Do you know the advantages of the restructuring reduction card?

During the recent crisis period the government took measures to limit the number of discharges. The “restructuring reduction card” is such a crisis measure for employees which were discharged during the period of 1 July 2009 until end of January 2011. This temporary measure will be transferred into a permanent measure as from 1 July 2011 and will be provided in the case of bankruptcy, closing or liquidation.

Conditions

The governmental service of labor provision (RVA) provides a restructuring reduction card to all employees which have been discharged in the period as from 1 July 2009 until 31 January 2011 or as from 1 July 2011. The measure does not apply to the five month interim period between February and June 2011! The discharge should be the consequence of bankruptcy, closing or liquidation of the company. The bankruptcy, closing or liquidation itself can be situated in the period before 1 July 2011.

Advantages for the employer: reduction for the target group

The employer which engages an employee with a restructuring reduction card is entitled to a special reduction of the employer's contributions. The restructuring target group reduction corresponds with the validity period of the restructuring reduction card. The new employer can for the newly engaged employee count on a quarterly fixed reduction of its employer's contributions. The reduction amounts to a maximum of 1.000 EUR or 400 EUR per employee. The reduction period depends on the age of the employee at the time he is engaged: is the employee younger than 45 years, then the reduction amounts to 1.000 EUR per quarter for the quarter he is engaged and the four following quarters; is the employee 45 years or older, then the reduction amounts to 1.000 EUR per quarter for the quarter he is engaged and the four following quarters and 400 EUR per quarter for the following sixteen quarters.
These amounts are applicable for full time quarterly employment. If not, the amounts are applicable pro rata.

Advantages for the employee: personal social security contributions

During the validity period of the card, the employee is entitled to a fixed reduction of its personal social security contribution (13,07%). As a result, he will receive a higher net salary.

Attention: In order to benefit from the target group reduction and the reduction for the personal social security contributions, the salary of the employee cannot be too high. The threshold depends on its age (30 years) at the time of the engagement.

Procedure

The employee who wants to obtain a reduction card should apply for it through the payment agency of the competent unemployment organization with the governmental service of labor provision (RVA). The unemployment organization will verify on the basis of the C4 form whether he complies with all the conditions and sends the card to the person concerned. The employee can also present himself with the C4 form at the competent unemployment organization to apply for the card. The card is valid for a six month period, following the end of the employment contract.
The new employer indicates in its quarterly return that he wants to benefit from the social security advantage.