Belgium’s federal government is eager to delay top-ups linked to inflation by 2 months. Senior citizens' association Okra argues that as a result seniors on an average pension will lose almost 70 euros each time there is an index-related top-up. ‘Especially in residential care homes, the consequences are enormous,’ the association warns.
The recent Easter Agreement, a political agreement between the 5-way coalition partners, implements many of the reforms in the coalition agreement. On pensions, it emerged that the highest pensions will enjoy a smaller top-up than is currently the case.
Financial legislation currently going through parliament introducing measures contained in the Easter Agreement also means pensions and benefits will be topped up only 3 months after an index-related rise is triggered.
Losses of 70 euros
What does this delayed indexation mean in concrete terms? Now, pensions and benefits are still adjusted one month after the top-up is triggered by the price of a basket of goods and services. If the term now goes to 3 months, pensioners will miss out on 2 months of indexation.
"An average pension is 1,700 euros a month. A delay in indexation means that each pensioner loses almost 70 euros every time there is an index-linked top-up. Because of this delay, it also takes longer for purchasing power to be restored," says Okra's Herman Fonck.
The senior citizens' association slams what it calls a 'pure and simple saving measure on the backs of pensioners'. "We strongly protest against this measure. Delayed indexation is going to affect every pensioner."
Residential care homes in the eye of a storm
When an index-related top-up is triggered, residential care homes get an opportunity to index their day prices as well. These increased prices take effect 2 months later. It used to be one month after pensions were indexed.
‘That is an agreement we made last year with the Flemish government,’ explains Johan Staes of VLOZO, the federation of private residential care homes. That idea is now being thwarted by the federal government.
The new rule means day prices at residential care homes will rise one month before pensions are increased.
‘We would therefore like to ask the government to ensure that there is a pension increase first and only then an increase in the day price of residential care homes,’ Okra's Fonck stresses.
"Moreover, the Flemish and federal governments need to coordinate their policies better. Now a surprise is suddenly sprung upon us. There needs to be consultation," concludes Mr Staes.