by Xavier Baeten, Professor in Reward & Sustainability, Vlerick Business School & Bram Smolenaers, Head of Market & Product Development Health Care, AG Employee Benefits & Health Care
Following a first article published in June exploring whether Belgians are too optimistic about their social security benefits, Professor Xavier Baeten and Bram Smolenaers reveal more results from the survey conducted by Vlerick Business School and AG Insurance on the way employees assess the risk of losing their capacity to work.
Parental leave, burnout, an accident or serious illness are among the many potential causes of an extended absence from work. But what about the financial implications? And what role do employers play? Vlerick Business School, in association with AG Insurance, conducted a survey into the way employees assess the risk of losing their capacity to work. Professor Xavier Baeten questioned over 1,000 respondents about their experiences and personal expectations and the role they feel employers should play.
1 out of 3 expect to experience financial strain while on incapacity leave
In our previous article, you saw that employees often overestimate the size of their statutory incapacity benefits. Once they are shown the real size of their replacement income, a good eight out of ten respondents expect to see a drop in their standard of living. One out of three even worry that they will have major financial difficulties.
Employees with a salary below the National Institute for Illness-Disability Insurance (INAMI/RIZIV) salary cap of €3,633 per month are particularly at risk in this group. Professor Baeten cautions that these employees probably do not have enough savings set aside to absorb a financial setback:
For many of them, it can be quite terrifying to suddenly lose a few hundred euros from a net salary of roughly €2,000. In the meantime, their fixed costs continue as usual, not to mention that, with an illness, there are often additional expenses. So higher outflows to cover, with less money.
What role do employers play?
Professor Xavier Baeten explains:
Our research shows that employees overestimate the size of their statutory incapacity benefits, and that they assume their standard of living will decline should anything happen to them. Given that only 18% of Belgian employees currently have Income Protection coverage, it seems employers are not making full use of the option to offer tax-advantageous remuneration. It is clear that there is still a lot of potential for companies looking to raise their profile as a caring employer.
Professor Baeten consolidated all the findings in a research paper. Want a copy for yourself? Download this exclusive Research paper.
About the authors
Xavier Baeten is Professor in Reward & Sustainability at Vlerick Business School. He is an expert in how rewarding can help organizations achieve their strategy and give them a competitive advantage. He is also an independent member of various remuneration committees and teaches the course on Corporate Sustainability and Responsibility in the MBA programs.
Bram Smolenaers is Head of Market & Product Development Health Care at AG Employee Benefits & Health Care. Within AG, he focuses on strategic development and growth of the AG EB Health Care products, thereby stimulating internal and external cross-pollination and prototyping innovation initiatives. He also represents AG Employee Benefits & Health Care in the broader marketplace, including AmCham Belgium’s Innovative Healthcare Committee.