic Charter and the French and British examples but is essentially a Bismarckian system where it is compulsory for people to be insured and people acquire rights by working. Just as in previous centuries, those who were not involved in the world of work had assistance to fall back on.
Since the end of the 19th century, social legislation and provisions have been introduced but the social security system in its current form - a system organised by the state and based on compulsory insurance - was established in 1945. It had already been planned before Belgium was completely liberated. Employers' and workers' representatives, who had frequently worked together during the occupation in a bid to protect workers or to commit sabotage, met to prepare how post-war Belgium would be organised. Their meeting led the draft Agreement on Social Solidarity to be signed on 19 August 1944. It was incorporated into the Decree on social security signed by Prince Karel, who was ruling at the time since his brother Leopold II was still imprisoned in Germany, on 28 December 1944 - the same day that Germany launched the Ardennes Offensive.
In the years following the war, the system was developed further. It was still some time after the Golden Sixties before people realised that the Western European economies were facing a structural crisis. So, the social partners continued to expand the system with generous provisions until it became clear that financing the system threatened to become problematic. In the second half of the 1970s, a series of innovative measures were introduced to promote employment and systems such as the pre-retirement pension system were set up. Since the 1980s, measures have been taken to limit expenditure.
Since then, the problem of the aging of the population has become increasingly apparent. The ever larger number of elderly people generates higher health care costs year after year. This development and the anticipated huge increase in spending on pensions as the baby boom generation retires, prompted the government to set up a reserve for the future called the Silver Fund.
Financing
The social security system is financed by contributions from employees and employers and subsidies from the state. The amounts are calculated based on the gross salary (basic salary plus bonuses, benefits in kind an so forth) and are paid to the National Office of Social Security (ONSS/RSZ). Employees contributions finance approximately 13% of the social security system. Employers' contributions account for over 34%.
Over the last few years, other sources of income - a percentage of the income from VAT - have also been used in order to reduce the contributions paid by the state and to ease the burden on employers so that labour becomes cheaper. Approximately 96% of this money is used to finance the system for salaried workers, the rest goes to systems for self-employed persons.
The social security system for self-employed persons has been around since 1967. Self-employed persons have to join a social insurance fund. They pay a contribution, which corresponds to a certain percentage of their net income. The insurance funds for self-employed persons are controlled by the National Institute for the Social Security of the Self-employed (RSVZ/INASTI).
In 2001, the government set up the Silver Fund in a bid to ensure that the social security system could continue to be financed in the future. The Silver Fund will be composed of budget surpluses and surpluses from the social security system. At the end of 2004, the Fund already contained almost 12 billion EUR, which corresponds to 4% of GDP. As from 2007, the budget will have a surplus that should amount to 1.5% by 2011.
Organisation and departments
Included within the social security system are the systems that provide replacement incomes in the event of unemployment, retirement or the inability to work, support for financing costs such as child support or health care and annual paid holidays. In fact, there are three systems: one each for salaried workers, civil servants and self-employed persons. For salaried workers, special regulations apply to certain professions.
For those who do not fall into one of these categories, various forms of social assistance are available: integration income (previously referred to as the subsistence minimum), guaranteed income for the elderly, guaranteed family benefits and disability benefits.
The Federal Minister for Social Affairs is responsible for all the benefits except unemployment compensation which falls within the remit of the Minister for Employment. In addition, some large organisations play an important role. The National Office of Social Security collects the contributions and divides up the funds between the various organisations that deal with the payment of benefits.
Family benefit
Child benefit is granted to salaried workers, self-employed persons and civil servants but the criteria for granting the benefits and the amounts differ. The benefit does not just comprise conventional child benefit but also a birth grant (paid at the earliest two months before the birth), an adoption allowance (paid in the case of adoption), an increased orphan's allowance and additional benefits.
There is also the guaranteed family benefit for those people who, for one reason or another, are not covered by the regulations for salaried workers, self-employed persons or civil servants.
Annual paid holiday
As far as holidays are concerned, there is a difference between workers and employees. The National Holiday Allowance Office (ONVA/RJV) provides holiday allowance for the former and the employer provides it for the latter. The number of days of paid holiday depends on the number of days worked during the previous year.
Health care
Workers have to join a health insurance scheme. The health insurance provided does not just cover the insured person but also any dependents (for example, children or an unemployed spouse). Virtually everyone is entitled to this insurance. Medical care is divided up into several categories and depending on the type of care, the cost is partially or fully refunded according to certain rates. Medication is also divided up into different categories.
There is a rule for self-employed persons according to which they are only insured for major risks. Those people who want to also be insured for minor risks can take out extra insurance with their health insurance scheme. In this case, the person is also partially reimbursed for consultations with doctors and specialists, certain dental treatments and so forth.
