From 1 December, you can pay a contribution to have your student years included in the calculation of your future state pension. The scheme is different for employees, officials and self-employed persons.
The principle of a contribution to have student years included in the calculation of the state pension has existed for a long time, but has not been very popular so far. The scheme’s success was very limited as it was only available within 10 years of graduating and the contribution was quite high.
Minister Bacquelaine has wanted to review the existing scheme for quite some time. This review would ideally also lead to further gradual harmonisation of the 3 different systems.
The presented scheme proposes a fixed contribution of EUR 1,500 (subject to annual indexation) per successfully completed year of study in order to include these years in the calculation of the future state pension, regardless of the system a person is categorised in (employees, officials or self-employed persons). This fixed contribution applies only if the contribution is paid within 10 years of graduating.
Persons who completed their studies more than 10 years ago can also pay a contribution to include their student years in the calculation of their future pension, but for them the amount will be calculated on an actuarial basis and will therefore be higher.
In both cases, the paid contribution is deductible from personal income tax.
There is a transitional period available to everyone, regardless of the time of graduation. For persons who graduated more than 10 years ago, it is the only option with a fixed contribution (rather than an amount calculated on an actuarial basis). The scheme for employees and self-employed persons is different from the scheme for officials.
For a 3-year period starting from 1 December 2017, employees and self-employed persons can pay EUR 1,500 (subject to annual indexation) for each successfully completed study year (starting from 1 January of the 20th birthday) to include those years in the calculation of their future pension, regardless of when they graduated.
The scheme for officials during this transitional period is slightly different. Officials can pay a reduced contribution of EUR 1,275 (subject to indexation) to include any years of study not received free of charge under the qualifications bonus plan.
Until now, they were able to use the qualifications bonus plan for officials, which allowed them to include years of study in the pension calculation free of charge. They get to keep this free qualifications bonus for their careers until now, but the qualifications bonus will be abolished in the future.
For example: an official with a four-year qualification who has completed three quarters of his professional career can have three years of study included in the calculation of his future pension free of charge. One year will no longer be free of charge, but he will be able to include it in his future pension calculation for EUR 1,275.
It is important to understand that including years of study in the pension calculation will never allow anyone to retire earlier. The inclusion of these years in the pension calculation will never increase the actual qualifying years, but will increase the monthly statutory pension.
How much the statutory pension will increase by depends on the system the person is categorised in:
- When employees or self-employed persons have their years of study included in their future pension calculation, their statutory pension will increase by an estimated gross annual amount of EUR 266.67 for single people and EUR 333.33 for family pensions, regardless of their earned income at retirement.
- However, for officials the actual income level during the final 10 professional years (or in certain cases the final 5 years) will be taken into account. This means that including years of study in the pension calculation may turn out to be considerably more beneficial for officials than for employees or self-employed persons.
The above plan will come into effect on 1 December 2017. Years of study can be included in the pension calculation for statutory pensions starting on 1 December 2018 or later.