Government opens access to “second pillar” of pension for self-employed

On Friday the cabinet approved a measure which opens up the second pillar of the pension system, the additional pension, to the self-employed.

This was announced by Minister for Pensions, Daniel Bacquelaine, and the Minister for the Self-employed, Denis Ducarme.

To date, only those employed, and business leaders, are able to accumulate a pension in addition to the statutory pension. The system will now be extended to all those who are primarily self employed (as individuals) – a total of 432,500 people. It will also apply to assisting spouses, self-employed carers and those with supplementary self-employed status, contributing as much as those who are self-employed in their main job.

In return for respecting the tax limit of 80% (the amount of the legal and additional pension, which cannot exceed 80% of your final salary when last employed), the self-employed will be able to benefit from a reduction of 30% on contributions paid. Additional pension benefits are taxed at a separate rate of 10%. The bill will go before parliament before the end of the year.

Both ministers are delighted with this decision in favour of the self-employed, which follows the increase in the minimum pension. It is, they stress, an additional step towards the general availability of additional pensions and harmonising the current pension regimes.

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