For the first time, persons who make less than €2,500 gross per month will get a “work bonus” from the Flemish government. In order to achieve the target of an employment rate of 80%, it is necessary to make work more appealing than receiving unemployment benefits.
Employees in lower-paying positions in Belgium are occasionally paid so little for their labour that it equals the number of benefits that jobless persons are eligible for. Jo Brouns, the minister of employment in Flanders, is offering a bonus to individuals who are paid a lower income to make work more appealing.
“‘Sometimes the financial difference between unemployment benefits and a job is too small. With the job bonus, we want to encourage people to stay at work and to look for a job,” Brouns mentioned in the statement.
The Organisation for Economic Co-operation & Development (OECD) recently conducted research showing that gradually reducing social assistance to encourage jobless persons to find employment has little impact on lowering unemployment rates. On the other hand, raising salaries is thought to encourage people to find a job or stay employed by making it more financially advantageous.
The work bonus in Flanders will be given to more than 730,000 employees who make less than €2,500 gross per month. Brouns outlined the rules for who is eligible for the incentive along with Budget Minister Matthias Diependaele.
The amount of the employment bonus will decrease as the pay rises. The incentive is no longer available to anyone who makes more than €2,500 a month. The National Social Security Office provides data that the government utilizes to decide who is entitled to the bonus.
This declaration was made in response to unions’ calls for buying power protection, which Diependaele claimed the Flemish Government valued highly.
He stated, “With this proposal, we give up to €600 per year extra net wages to this category of earners. This boosts purchasing power while also motivating people to find jobs and stay at work.”