Social security

Wed. 06/06/12 - 12:06

• Who is self-employed?
• Which status do you have as a self-employed worker?
• How much do you pay?
• What do you receive?
• Your protection and pension

Who is self-employed?

The law states that anyone with a professional occupation but who is not bound by a governmental contract or an employment contract is presumed to be self-employed. A self-employed person undertakes work and provides services for his clients on an independent basis. This is contrary to the employee who is considered to undertake work for an employer in return for a wage and under authority.

In addition to self-employed workers and employees, in Belgium it is also possible to work as a civil servant for the government. Anyone who has fixed working hours, clearly defined tasks, has little influence on the organisation of the working time, etc. may be presumed to be an employee. The main characteristic of the self-employed entrepreneur is, as has been said, the absence of subordination in respect to the customers. Selfemployed people do work by order of third parties, but with their own organisation and planning of working hours. In practice, the distinction is not always clear.

Nevertheless, this distinction is crucial when it comes to the social protection that goes hand in hand with employees – or the self-employed status. An employee has social protection because the employer makes the necessary social payments for him. Self-employed workers, on the other hand, are obliged as entrepreneurs to arrange their own social protection. This is one of the risks of working on a self-employed basis!top

Which status do you have as a self-employed worker?

Once it is established that you are self-employed, you should become affiliated to a social insurance fund, at the latest on the day on which you begin your self-employed activity. Anyone who works on a self-employed basis and is not affiliated to a social insurance fund is liable to receive an administrative fine.

You are affiliated as a “self-employed in a primary (main) occupation” or a “self-employed in a secondary occupation”. If the self-employed activity is your only professional activity, you will be affiliated as a self-employed in a primary occupation. You have social protection as a self-employed worker.

If, alongside your activity as a self-employed worker, you still work as an employee, with a contract for at least half-time work on a quarterly basis, then you have social protection as an employee. You are affiliated as a selfemployed worker in a secondary occupation.top

How much do you pay? (amounts for 2012)

In order to have social protection as a self-employed worker, you have to pay a quarterly social security contribution to the social insurance fund. This contribution is calculated on the net taxable professional income as passed on to us by the tax authorities.

The self-employed in primary occupation pay an annual social security contribution of 22 % of the revalued net taxable professional income of three years previously, plus the administrative costs of the social insurance fund. At least € 720.23 must be paid per quarter.

Those just starting up on a self-employed basis as their main professional occupation do not yet have an income from three years previously on which the contributions can be calculated. For the first three years of their activity, they pay contributions based on the income for the year itself. In the first year of activity, you pay at least € 671.12 per quarter; in the second year at least € 687.49 per quarter and in the third year at least € 703.86 per quarter.

Once the actual income of the starter is known, a supplementary social contribution may have to be paid. The provisional amount is definitive for starters who have earned less than or equal to € 12,597.43. Those who earn more will have to pay a further social security contribution on the difference between the actual income and the € 12,597.43.

Those who work on a self-employed basis as a secondary occupation do not have to pay any social security contributions if their income is below a net taxable level of € 1,393.69 per year. Above this amount, they also pay 22 % on the actual income.top

What do you receive?

Those who work on a self-employed basis as their main occupation receive social protection thanks to the payment of their social security contributions. In the first place you build up your pension: for every year you work, you save for your pension later on. At this moment in time a self-employed worker who has worked for 45 years is entitled, at the age of 65, to a minimum pension of a net amount of € 1,027.28 per month for a single person or € 1,336.54 for a family pension.

You are also covered for health insurance and health care: this largely reimburses the costs of hospitalisation or a visit to the doctor or the dentist.

If you are taken ill while you are working and are no longer able to work, you are entitled, as of the second month of illness, to an allowance for work incapacity. If you are ill for a long period and have to stop your professional activity altogether, then you can continue to build up your social rights without having to pay contributions.

Female self-employed workers are entitled to eight weeks of maternity leave with maternity allowance (€ 398.71 per week) and 105 service cheques for help in the home after giving birth.

You are also entitled to family allowance: you receive child benefit every month for your children (€ 82.78 for a first child, € 163.77 for a second child, etc.) and upon the birth of a child you are entitled to maternity benefit (€ 1,199.10 for the first child, € 902.18 for the following children).

If your business goes bankrupt, you can claim bankruptcy insurance for 12 months under certain conditions. You retain your right to health insurance and health care and you receive a bankruptcy allowance (€ 1,027.28 or € 1,336.54 per month).

Anyone whose social security contributions are not in order encounters problems with the granting of the social protection (reimbursement by the health insurance fund of visits to the doctor, non-receipt of allowances due to illness, lower pension later on, etc.).

Those who work on a self-employed basis as a secondary occupation do not receive any social rights from the contributions paid. After all, they already have social protection through their status as a wage earner.top

Your protection and pension

The legal social protection of a self-employed person can be supplemented by additional insurance taken out on a voluntary basis.This way, you can ensure that you have sound social security. The Guaranteed Income insurance and a supplementary pension scheme are certainly advisable.

Zenito Aanvullend Pensioen offers you its (Social) Voluntary Supplementary Pension, an advantageous package tailored to the self-employed entrepreneur that meets the extra needs in terms of sound social protection.