End of “without cause” time credit allowances and increase in age for “end of career” time credit as from 1 January 2015

Principles

The time credit system as established by CBA no.103 and the Royal Decree of 12 December 2001 provides for the right for employees in the private sector to temporarily interrupt their professional activity according to three models:

• The “without cause” time credit: total suspension of the contract or reduction to part-time work (1/2 or 4/5).
• The “with cause” time credit: in specific situations, total suspension of the contract or reduction to part-time work (1/2 or 4/5).
• The “end of career” time credit (older workers): reduction to part-time work (1/2 or 4/5) until retirement age.

Before 1 January 2015, these three models offered the possibility of benefiting from interruption allowances from the National Employment Office (ONEm/RVA) in order to compensate for the loss of salary.

As from 1 January 2015, the Royal Decree of 30 December 2014 has made it impossible to benefit from allowances for the “without cause” time credit; also, this “without cause” interruption is no longer taken into account when calculating the pension.

Nonetheless, allowances are maintained for the “with cause” time credit. In certain cases of time credit on compassionate grounds (such as care for a child under eight years old, care for a family member who is seriously ill and palliative care), the right to interruption allowances has been extended to 12 months. CBA no.103 still has to be adapted in this respect.

Regarding the “end of career” time credit, the age from which employees may benefit from interruption allowances has been raised to 60 (instead of 55) with a minimum of 25 years in a professional career when applying for time credit (by written request to the employer).

However, this age may be lowered to 55 under certain conditions (the company is undergoing a restructuring, long career, difficult job, etc.). This exemption age will be raised to 56 in 2016, 57 in 2017, 58 in 2018 and 60 in 2019, unless a national CBA provides for another term.

Entry into force

The new legislation concerning time credits is applicable to every first application for allowances starting after 31 December 2014, i.e.:

• Applications for allowances filed for the first time.
• Applications that are not a continuous extension under the same model of an allowance period ongoing as at 31 December 2014.

By way of derogation from this rule, the former legislation will still be applicable in certain particular cases.