Since 1 October 2013 social security contributions must be paid on almost all (severance) payments that are due by the employer based on the termination of the employment contract. You could read this in our ezine of 3 October 2013. The main argument for this new regime was to fight fraud on social security contributions.
There was a rather sceptical attitude towards this new regime, because on certain payments that had nothing to do with fraud, social security contributions were nevertheless charged. The new regime entailed also some problems in the unemployment benefit system.
The government therefore took a step back with the Royal Decree of 21 December 2013 (published in the Belgian Gazette of 31 December 2013). This Decree entered into force retroactively, namely from 1 October 2013.
This means that the so-called compensation for special protected employees (f.i. compensation in case of dismissal of a pregnant employee or an employee on time credit) remains exempted from social security contributions. The compensation can also be cumulated with unemployment benefits.
Apart from these changes, the new regime of October 2013 remains in force. You will indeed be required to pay social security contributions on the non-compete compensation agreed within a period of 12 months after the end of the employment contract or on the clientele indemnity.
