Belgium Passes 2026 Law on Salaries, Pensions and Energy
The Belgian Chamber of Representatives adopted the Arizona coalition’s programme law in a marathon plenary session overnight from Thursday to Friday, approving sweeping changes to salaries, pensions, energy taxation, and air travel costs. The legislation, passed majority against opposition, translates the 2026 budget into concrete measures affecting millions of Belgians.
Context: A Chaotic Parliamentary Journey
Belgium began 2026 under provisional twelfths (douzièmes provisoires) after the government failed to reach a timely budget agreement, a period that ended on 1 April when the formal budget was adopted. The programme law, however, followed a far more turbulent path. Presented in parliamentary committee in early March, the bill endured second readings and multiple referrals to the Council of State before its final adoption, as DHnet reported.
Capped Wage Indexation: The Most Controversial Measure
The most contentious element of the programme law is the “index en centimes” — a capped indexation mechanism that limits automatic wage adjustments. Starting 1 June 2026, salaries will only be indexed on the first €4,000 gross per month in 2026 and 2028. Pensions and social allowances face a lower cap of €2,000 gross.
Prime Minister Bart De Wever described the measure as a “correction sociale” (social correction), explaining: “If you earn €4,000, you get indexation on €4,000. If you earn €5,000, you also get indexation on €4,000. Everyone receives indexation. Those fortunate enough to earn a good salary will receive slightly less,” as RTBF reported.
Frank Vandenbroucke, Minister of Social Affairs (Vooruit), called it “an exceptional solidarity effort,” while Deputy Prime Minister Maxime Prévot (Les Engagés) framed it as a “global temperance of indexation,” noting that half the savings go to employers to boost competitiveness “at a time when we face pressure from unfair Chinese competition and the American tariff war.”
Approximately half of Belgian workers — those earning below the median of €3,728 — will not be affected. For higher earners, the impact is modest but tangible: a €5,000/month salary with 2% inflation loses roughly €8.79 net per month (€110/year), while a €7,000/month salary loses about €331/year.
Pension Reform: Malus, Bonus, and Longer Careers
The same night, parliament adopted a comprehensive pension reform — one of the Arizona coalition’s flagship projects. The most significant change introduces a “malus pension” for individuals who have not worked at least 156 days per year for at least 35 years, with five days of flexibility tolerated across a career. Conversely, a “bonus pension” offers a 5% increase per additional year worked beyond the legal retirement age for those born in 1973 or later.
Military personnel and train drivers will see their retirement age progressively raised to 67, from 56 and 55 respectively. For civil servants, pension calculations will shift from the last 10 years to the full career (45 years), and the equalization mechanism will be abolished. A new early retirement option is introduced at age 60 for those with 42 years of actual work, counting military service and maternity leave.
The Federation of Belgian Enterprises (FEB) welcomed the reform as “necessary” and “an indispensable step to contain rising pension expenditure,” with CEO Pieter Timmermans stating: “We should have started this process twenty years ago,” as DHnet reported.
However, trade unions reacted with fury. The socialist FGTB announced plans to file a constitutional court appeal, calling the law “juridically fragile.” The CSC and CGSLB condemned the vote as a “grave error” and a “passage en force” that sweeps away the social partners’ agreement, as RTL Info noted. The far-left PTB also announced it would coordinate a constitutional challenge.
Energy, Flights, and Other Tax Changes
The programme law adjusts energy excise duties from 1 August 2026, raising gas accises from €8.72/MWh to €10.31/MWh while reducing electricity accises from €50.33/MWh to €46/MWh. The shift aims to incentivize electrification. The government delayed the energy measures from April to August in response to market disruption following the Israeli-American attack on Iran.
The embarkation tax on flights over 500 km will double from €5 to €10 from 1 January 2027, rising further to €11 by 2029, though Prime Minister De Wever announced a re-evaluation during July budget negotiations.
Additional measures include an insurance tax rate increase from 9.25% to 9.6%, a securities account tax doubling from 0.15% to 0.30%, and higher dividend taxes for small companies under the VVPRbis regime (from 15% to 18%). A temporary tax credit for home-to-work travel — budgeted at €20 million per month for May, June, and July — was also approved.
What Was Left Out — and What Comes Next
Notably, the programme law does not include VAT reform. The government backed down due to complexity, but new negotiations are expected to open within budget trajectory discussions. The Arizona coalition aims for a global agreement by 21 July.
With unions planning legal challenges and further protests likely, the political battle over Belgium’s fiscal future is far from over. The constitutional court is not expected to rule on the pension reform until mid-2028, leaving the legislation in legal limbo for years to come.