Belgium approves controversial wage index reform and pension changes
Belgium’s federal parliament has approved a controversial package of budget measures, including the new “centenindex” system that will limit automatic wage and benefit increases for some workers and pensioners.
The measures were passed late on Thursday night after months of political debate and delays. The government says the reforms are needed to reduce Belgium’s budget deficit and keep pensions affordable in the long term.
For many expats and newcomers to Belgium, the most important change is the centenindex. Belgium normally links wages, pensions and benefits to inflation through an automatic indexation system. Under the new rules, future index-linked pay rises will be fully applied only to the first 4,000 euros of a gross monthly salary. For pensions and benefits, the limit is 2,000 euros gross per month.
The measure will apply twice during the current government term: once from June 2026 and again from 2028.
In practice, higher earners will still receive an index increase, but a smaller one on the part of their salary above the threshold. For example, a worker earning 5,000 euros gross per month would lose around 20 euros gross per month compared with a full indexation, according to HR specialist SD Worx.
The government hopes the reform will slow the growth of labour costs. Critics, however, describe it as a hidden “index jump” that weakens Belgium’s long-standing wage protection system.
The programme law also includes higher excise duties on gas and heating oil, lower duties on electricity, and increases to both the flight tax and the tax on investment accounts.
Parliament also approved a major pension reform. Workers who retire early without a long enough career record will receive a lower pension, while people who continue working beyond retirement age may receive a bonus. The reform will come into force in 2027.
In addition, MPs approved temporary federal energy support measures for the next three months, including incentives for employers to increase commuting reimbursements for staff who travel to work by car.
The centenindex could already take effect from Monday, 1 June, if the law is signed by the King and published in Belgium’s official state journal in time.
The reforms triggered mixed reactions from employers and trade unions. Business groups including VBO and Unizo supported the pension changes, calling them necessary to keep Belgium’s pension system financially sustainable. However, both organisations criticised the centenindex, describing it as a hidden tax increase and accusing the government of ignoring alternative proposals from employers and unions.
Trade unions strongly opposed the pension reform and say they plan to challenge the new law before Belgium’s Constitutional Court, arguing that it unfairly affects women, part-time workers and people with less stable careers.
Prime minister Bart De Wever © BELGA PHOTO JONAS ROOSENS