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It was announced last October and is now becoming a reality: time credit with motive will remain possible, but the right to additional benefits from the NEO will be reduced from February 2023. Acerta summarises the changes and answers key questions following this development.
As announced in the October 2022 budget agreement, the government must make cuts, and this will be accompanied by a reduction in time credit benefits. The royal decree amending these benefits was published on 31 January and takes effect on 1 February 2023 (instead of 1 January as initially announced).
The employee's right to reduce their working hours or take time off to take time credit remains unchanged.
In principle, when an employee takes time credit, their loss of income is partially compensated by an allowance from the NEO. Henceforth, in certain situations, the employee will still be able to use their time credit, but will no longer receive benefits from the NEO to compensate for the loss of income for this purpose. The conditions for receiving benefits from the NEO have become stricter.
From 1 February 2023, the following stricter conditions will apply to entitlement to NEO benefits under time credit:
It will still be possible to take full-time time credit for the child's5th birthday until the child is 8 years old but from now on, you will no longer receive benefits from the NEO for this. For a reduction in working hours, benefits from the NEO are always paid between the child's 5th and 8th birthdays.
The supplementary allowance for employees aged 50 and over in case of thematic leave, or aged 50 or over with 5 years of seniority with the employer for time credit, will be abolished. So these workers will still receive benefits from the NEO but only the basic benefit, with no supplement.
In contrast, this new legislation will not affect end-of-career time credit.
As mentioned earlier, the conditions for accessing the right to absence or reduced working hours through time credit and the right to benefits from the NEO to compensate for a loss in wages, are two separate schemes.
Here is a summary table to make things a little clearer:
| Right to absence | Entitlement to benefits | |
|---|---|---|
| Time credit to care for a child |
|
|
| Time credit with motive |
Condition of employment breach
|
Condition of employment breach
|
End-of-career time credit remains unchanged.
As a general rule, it applies to all applications for time credit submitted to the employer from 1 February 2023. For applications submitted to the employer before that date, the "old" rules or entitlements still apply.
However, there are two exceptions:
- The condition of 36 months of service with an employer to be entitled to NEO benefits to care for a child under 8 years old will only apply to applications for time credit submitted to the employer from 1 June 2023.
- The reduction to 48 months of the right to time credit to care for a child applies to all time credits, even those that started before February 2023, provided that on February 1, 2023, the employee has less than 30 months of time credit to care for his/her child. In order to prevent the employee from being without income from one day to the next, they have the right to terminate the time credit early. They do not need the employer’s permission to do so.
The changes to the regulations governing the award of benefits by the NEO in the context of a time credit will come into force on 1 February 2023.
Do you have a question about a time credit application submitted by an employee? Contact the experts at Acerta.
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