Belgium has smallest income gap between working and not working in Europe

An unemployed single person who takes a job in Belgium sees their income increase by barely 6 per cent, according to new figures from the European data agency Eurostat. This makes the "unemployment trap" for a single person in Belgium the biggest in Europe. 

Unemployed people receiving government benefits may be discouraged from working because they can be worse off if their benefits are reduced or withdrawn, a situation known as the unemployment trap.

The trap means the change in disposable income is small and there is a strong disincentive to find work because of the tax and benefit systems. To calculate the gap, Eurostat looked at the difference in income for a single unemployed person and a single working person. The study showed that single people in Belgium who move from unemployment to working for low wages only see a 6 per cent increase in their income.

Additional costs

Only Luxembourg, where an unemployed person who starts working sees a 28 per cent increase in income, comes close. The situation in Belgium has worsened in recent years. In 2022, an unemployed person who started working saw a 7 per cent rise. In 2021, the figures was 9 per cent. The actual difference between working and not working may actually be even smaller, as Eurostat's calculation does not include the fact that those who work often have additional costs, such as childcare and transport.

The data concerns 2023. The federal government has recently raised the legal minimum gross wage, which should widen the gap between those receiving benefits and those receiving income from work.

Moreover, the unemployment trap also depends on the family composition and the wages a person earns. A dual-earner family without children, for example, is often a lot better off in Belgium.

For several political parties, employment is a top priority in their campaign for the June elections.



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