Belgian Chamber Approves Pension Reform and Centenindex

In an overnight session on May 28-29, 2026, the Belgian Chamber of Representatives approved a comprehensive program law containing three major legislative pillars: a pension reform introducing a bonus-malus system, a controversial “centenindex” that caps wage indexation above certain thresholds, and federal energy support measures. The package represents the most significant legislative achievement to date for Prime Minister Bart De Wever’s Arizona coalition government, which took office in February 2025.

The Centenindex: A New Wage Indexation Mechanism

The most debated element of the program law is the centenindex, which limits automatic wage indexation twice during this legislature. Under the new rules, indexation is capped at the first €4,000 of gross monthly salary for wages, and at €2,000 gross for benefits and pensions. The first 2% of indexation above these thresholds is forfeited. According to VRT NWS, the measure can take effect from June 2026 if published in the Belgian Official Gazette before then, with a second application planned for January 2028.

The centenindex has drawn sharp criticism from trade unions and employers alike. ABVV President Bert Engelaar warned that “especially young workers, still far from retirement, will lose thousands of euros in purchasing power over their entire career,” as reported by Het Laatste Nieuws. VBO CEO Pieter Timmermans called the centenindex “essentially a flat tax increase to the detriment of companies.” ACV President Ann Vermorgen warned that “the stubborn adherence to a bad plan will cost the De Wever government dearly.”

Social partners had proposed an alternative that would have adjusted how energy prices are calculated in the index, but the government rejected it. Both MR and CD&V have expressed openness to revisiting the measure during upcoming budget negotiations.

Pension Reform: Bonus-Malus System Approved

The pension reform, set to take effect in 2027, introduces a bonus-malus system designed to incentivize longer careers. Under the new rules, those who retire early without at least 35 years of 156 days per year AND 7,020 total working days receive a reduced pension (2-5% per year early depending on birth year). Conversely, those who work beyond the legal retirement age and meet conditions receive an increased pension.

A new early retirement option allows workers to retire at 60 with 42 years of at least 234 effectively worked days. For civil servants, the pension calculation reference period expands from the last 10 years to the last 45 years by 2062, applying to those born in 1997 or later. The pension age for military personnel and NMBS rail staff has also been increased.

Minister of Pensions Jan Jambon (N-VA) defended the reform, stating: “We are doing this to keep pensions affordable,” as VRT NWS reported. Transitional measures provide that those born before 1966 face a maximum one-year delay, while those born in 1966 face a maximum two-year delay.

Both trade unions and the far-left PVDA party have announced plans to challenge the pension law before the Constitutional Court. PVDA MP Kim De Witte argued that “the reform not only lacks support in society, it also lacks a solid legal basis. On several points it clashes head-on with the Constitution.”

Federal Energy Support Package

The Chamber also approved €80 million in federal energy support measures, valid for three months starting May 2026. The package primarily targets employees commuting by car, providing fiscal incentives for employers to increase mileage allowances. As VRT NWS detailed, €15 million has been allocated to social funds for heating oil and gas assistance.

Budget Challenges Ahead

With the program law approved, the government now faces the search for at least €7 billion in additional savings. Prime Minister De Wever described this as “the largest consolidation since World War II,” acknowledging that “consolidating in this country is no walk in the park.” A budget conclave is expected, with an initial target of July 21 (Belgium’s National Holiday), though observers suggest this may be delayed to autumn. The monitoring committee meets on July 6.

Analysis and Implications

The approval of this package marks a pivotal moment for the Arizona coalition, which has governed since February 2025 after six months of negotiations. The government’s ability to push through these contentious measures demonstrates its legislative strength, but the widespread opposition from unions, employers, and even some coalition partners suggests significant political costs ahead.

The centenindex, in particular, has exposed fractures within the coalition itself. With less than one-third of voters in Flanders, Wallonia, and Brussels supporting the measure according to recent polls, and key coalition parties MR and CD&V signaling openness to revisiting it, the measure may face modification during the upcoming budget talks.

What to Watch For

The coming months will be critical for the De Wever government. The Constitutional Court challenges to both the pension reform and the centenindex could alter or delay implementation. The search for €7 billion in additional savings will test coalition cohesion, particularly as economic pressures from global energy markets and European fiscal rules intensify. The July 6 monitoring committee report and the subsequent budget conclave will reveal whether this coalition can sustain its ambitious reform agenda.