Belgium Initiates Sweeping Unemployment Benefit Reform, Capping Duration at Two Years

New Era for Belgian Unemployment Benefits

As of January 1, 2026, Belgium has begun implementing a major reform to its unemployment benefit system, introducing a cap that limits the duration of benefits to a maximum of two years. This change represents a significant shift from the country's previous system, which, under certain conditions, allowed for unlimited unemployment benefit payments. The reform is part of a broader government effort to reduce the budget deficit and activate jobseekers into the labor market.

Phased Implementation and Affected Individuals

The new regulations are being rolled out in several phases. The initial wave, which took effect on January 1, 2026, impacts specific groups, including unemployed individuals who have accumulated at least 20 years of full unemployment in their career and those receiving integration benefits for over a year. Subsequent phases will see the benefit limitation extended to other categories:

• By March 1, 2026, individuals with 8 to 20 years of full unemployment will be affected.
• From April 1, 2026, the cap will apply to all other unemployed individuals who have been jobless for more than two years.

Estimates suggest that over 115,000 people will lose their unemployment benefits between January 1 and April 1, 2026, with an additional 60,000 individuals expected to be affected by July 2026.

Structure of the New Benefit System

Under the revised system, entitlement to unemployment benefits will typically comprise 12 months as a standard period. This can be extended by up to an additional 12 months, depending on the individual's professional experience, bringing the total maximum duration to 24 months. The government has indicated that initial benefit amounts will be higher at the start of the unemployment period. After the two-year period, individuals who remain unemployed may need to seek social integration income from the Public Centres for Social Welfare (CPAS/OCMW).

Rationale and Reactions

The Belgian federal government, led by Prime Minister Bart De Wever, has justified the reform by citing the need to reduce the country's budget deficit, which reached 4.2% of GDP in 2023, and to encourage jobseekers to re-enter the labor market. Employment Minister David Clarinval stated that 'unemployment is not a career plan' and highlighted the availability of 175,000 jobs in Belgium. The reform is projected to generate significant savings, estimated at €902 million in 2026, rising to €1.9 billion by 2029.

However, the reform has also drawn criticism and concern. The socialist trade union ABVV is preparing legal action against the changes. Social welfare centers (CPAS/OCMWs) have expressed worries about a potential influx of new clients and have called for promised federal funding to manage the increased demand for social assistance. There are also concerns that the reforms will disproportionately affect regions with higher unemployment rates, such as Wallonia and Brussels.

Related Reforms and Financial Impact

In addition to the time limit on benefits, other related reforms are being introduced. Starting in 2026, unemployment benefits will face heavier taxation, with the aim of widening the financial gap between those who work and those who do not. The supplementary tax reduction for unemployment benefits will be eliminated in 2026, and the basic reduction will be phased out by 2029. Unions predict that these tax changes could cause some unemployment benefits to fall below the subsistence level by 2029.