Belgium's Parliament Approves Pension Reform and Program Law Featuring 'Centenindex'

Belgium's Chamber of Representatives has greenlit a program law, which includes the controversial 'centenindex,' and a pension reform. The legislation passed with a majority vote against opposition.

The program law introduces the government's budgetary measures, with the 'centenindex' being its most debated component. This measure will cap the indexation of gross wages at 4,000 euros and limit indexation for benefits and pensions to 2,000 euros gross, to be applied twice during the current legislative period. The law also includes other measures, such as increased excise duties on gas and heating oil starting in August, while electricity excise duties will decrease. The stock tax and aviation tax will also see increases.

With the program law's approval, the 'centenindex' could theoretically take effect as early as June, pending its publication in the Belgian State Gazette. The pension reform, also approved, aims to incentivize citizens to work longer. It introduces a bonus/malus system where early retirement without sufficient work history will result in a lower pension amount, while working beyond the legal retirement age will increase it. The reform also seeks to reduce differences between various pension systems.

Despite the government's assertion that the reform is necessary for pension affordability, it has faced significant protest. Critics argue the reform is discriminatory towards women, who are more likely than men to work part-time. The pension reform is scheduled to come into effect in 2027.