With the Royal Decree of 12 December 2018, Belgium has solved the problem for the cross-border worker where the unemployment benefit does not match the Dutch pension. The new decision states that Belgian unemployment benefit for frontier workers does not stop at the age of 65 but continues until Dutch (foreign) pensions take effect. Because the Royal Decree has created some uncertainty in pension circles and among (near) pensioners, the most important facts are summarised here. Please note: this blog is written in Dutch.
Problem outline: emergence of income gap
According to European Regulation (EC) No 883/2004 of 29 April 2004 on the coordination of social security systems, with respect to workers residing in Belgium and working in a country bordering Belgium, such as the Netherlands, the country of employment is competent with respect to pensions, but the country of residence is competent with respect to unemployment. If this worker becomes unemployed, he is entitled to unemployment benefits in Belgium that end at age 65.[1] Only at a later age does he become eligible for AOW under Dutch law. In the intervening period, this frontier worker faces an income gap. This is caused by the different retirement ages for statutory pensions between the Netherlands and Belgium, and the lack of flexibilities.
Example
Someone was born in 1955 and has worked for a Dutch employer since 1974, but lives in Belgium and is a cross-border worker. As of 2019, he will be laid off at age 64. The cross-border worker is eligible for Belgian unemployment benefit, which ceases upon reaching age 65. The state pension does not start until 67 and 3 months, creating an income gap of 2 years and 3 months in any case.
Solution = Royal Decree dated December 12, 2018
The published Royal Decree[2] – effective retroactively on January 1, 2018 – seeks to provide a solution for this group of frontier workers. Under this decree, the worker can continue to receive unemployment benefits in Belgium after age 65 until he can claim a pension granted by or under a foreign law, such as the Dutch AOW.
However, the scope of the new decree is no longer limited to workers employed in the Netherlands, but is extended to persons employed in a country bordering Belgium. Furthermore, persons who live and work in Belgium but have lived and worked in another country for a long time in the past are not covered by this measure. This limitation of the circle of beneficiaries leads, according to the Council of State, to a twofold difference in treatment between categories of persons, and the RD – and the explanatory note given to it – contains no elements that can reasonably justify the distinction. [3]
Conditions of application
The revised provision disregards the age condition (i.e. 65 years) to remain entitled to Belgian unemployment benefits. Depending on the nature of unemployment, different conditions apply. For a temporary unemployed person, the following cumulative conditions apply[4]:
- The worker does not enjoy a pension within the meaning of Article 65 of Royal Decree of November 25, 1991 on unemployment regulations; Article 65 provides that the unemployed person who can claim a full pension cannot enjoy benefits;
- the worker applies for benefits as temporarily unemployed after the month in which his 65th birthday is located;[5]
- the temporary unemployment is not the result of a suspension of the performance of the employment contract due to force majeure caused by the employee’s disability.
The following cumulative conditions apply to the fully unemployed[6]:
- This is a worker claiming benefits as a fully unemployed person (either as a full-time or voluntary part-time worker)[7];
- the employee cannot claim a pension granted by or under a foreign law;[8]
- the employee was normally employed as a laborer, clerk or miner in a country bordering Belgium, and has maintained his main residence in Belgium, returning there in principle every day;
- the employee provides proof that, for an uninterrupted or uninterrupted period of at least 15 years, and while having his main residence in Belgium, he was bound by an employment contract with an employer based in the Netherlands.
If these conditions are met, the unemployed worker may continue to receive unemployment benefits beyond the age of 65, while for all other benefit recipients, the right to the said benefits ends upon reaching that age. Under the scheme, however, there is no choice after the age of 65, between pension or unemployment benefits.
Conclusion and remaining concrete problems
With the publication of the Royal Decree of December 12, 2018, the Belgian legislator seems to have complied with European case law. As of Jan. 1, 2018, it is possible for former cross-border workers to continue receiving unemployment benefits beyond the Belgian maximum age of 65, provided certain conditions are met.
Although the RD provides for the solution of a concrete problem for a targeted circle of persons, a number of elements remain uncertain; the sustainability of the limitation of the circle of entitled persons, the cumulation of old-age pension and unemployment benefits after 65 years of age, and the interpretation of the concept of “pension” in the sense of cumulation of Belgian unemployment benefits and foreign pensions. These problems require further Belgian guidelines clarifying the concrete implementation of unemployment benefits after 65 years of age when meeting the above-mentioned conditions.
[1] Based on the former text of article 64 of the Royal Decree of November 25, 1991 on the Unemployment Regulations, BS December 31, 2018.
[2] Royal Decree of December 12, 2018, amending Article 64 of the Royal Decree of November 25, 1991 on Unemployment Regulations, BS December 31, 2018.
[3] Royal Decree of December 12, 2018 published December 31, 2018, Opinion of the Council of State, para. 4.2.3.
[4] Pursuant to the amended Article 1(1) of Royal Decree of December 12, 2018 published on December 31, 2018. See the conditions stipulated in the RD, available at http://www.etaamb.be
[5] This condition, moreover, is contradictory to what is noted in the introduction to the RD, which states: “The worker will thus continue to receive unemployment benefits in Belgium after the age of 65 until he can claim his foreign pension rights.” However, the text of the Royal Decree prevails over the text of the introduction.
[6] Pursuant to amended Art. 1(2) of Royal Decree of December 12, 2018 published on December 31, 2018.
[7] More specifically, the worker is entitled to benefits as a wholly unemployed person in accordance with Articles 100 or 103 of the Royal Decree of November 25, 1991 on unemployment regulations. Art. 100 refers, on the one hand, to full-time workers in the case of full unemployment; on the other hand, Art. 103 refers to voluntary part-time workers in the case of full unemployment.
[8] More specifically, the employee cannot claim a pension within the meaning of Article 65 granted by or under a foreign law.