The contribution made by the individual towards the costs is referred to as the personal share. To make up for the increases in the personal share, the concept of maximum billing has been introduced. This provides a guarantee to patients that their annual expenditure for health care shall not exceed a certain limit, which is dependent on their income.
The reimbursement of medication and medical care is usually made at a later stage. The health care provider gives the insured person a certificate, which he/she must submit to his/her health insurance scheme in order to be reimbursed for the medical care provided. The person is reimbursed according to a rate which depends on the type of care, the health care provider and his/her personal status (widow(er), pensioner, older unemployed person, disabled).
The third party payment scheme is applied for care provided in hospital and for medication. In other words, the hospital only asks the patient to pay their personal share of the costs and collects the rest directly from the health insurance fund.
The same system is used for medication. The insured person presents the prescription to the pharmacist who only charges the client for their personal share. Some types of medication are free (usually those prescribed for serious or long-term illnesses) but for others, patients have to pay a certain percentage of the cost themselves, which is sometimes as much as 80%.
Work incapacity benefits
Workers who have been declared unfit to work as a result of illness receive a benefit. The majority of these people initially receive a guaranteed income paid by the employer, which is usually paid out for 14 days for workers and 30 days for employees.
After this period, they receive a work incapacity benefit, the amount of which varies depending on their previous salary and the duration of their incapacity to work.
For the first 30 days, the benefit represents 60% of their former income (with a ceiling). After the 30th day, single people and people with dependents continue to receive 60%, cohabiting couples only receive 55%. As from the first day of the seventh month, a minimum amount is paid that takes account of the person's family situation.
Self-employed persons who become ill receive a fixed sum.
Maternity and paternity
Women are entitled to a benefit during their maternity leave. For the first 30 days, the benefit represents 82% of their salary, after this time it amounts to 75% of the salary, subject to a ceiling. Women are entitled to 15 weeks maternity leave, eight of which must be taken after the birth and at least one week must be take before the date when the baby is due. When a child is born, the father has a right to 10 days paternity leave, seven of which are paid for by social security. These seven days are paid at 82% of the salary, subject to a ceiling. There is also a regulation for parental leave in the event of an adoption along with similar benefits.
Occupational illnesses
There is a list of disorders which are recognised as occupational illnesses and which entitle the person suffering from one the disorders to compensation. People who suffer from an illness not included on the list, must prove that there is an established and direct link between the illness and their work.
All workers and civil servants are insured against occupational illnesses, self-employed persons are not.
Accidents at work
Workers are covered by an insurance against accidents at work, which each employer is obliged to have. Not only incidents which occur at the workplace but also accidents which happen on the way to or from work are classed as accidents at work.
Self-employed persons are not insured against accidents at work. A separate rule applies to civil servants.
Unemployment
Workers who lose their job are entitled to unemployment benefit, but they must fulfil certain criteria: they must have worked a certain number of days within a reference period or a certain number of days that are deemed to be equivalent. The number of days depends of the age of the unemployed person. In principle, people who resign or are dismissed as a result of serious misconduct are not entitled to receive a benefit.
Young people who have just left school but have not yet found work also receive a limited benefit after a qualifying period.
Unemployment benefit is calculated on the basis of the previous salary but there is a ceiling (approximately ¿1,743 gross per month). Family situation is also take into account. The benefit has no time limit but long-term unemployed people may be excluded from the system if they do not make sufficient efforts to find work.
Cohabiting couples with dependents receive 60% of their previous salary (or of the maximum reference salary) for the entire time that they are unemployed. Single people receive 60% during the first year and 50% from the second year onwards. Cohabiting couples with no dependents receive 55% during the first year. The benefit is then reduced taking account of the number of years the person in question has already worked. The benefit can be reduced to 397 EUR.
Unemployment benefits are paid out by the benefit payment agencies: these are the unions for people who are members of a union and the Auxiliary Unemployment Benefits Fund for people who are not members of a union. Unemployment insurance is intended for workers. Self-employed persons who lose their job are not entitled to the benefit.
Temporary unemployment
There is also a benefit for temporary unemployment. Workers must have worked for a certain number of days to be eligible for the benefit. It is somewhat higher than the benefit for the full time unemployed. Cohabiting couples with dependents and single people both receive 65% of their previous salary.
Time credits
People who want to work less or stop work completely for a short period so that they can look after a sick person or spend more time with their children, for example, are able to do this under the time credits system. Workers can take a complete career break or work less hours for a certain period. It is possible to stop work completely or reduce working hours by half or a fifth.
