Covid-19 and the state pensions

19 May 2020
Subject Tax alert
Jurisdictions Belgium

In the fight against the coronavirus, retirees also do their bit. For example, retired nurses help in hospital wards facing many COVID-19 patients. They receive a salary for this work. However, can they combine this wage with their State pension? Other pensioners are adversely affected by the coronavirus. For example, they had to stop their independent activity. They receive a financial compensation for this. But what effect does this have on their State pension? And what about a pensioner who can no longer work as an employee and is put on temporary unemployment? All these questions are now answered by a law of 7 May 2020, which is published in the Belgian Official Gazette of 18 May 2020.

Retirees who are at least 65 years old or have completed a 45-year career can earn an unlimited amount of income. For example, they can accumulate the wages they receive as an employee with their State retirement pension. However, other retirees do not have this possibility. They may only receive a salary of up to EUR 8,393 per year (if they have no dependent children). If they earn more, their State retirement pension can be reduced or suspended. The same principle also applies to people who receive a survivor's pension. They can earn up to a maximum of EUR 19,542 per year (if they have no dependent children). These restrictions are now temporarily lifted for retirees who have started working or are working more hours in one of the key sectors or in the essential services (for example, in health, education, childcare etc.) from 1 March 2020 . For example, the retired nurse who comes to assist temporarily in a hospital will be able to receive her wages without having to worry about her State retirement pension.

For his part , the self-employed retiree can combine the special benefit he receives because he had to stop his self-employed activity because of the coronavirus, the so-called bridge right, with his/her State retirement pension. Reimbursements that are granted by the federal government, regions and communities and that must compensate for a loss of income or compensate for additional costs, such as the Flemish Corona hinderpremie, can also be combined with the State retirement pension. The same relaxations also apply to those who receive a survivor's pension.

Finally, the retired employee who is placed on temporary unemployment can also combine his unemployment benefit with his/her State retirement pension or his/her survivor's pension. It is also possible to receive the statutory sickness or disability benefit (for example, because one became ill due to the coronavirus while working as a pensioner), without this resulting in the loss of the State retirement pension or the survivor's pension. Normally, a person cannot receive a State retirement pension or a survivor's pension during the months that he/she receives unemployment or sickness or disability benefits. For retirees who have become ill or unemployed as of March 1, 2020 due to the coronavirus, this rule will be temporarily sidelined.

These relaxations are in principle valid until 30 June 2020. This period can be extended by Royal Decree.