Don’t pay student years towards pension, says Gezinsbond

Summary

Flanders’ organisation representing families says to wait to consider paying fees to include years studied as years worked as the current regulation leaves too many questions

Could lose more than is gained

The Flemish family association Gezinsbond has advised its members to think carefully before taking advantage of a new regulation that allow people to increase their pension entitlement by paying a fee to include their student years as time worked. In many cases, the organisation said, the cost may outweigh the advantages.

The new arrangement comes into force on 1 June and allows employees and the self-employed to pay a sum to have their study years counted towards pension entitlements. However, economists for Gezinsbond calculated that for some people, the increased pension would push them into a higher tax bracket and deliver no net gain.

According to Gezinsbond’s family policy secretary, Manu Keirse (pictured), the problem affects some 322,000 people, mainly women who have worked part time and taken time off to have children. In some cases, he claims, paying off study years could actually lead to less pension earnings.

The organisation has an alternative proposal for the government to avoid such a tax situation. “With our formula, the regularisation of study years, working longer and indexation will benefit everyone, before and after tax,” Keirse said. “We hope soon to be able to present our argument to the ministers concerned.”

Photo courtesy Lannoo

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