During the break or reduction in working hours, the workers in question receive an interruption allowance. There are restrictions: in companies with less than 11 workers, the employer is not obliged to allow this sort of career break. In larger companies (unless the sector has decided otherwise), no more than 5% of the workers are allowed to be on a career break. There is a special regulation for workers over 50.
Pre-retirement pension
The pre-retirement pension is intended for older workers who have been laid off. In addition to their standard unemployment benefit they can also receive additional compensation. The pre-retirement pension made it possible for companies to lay off workers relatively easily. The fact that the pre-retirement pension eased the financial impacts of unemployment, often overcame most of the resistance to it. The aim was also that young people should be taken on to replace the older workers, however, for the most part, the system did not achieve the desired effect. The system was very expensive and had an extremely negative effect on the employment rate of older people. The system will now be scaled down as a result of the Generation Pact which has recently been set up.
Pensions
The retirement age is 65 for men and used to be 60 for women but it has gradually been increased over the last few years. By 2009, the retirement age for women will also be 65.
On average, workers retire at the age of 57 which means that many Belgians are included in a different 'retirement category' (early retirement, pre-retirement pension) before they reach the age of 65. They are entitled to a statutory pension but this is increasingly complemented with a supplementary pension. Individual and sectoral pension plans which have tax advantages for workers and are supervised by the government constitute the second pillar of the pension system. The third pillar is composed of pension schemes and individual life insurance.
Approximately 44% of the population has a pension scheme, which is a form of investment that enables people to build up capital in a fiscally advantageous manner by the time they retire. As regards the statutory retirement pension, people build up entitlements to this type of pension by working. There is also the survivors' pension which is granted to the spouse following the death of the person entitled to the pension.
The schemes differ depending on whether the retired person was a salaried employee, a self-employed person or a civil servant. For those people who have fallen into more than one of these categories during their career (for example, someone who was self-employed and also worked as a salaried employee), the rights acquired in the various systems are combined. The entitlements correspond to the number of years worked and the salary earned. Family situation is also taken into account. A ceiling applies to the salary used as a basis for calculating pensions. There is also a minimum pension. Workers with dependents receive 75% of their average salary for each year worked. Single people receive 60%. The ceiling for calculating pensions is approximately 39,000 EUR per year.
In 2004, state spending on pensions totalled 9.3% of GDP. This figure will increase to 12.3% by 2030. Self-employed persons can set up a supplementary pension either with social insurance funds or with private insurance companies.
International agreements
There are a number of international agreements in force pertaining to social security for Belgians abroad or foreign nationals in Belgium. The general principle is that workers are included in the system of the country where they work. This does not apply to posted workers.
Social Assistance
People who are not included in the social security system can be helped by social assistance. The objective of social assistance is to ensure that each person living in the country has the right to integration, which in essence means the provision of a minimum income. In this case too, a number of conditions need to be met in terms of the means of existence of the person in question, for example. Social assistance is the responsibility of the Social Assistance Centre (CPAS/OMCW), a body which is present in each municipality. The CPAS/OMCW helps people by providing them with an integration income or by helping them to find work. It also supports these people during their integration. People can also go to the CPAS/OMCW to seek help with debt management and legal problems. Guaranteed family benefits, guaranteed income for the elderly and disability benefits are also included under social assistance.
Disabled people receive an allowance in line with their age and level of disability. The parents of disabled children receive more child benefit if the child is at least two-thirds disabled. The benefit is paid until the disabled person is 21. Once they have reached this age, the disabled person themself receives an income replacement benefit if they can prove that their ability to earn an income is two-thirds lower than that of a non-disabled person. The disabled person receives an integration allowance if a medical examination shows that the person's independence is restricted (ability to move about, feed and look after themselves).
The SIS card
Belgians don't just have an identity card, they also have a social identity card, known as a SIS card. It looks just like a bank card and contains a person's individual number for the social security system. Each time the person has any contact with the organisations in the social security system, their card is read so that there is no confusion about the person's identity or their status within the system. The SIS card is also used by employers who have to pass on details about their employees to the social security system. The card must also be presented in pharmacies when a patient is picking up medication, at consultations, in hospitals, for reimbursements by the health insurance schemes and so on.
The central social security databank
A few years ago, a central social security databank was set up for the social security system. This databank has enabled administrative costs to be reduced since it brings together all data on insured persons in one single place. Each body in the social security system is able to consult the data. This marks a significant improvement since previously, employers and insured persons had to submit data, which they had perhaps already provided to other bodies, every time to each body. The data can also be consulted by other bodies provided that they have been granted access, for example transport companies that use social tariffs, health care providers and so on.
You can find more information on the Social Security website.
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