The system of service vouchers needs more money, but who will pay?

Flemish Employment minister Jo Brouns says the next Flemish government should end the tax deductibility of service vouchers after the June elections. This is the last move in a battle about the financing of the vouchers, with widespread agreement that the system as it is today is not sustainable.

Service vouchers were introduced in Belgium in 2004 decades. They provide a subsidy for households to pay for domestic help, mostly cleaning. For one hour, each cheque costs 9 euros gross, and 7.20 euros after tax.

The goal of the government in setting up the system was twofold: eradicating the widespread practice of undeclared work in cleaning and offering regular jobs to low-skilled workers. By now, the system is mostly a subsidy for middle-class families. Cleaners tend to be women and mostly come from poorer eastern European or African countries.

In Flanders alone, some 750,000 families use the system, employing about 127,000 people. The Flemish budget allocates 1.3 billion euros on top of what families pay.

The present amount of money for the system is largely insufficient: employees say they are poorly paid and employers say their costs are higher than their income. Most of the specialised agencies are now loss-making and social conflicts are frequent in this sector.

For years, experts have been saying the system should be corrected. But politicians were afraid to do so: all parties want the votes of the large middle class and are wary of taking away benefits.

Employers and employees need more money, but the Flemish budget is unable to give it, says Brouns. He is, therefore, in favour of ending the tax deductibility of service vouchers. It remains to be seen if 1.80 euros extra per hour for users would be sufficient.

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