Belgium Votes on Landmark Pension and Indexation Reforms

Belgium’s Chamber of Representatives faces a decisive vote on Thursday on two of the most consequential reforms of the De Wever government: the “centenindex” — a capped wage indexation system — and a sweeping pension overhaul. After months of parliamentary delays orchestrated by the opposition, both measures are expected to secure approval, marking a major political milestone for the five-party Arizona coalition.

According to Het Laatste Nieuws, the votes represent “D-day” for Prime Minister Bart De Wever’s government, with the program law — containing the centenindex — and the pension law both heading toward final passage.

What Is the Centenindex?

The centenindex marks the first major departure from Belgium’s comprehensive automatic wage indexation system, one of Europe’s most generous. Under the new rules, workers earning more than €4,000 per month gross — or receiving more than €2,000 in pensions or benefits — will face capped indexation on earnings above those thresholds. The first 2 percent of indexation above the threshold is forfeited. If inflation runs at 3 percent, for example, wages below €4,000 are fully indexed, but earnings above that level receive only 1 percent.

The measure will be applied twice: in 2026 and again in 2028. Labor economist Prof. Stijn Baert of Ghent University noted that workers earning just above the threshold will feel little impact, but acknowledged that “whoever touches wages, touches people.” Ann Vermorgen of the ACV union warned that more than half of all workers will lose out twice under the reform.

The government aims to implement the centenindex as early as June 1, though this depends on publication in the Belgian Official Gazette (Staatsblad). If the deadline is missed, implementation could be delayed by a month, with significant budgetary consequences.

Pension Reform: Bonus-Malus System

The pension reform introduces a bonus-malus system designed to incentivize longer careers. Workers who accumulate more years of service will receive higher pensions, while those retiring with insufficient years face reductions. The definition of a working year is raised from 104 to 156 days, effectively requiring more part-time work to count as a full career year.

Civil service pensions face significant changes, with the perequation mechanism — which allowed public sector pensions to rise above indexation — being scrapped. Retirement ages for NMBS railway staff and military personnel, who could previously retire as early as 55 or 56, will increase by one year annually starting in 2027 until they reach the statutory retirement age.

Tax Increases and Timeline

Beyond the centenindex and pension changes, the program law includes several tax increases. Gas bills will rise by approximately €75 per year, and heating oil by €6 per 1,000 liters, effective August 1. Bank taxes, flight taxes, and securities taxes will increase from January 2027.

The government had postponed the energy tax increases due to the Iran conflict, which pushed Belgian inflation from 1.6 percent to 4.01 percent. May inflation stands at 4.1 percent — double the European Central Bank’s target — though the crucial “spilindex” threshold was not exceeded in May and is expected to be breached in June.

Political Context and Opposition

The reforms faced months of parliamentary delays. The opposition filed amendments requiring review by the Council of State, a tactic available with the support of 50 of 150 MPs. At times, government coalition parties also struggled to muster sufficient attendance for debates, prompting opposition walkouts.

Kurt Moons of Vlaams Belang called the centenindex “a tax on labor,” arguing that De Wever stands increasingly isolated, with only socialist Vice-Premier Frank Vandenbroucke as a reliable ally. CD&V’s Sammy Mahdi has been critical of the reforms but is expected to vote in favor, while MR’s Georges-Louis Bouchez remains open to future adjustments.

Employers’ organization UNIZO warned that if negotiated agreements between social partners can no longer form a solid basis for policy, the result could be “social and economic chaos.” The government previously rejected an alternative proposal from the Group of Ten social partners that would have excluded gas and electricity from the index calculation, saving an estimated €100–133 million per year.

What to Watch For

The immediate question is whether the centenindex can be published in the Staatsblad in time for a June 1 implementation. If the spilindex is exceeded in June before the centenindex takes effect, the government would be required to fully index all public sector wages and benefits from September, undermining the budgetary savings the reform was designed to achieve.

Longer term, the reforms represent a critical test for the De Wever coalition, which has shown public divisions throughout the legislative process. The precedent set by capping indexation could open the door to further dismantling of Belgium’s automatic wage adjustment system, with significant implications for the country’s social dialogue model.

The outcome of Thursday’s vote will determine not only the financial future of millions of Belgian citizens but also the political trajectory of a government that has staked its credibility on delivering these landmark reforms.