Belgium’s chance for a welfare system revision

Belgium’s chance for a welfare system revision

Like almost every European country, Belgium is facing declining trends of confirmed coronavirus cases. Its government is now looking for a balance between maintaining physical and mental health and restarting the economy. Nevertheless, Prime Minister Sophie Wilmes emphasized that even though the statistics are looking good, citizens must also remain careful, practice social distancing and – when possible – work from home. Belgium’s economic response included a series of tax reliefs relating to corporate income tax and individual income tax. In addition to that, social security authorities have implemented measures to reduce job losses. Those measures include extended deadlines for social security contributions and a guarantee of 70% continued salary. Those who are self-employed, and due to the corona virus are obliged to stop their work, can apply for a ‘replacement’ income. In addition, for regular workers, social security authorities are offering a supplementary sum to the employer, in addition to the continued salary, provided that the sum total (continued salary + supplement) will not be more than the regular salary. Businesses can benefit in various other ways from government support, such as extension of payment terms, loans, and other financial compensations, depending on the size and kind of business (start-up, small business, or big companies, amongst others).                                                                                             


Now that it seems that, at least in Europe, the first wave of the corona virus is coming to an end, we can have a moment of reflection. Despite government support for individuals as well as companies, a lot of people still fall outside government support systems. As a result, a large group of people is suddenly without a job and thus without a stable income, and for those who were already on the margins, the impact of the crisis is even greater. To put it simply, the economic consequences of the crisis show how many workers cannot survive after one month without income. Not to mention those on welfare benefits for whom it has not been worth looking for a job for years.

The virus has changed the way we think about fundamental economic questions and gives the Basic Income debate a new dimension. A basic income is an unconditional periodic cash payment to all on an individual basis. It disconnects the relation between labour and income that today, in Belgium as well as elsewhere, is still the leading principle. Of course, there is a difference between the short term economic measures required by the coronavirus crisis, and long-term social and economic legislation: but maybe the crisis can pave the way to a revision of the current restrictive social welfare system.


Bruegel datasets