Reform social security contributions of self-employed persons by 2015

Bart Elias 3 May 2013


Since 1967, social security contributions for self-employed persons are payable based on the income earned three years previously. Last week, Minister Laruelle announced the reform of this calculation method by 2015.

1. The current system

In the current system, the contribution level for self-employed persons in the current year (N) is determined based on the income earned during a reference year (N-3) which means that there is not necessarily a balance between the amount of contributions paid in year N and the income earned that year. If a self-employed person had a flourishing business in 2010 but is earning much less in 2013 due to the economic downturn, he will have to pay contributions based on his much higher income of three years earlier. There is no possibility today to adapt the amount of the contributions based on current earnings.

2. The new ‘N to N system’

According to last week’s press release, a new system, the so-called ‘N to N system’, will introduce a calculation method whereby the contributions are calculated based on the income earned in the year itself. The report of the committee that carried out the preliminary work for this system reform, looked into three different possible calculation methods but the one that seems to be preferred by the Minister involves the payment of contributions based on the income earned in the year itself, but claimable by the social security fund based on the income of year N-3.

The self-employed person however can adapt the amount of the contributions claimed, based on the projection of his actual earnings in year N. If the earnings in year N will be higher than in year N-3, the self-employed person can increase his contribution level. Lower contributions can be paid – with up-front approval of the social security fund – if the earnings have dropped in year N compared to year N-3.

The Minister expects the new system to be implemented in the beginning of 2015 at the latest.

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