New draft law from the so-called ‘Arizona coalition’: major labour measures on the way

The Arizona coalition has submitted a draft bill to the House of Representatives with a series of provisions that could have significant implications for both workers and employers, in the public and private sectors. In this blog post, we outline the main proposed measures. Please note: this is still draft legislation, which means changes are still possible and no final decisions have been made.

Changes in income taxes

This draft law includes a number of fiscal measures. These measures were originally part of the ‘Finance’ section of the (draft) Programme Act (‘Programmawet’) but were removed following comments from the Council of State.

Two of these measures have been modified compared to the original version:

• The PC-for-private-use scheme will now end on 1 October 2025, instead of 1 July 2025. The draft law only regulates the tax side – changes to social security (RSZ) will be enacted through a Royal Decree, but the postponement is expected to apply there as well.
• The phased-out tax benefit scheme for hybrid (company) cars will only apply to personal income tax and not to corporate tax.

Broader employment options for underage students

Currently, employers may only hire students who are:

• at least 16 years old, or 
• at least 15 years old and no longer subject to full-time compulsory education. 

The draft law proposes lowering the minimum working age to 15, regardless of whether the student is still in full-time compulsory education. 

Note: these students may only perform light work. The exact definition of ‘light work’ will be determined by Royal Decree. The measure is not yet in effect.

For more on this proposed expansion, see this article.

Abolition of the ‘starter job’ obligation

The draft law proposes eliminating the starter job obligation from 1 January 2026. Public sector employers would still be required to prioritise hiring young people for socially valuable projects.

The starter job obligation requires employers with a minimum number of staff to hire and retain a set percentage of young workers. 

The government plans to scrap this obligation because it creates administrative burdens for employers and has proven ineffective due to numerous exemptions. 

Solidarity contribution for primary incapacity for work 

The draft law introduces a new solidarity contribution, replacing the current “responsibility contribution,” which employers must pay when certain employees are unable to work for more than 30 calendar days due to illness.

Abolition of the current pension bonus for employees and civil servants 

The pension bonus, which was reintroduced in 2023, is set to be abolished again. Employees who work beyond their earliest pensionable age after 1 July 2024 will still be able to accrue a bonus for a maximum of three years, and choose either a lump-sum or monthly payout.

The government plans to end the pension bonus on 1 January 2026. Accrual will still be possible until the end of 2025. A new bonus-malus system will be introduced, though the specifics have not yet been announced.  

The option to have the bonus paid out as a monthly annuity will be abolished retroactively from 1 January 2025. This retroactive effect has no consequences for individuals entitled to the pension bonus, as no one had had the opportunity to choose monthly payment before 2025.

Responsibility invoices for local authorities

This section of the draft law aims to revise and ease the financial responsibility mechanism for local authorities affiliated with the Consolidated Pension Fund (‘Gesolidariseerd Pensioenfonds’) while ensuring its sustainable funding.

Employers with their registered office in a municipality with over 100,000 inhabitants (as of 1 January of the previous year) may be eligible for a reduction in their responsibility invoice for contributions to the Consolidated Pension Fund.

The total amount of this reduction will be determined by Royal Decree and will be proportionally allocated based on each employer’s payable contribution, without factoring in any existing increases or reductions.

The draft law stipulates that the reduction may never exceed the amount of the solidarity contribution due (i.e. a negative balance is not allowed).

To support these reductions, the draft law also provides for:

• An extension of federal funding for the Consolidated Pension Fund through 2028, and
• a new targeted federal subsidy equal to the total amount of the reduction.
• These measures are scheduled to take effect on 1 January 2026.

Increase in the Wyninckx contribution on supplementary pensions

The Wyninckx contribution, which employers must pay on very high supplementary pensions, will increase from 3% to 12.5% as of 1 January 2026. 

This federal measure cancels out the planned pension contribution increase, which had aimed to double the rate to 6% by 2028.