Protests over reform to benefits system

Belgian trade unions, unhappy with severe cuts in unemployment benefit introduced by the new Government that took office in November 2011, have organised protest demonstrations in Brussels. Unions want politicians to rethink the reforms, saying they will force many thousands of Belgian households into poverty. The government is adamant that its new unemployment benefit scales must be implemented. If there are no concessions, more protests are likely in the coming months.

Reforms spark protests

On 19 June 2012, 600 people took part in a demonstration in front of the headquarters of Belgium’s National Employment Office (ONEM/RVA) over reforms to the benefits system. The protest was organised jointly by the three Belgian unions, the Confederation of Christian Trade Unions (ACV/CSC), the Belgian General Federation of Labour (ABVV/ FGTB) and the Federation of Liberal Trade Unions of Belgium (ACLVB/CGSLB).

The aim was to denounce Government measures affecting young people and the labour market. New legislation will reduce the minimum levels of unemployment benefit and apply a tougher degressive system relating to how those benefits are paid.

Benefits will decrease to a maximum of €865 a month, which is less than was originally proposed, and the system will be even more degressive than before. The government’s main goal is to encourage unemployed people to find a job as soon as possible.

Table 1: Current levels of unemployment benefit (in €)
  Claim period Minimum per day Maximum per day Minimum per month Maximum per month

Cohabiting with children or other dependants

0–6 months

41.95

54.71

1,090.70

1,422.46

7–12 months

41.95

50.99

1,090.70

1,325.74

13 months onwards

41.95

47.65

1,090.70

1,238.90

Living alone

0–6 months

35.24

54.71

916.24

1,422.46

7–12 months

35.24

50.99

916.24

1,325.74

13 months onwards

35.24

42.73

916.24

1,110.98

Cohabiting, no dependants

0–6 months

26.42

54.71

686.92

1,422.46

7–12 months

26.42

50.99

686.92

1,325.74

13 months onwards

26.42

31.77

686.92

826.02

Source: National Office for Employment

Unions claim that more than 40,000 people and their families could falling into poverty and exclusion because of the new measures. They say this makes the new rules unacceptable.

According to Thierry Bodson, Secretary-General of the Walloon FGTB, the first decrease in unemployment benefits could come into effect from March 2013 and target those living alone with no children and heads of households.

He added that plans outlined by Employment Minister Monica De Coninck to tackle unemployment did not go far enough. Initiatives such as the creation of 10,000 internship places in companies for young unemployed people is insufficient, the union argues.

Despite the criticism, the plans were approved and were implemented on 1 November 2012.

Table 2: Government’s new four-step plan

Step

Description

Step 1

For the first 12 months of unemployment, the new rules initially slightly increase the amount of benefit paid. In this first year, there are three phases.

1) In the first three months, the allocation is 65% of the previous wage – up from the current rate of 65% – with a gross limit of €2,324 a month.

2) For the next three months, this decreases to 60%.

3) For the next six months the benefit remains at 60%, but the gross limit reduces to €2,166.

Step 2

At the end of the first step, if the unemployed person has not found a job, the second step begins. This step can be divided into three parts: 1) a fixed part, 2) a variable part, and 3) a variable part built on a complex degressivity mecanism.

1) During the two first months, the unemployed benefits are 60% of the gross amount for a cohabiting person with children or other dependants, 55% for people living alone and 40% for a cohabiting person up to a limit of €2064.81 per month.

2) For people who have already worked, they will receive for each year worked two extra months of benefits at the same percentage and at the same ceiling, up to a maximum of 10 months.

3) This phase can also be divided into a maximum of four periods of six months (maximum of 24 months). This complex mechanism will decrease the percentage (amount of benefits) after each of the four periods.

Step 3

Unemployment benefit is limited to 24 months, and to €1,209 for a cohabiting person with children or other dependants; €1,072 for those living alone; €757 for a cohabiting person.

Step 4

Unemployed people then receive a fixed rate of €1,090 per month for a cohabiting person with children or other dependants; €916 for those living alone; €484 for a cohabiting person.

Notes

Between the first and the fourth step, there is a decrease of 12% for a cohabiting person with children or other dependants; 17.5% for those living alone; 41.5% for a cohabiting person.

Pedro Rodriguez, ACV/CSC spokesperson for the unemployed, said the governmental measures were more likely to force families into poverty and into seeking help from Belgium’s social welfare system, rather than getting them back into work. The decrease in benefits would, he said:

…create a flow of transfers from the National Employment Office to the Public Centre for Social Welfare (OCMW), whereas what we are demanding is a flow from the National Employment Office to jobs in companies.

Unions urged the Employment Minister not go ahead with the plan, and to discuss it first with social partners. They argued that it would be more constructive to involve companies in the process than to increase poverty in Belgium, the cost of which would have to be met by taxpayers.

Pressure on Public Centres for Social Welfare

Every municipality has a Public Centre for Social Welfare, a public institution whose remit is to underpin Belgians’ constitutional right to social assistance and social integration. The centres provide cultural services, financial and medical help, advice on housing, legal issues and debt, and family mediation. The allocation of subsidies to the centres is complex and they do not receive the same level of support every year. However, the main contributors to the centres’ budgets are the federal, regional and local authorities, and they also receive income from such services as the delivery of meals and assisting the elderly at home.

Forcing the unemployed off unemployment benefit and onto the type of financial assistance offered by these centres is unacceptable to the unions. Their view is that federal institutions, through the federal-run National Employment Office, are trying to cut the unemployment rate by cutting the rate and duration of benefits. However, rather than finding work, the unions say that many of those who disappear from the official unemployment figures will have simply moved onto the locally funded assistance provided by the Public Centres for Social Welfare.

This will also increase pressure on the centres and the unions are concerned about funding, arguing that local authorities do not have the resources to provide financial help for the unemployed.

They fear poverty levels will increase in Belgium, and have called the unemployment reform ‘the hunting of unemployed people’.

Reaction of social partners

The reforms were discussed on television by social partners and members of parliament.

Pieter Timmermans, CEO of the Federation of Enterprises in Belgium (VOB) said:

The content of the reform already exists in other European countries. Those countries are not poorer with this system… The reform was necessary.

Liberal Member of Parliament Marie-Christine Marghem said:

This reform comes from the governmental agreement which was concluded in a very tight context, and for which all parties within the government have to be united.

Alain Mathot, Socialist Member of Parliament, said he did not agree with the current content of the reform, but added:

Parties wanted the reform. Today, they got it. So, it is not necessary to lay the blame on the Government. All members of each party should assume responsibility for it, today.

The Brussels General Secretary of the ABVV/FGTB, Philippe Van Muylder, said:

More than 150,000 people will lose 15% of their benefits and will live in poverty. We are in a society which is stigmatising and pointing the finger at the unemployed people, and this is unacceptable.

Commentary

The government says the law will not be changed, but the unions will not give up. Further demonstrations could occur over the coming months.

Michel Ajzen, Institut des Sciences du Travail, UCL

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