# Bridging allowance: social status after bankruptcy Bankruptcy causes a series of consequences for the bankrupt person. Below, we briefly discuss the consequences of bankruptcy and specifically focus on the bridging allowance. ## What is the bridging right? When self-employed individuals have to cease their activity, for example, due to bankruptcy, they are entitled to an income from social security. This is a right for self-employed individuals to receive benefits to “bridge” difficult periods. This right is called the “bridging allowance.” To bridge that difficult period, you can receive a financial allowance for up to 12 months. During this time, you are not required to pay social contributions but still retain certain social rights. IMPORTANT: The bridging allowance has been reformed since January 1, 2023. The information on this page applies if you have ceased or interrupted your self-employed activity since January 1, 2023. If you interrupted or ceased your activity before January 1, 2023, different conditions and modalities apply. ## When does the bridging allowance arise? Since January 1st, 2017, there are four specific situations that give rise to the bridging allowance: ### 1. Forced interruption If circumstances beyond your control force you to temporarily interrupt or permanently stop your activity. These may include: - a natural disaster - a fire - a damage to the buildings intended for professional use or the professional equipment - an allergy caused by exercising your profession - a decision by an economic player or an event with economic impact - **bankruptcy – either** personal bankruptcy **or** of the company **in which you were a mandatary or working partner at the time of the bankruptcy**. ### 2. Discontinuation due to economic difficulties If you have to officially cease your activity due to economic difficulties. To be entitled to the bridging right, you must meet one of the following conditions: - You receive a living wage at the time of cessation and can prove this with an attestation from the PCSW. - The NSSO (National Institute for the Social Security of the Self-Employed) has exempted you from social security contributions in the 12-month period preceding the month of your cessation. - You have a limited income. In the year of cessation as well as the year before, your net taxable income as a self-employed person did not exceed EUR 16,409.20 as a self-employed person or helper, or EUR 7,208.56 as a collaborating spouse (amounts 2023). Strict and limitative criteria are thus attached to each situation. ## Conditions for the bridging right To claim the bridging right, you must meet a number of cumulative conditions:​ - You have your main residence in Belgium. - You are self-employed as a main occupation or collaborating spouse during the quarter in which the event occurred and the three preceding quarters; - You owe social security contributions for the same quarters. You must have effectively paid for 4 quarters in the 16 quarters preceding the cessation or bankruptcy. - You are no longer engaged in any professional activity at the time of the interruption/ cessation of your self-employed activity. ## Extent of bridging duty The existing basic package will be maintained: this package consists of a maximum of 12 months of financial benefits. You will also remain in order with health insurance and family benefits for a maximum of four quarters. Have you not fully used up the basic package? Then you can carry the remaining balance over to the next event in your career. Once your activities are interrupted, you will receive a financial benefit. The benefit can be granted for up to 12 months. The amount of your benefit depends on your family situation: - Without family burden: €1,513.57 per month. - With family burden: 1,891.36 euros per month. You are entitled to the higher benefit with family burden if you have a dependent for health insurance. To determine the amount of the allowance, the NSSO distinguishes between two interruption periods. - During the first period, the beneficiary will receive the financial benefit per period of seven consecutive days; - During the second period, the benefit will be paid monthly. ## Can you combine the bridging right with a professional or replacement income? Previously, the classic bridging right was absolutely incompatible with the exercise of any professional activity or replacement income. From now on, a (limited) cumulation is indeed allowed. As far as the professional activity is concerned, it can be either a self-employed activity or an activity as a salaried employee or civil servant. The bridging right can be maintained for a maximum of three – not necessarily consecutive – months, but the amount of the benefit will decrease gradually. Please note: exercising a professional activity always has an effect on the bridging right, regardless of how much you work. In a given calendar month, do you work one day as a temporary worker? Or do you work 20 days in that month? The effect on the bridging entitlement is the same. Combination with another replacement income is also allowed from now on, provided the sum of the financial benefit and the other replacement income does not exceed the bridging entitlement. ## Do you have multiple breakdowns? If you have to interrupt or stop your activity due to a new event, you may be entitled to additional months/quarters of bridging entitlement, even if you have already used up your “basic package” of 12 months/four quarters in one or more previous events. The maximum number of extra months/quarter depends on the number of quarters of accrual of pension entitlement as a self-employed person in a reference period, i.e. the period between the previous event and the new event. ## Simplification and relaxation With only two well-defined situations now eligible for the bridging right, we can speak of a simplification of the system. In addition, today there is the possibility of cumulating the bridging right with another replacement income and/or a professional activity, within well-defined limits. Your social insurance institution is in charge of applying the legislation on the bridging right. For further questions, our office will advise and assist you in which the aspect of tax consequences should also be examined, as the bridging right is taxed. Bruno Schoenaerts & Alain Van den Cloot ## Frequently asked questions on bridging rights after bankruptcy [Please add FAQ posts for them to display here.](https://schoenaerts.com/wp-admin/post-new.php?post_type=avada_faq) [Get in touch](https://schoenaerts.com/en/contact-page/)