After a marathon round of talks that went on into the early hours of Monday morning the Flemish Government has reached an agreement on the budget for 2026. It wasn’t an easy task, as 1.5 billion euro needed to be found to keep the Flemish budget on track.
In order to find additional income, the Flemish Government has increased the so-called “Care Premium”, a flat rate annual fee that paid by residents of the 5 Flemish provinces. Income from the Care Premium is used to finance the “Care Budget” payments given to those that require of lot of assistances from care professionals.
Currently the Care Premium payment is 64 euro per annum or 32 euro per annum for those on low incomes. This will be increased to 100 euro and 35 euro per annum respectively.
Additional income has also been sought from road charging for heavy goods vehicles. By increasing the amount per kilometre these vehicles pay to use our roads the Flemish Government expects to find 180 million euro in additional revenue.
Cuts
A number of subsidies that are currently paid out by the Flemish authorities will be either reduced or scrapped. 70 million euro in cuts were already planned. This has now been increased to 210 million euro. In addition to this the Flemish Government will save an additional 90 million euro by not implementing measures that it had planned to implement during the course on next year.
The School Bonus is being scrapped. The payment, that is made on top of child benefit that in Flanders is called ‘Groeipakket’ (Growth Package), is currently between 23 and 70 euro per annum depending on the age of the child. Families on low incomes will continue to receive the School Bonus, other families will not. This will save the Flemish Government 50 million euro per annum.
Those on high incomes will no longer receive renovation grants and the 250-euro Refrigerator Cheque that those on low incomes could apply for will be scrapped.
Postponed
Some savings are being made by simply postponing measures that were to have been implemented next year. An example of this is the planned reform of inheritance tax.
Broader definition of income
The Flemish Government intends to try and prevent people with high incomes from receiving benefits, allowances or price reductions that are not intended for them. Nurseries for example determine their fees based on salary. Some people’s salary appears to be low and they are charged according for childcare.
However, they actually earn a lot of money through a management company simply pay themselves a low salary this in order to reduce their income tax burden and enjoy benefits intended for people that really are on low incomes. In future, Flemings will have to “declare on their honour” that they don’t earn more than what is on their monthly payslip. Random checks will be made to ensure that they are telling the truth.
Job Bonus
The annual Job Bonus payment to people on low incomes will remain in place during the coming years. The Flemish Government only intends to scrap it once the Federal Government has implemented measures that will compensate for this and that these measures start to have an impact.
The Flemish budget will be presented to the Flemish Parliament at 2pm on Monday when the Flemish Prime Minister Matthias Diependaele (nationalist) will make his September Declaration.