What is a free supplementary pension for the self-employed?

A VAPZ is a Belgian pension arrangement belonging to the second pillar. The government has given self-employed persons, with or without a company, the option to pay a limited amount per year into that second pillar.

With a VAPZ agreement, the self-employed person can first and foremost build up a supplementary retirement pension
In addition, the agreement can also provide for a payout should the self-employed person die from illness or accident before the intended retirement age
Finally, many VAPZ contracts also provide a monthly supplementary income if the insured becomes unable to work during their career

The VAPZ is regarded as the most tax-friendly of all current pension vehicles in the second and third pillars. Whether that is really the case for your personal situation depends. Depending on the level of income, the expected income stream after retirement age, the insured's expectations regarding return, and whether you pay the VAPZ premium personally or through your company, taking out an IPT (an individual pension commitment funded by your company) may nevertheless be more attractive than a VAPZ. Our advisers can work out with you what the best solution is for you personally. At Life Experts, we not only make sure you always pay the optimal VAPZ premium. More than that: we make sure you always choose the best tax combination between IPT, POZ (the pension agreement for the self-employed without a company), VAPZ, or pension savings. That is because we have fully mapped out your personal situation and follow it up periodically together with your accountant. As a specialised insurance intermediary, we are in a privileged position, and you benefit from that, because it means you always know exactly how much you need to save to obtain maximum tax benefit.

Who is it for?

A VAPZ is only not worthwhile if the self-employed person concerned does not have the means to save, or does not pay taxes.

Self-employed persons in a primary occupation
Self-employed helpers who pay social security contributions like self-employed persons in a primary occupation
Assisting spouses or legal partners subject to the maxi-status

Programme Act of 24 December 2002

This law liberalised the VAPZ in 2002. This means that regular insurance companies could also offer the VAPZ from then on, whereas previously the VAPZ had been reserved for providers such as social secretariats. Article 44 §1 states: "With a view to building up a supplementary pension, a self-employed person, assisting spouse, or self-employed helper may conclude a pension agreement with a pension institution." This means that the pension buildup takes place with an external party, the insurer. Article 47 of the law imposes capital protection. This is why the VAPZ is never offered in Branch 23, but only in Branch 21. Would you like to know more about investing in Branch 23 (which is possible, for example, in an IPT, or even in pension savings or free savings)? Then be sure to read this article, and take a look at the fund pages of our insurers.

Our tips: choose a monthly or quarterly premium!

Do you have a company and have that company pay your VAPZ? Then be sure to pay your VAPZ contract on a monthly or quarterly basis. That way, the benefit in kind that the VAPZ premium creates also counts as normal last annual gross salary when determining your 80% rule for your IPT or group insurance.

What is a social VAPZ, and why do we usually recommend taking out an ordinary VAPZ?

A social VAPZ is a VAPZ in which at least 10% of the premium must be used for 'solidarity benefits'. As a result, in a social VAPZ you may pay a premium that is 15% higher than in an ordinary VAPZ, which means a total maximum premium of 9.40% of the reference income, with an absolute maximum of 3,786.81 EUR (in 2020). Various providers of social VAPZ contracts (insurance companies, social secretariats, and pension funds) often praise the additional solidarity benefits of a social VAPZ to the skies. Do not let yourself be overwhelmed. These extra guarantees often fill their commercial brochures nicely and empty your wallet without any really substantial guarantees in return. That is because the premium available for the solidarity benefit amounts to only a few hundred euros per year.

So the solidarity benefits are very meagre
The payouts are limited both in amount and in duration
And what many do not realise: the conditions of the solidarity benefits can be changed in the interim

Only Branch 21 is possible, but there are exceptions...

In principle, a VAPZ can only be concluded in Branch 21, because a legal capital guarantee must be provided. Since late 2023, insurer Vivium has offered a unique formula for VAPZ in which the premium is partially invested in Branch 23 while the legally required capital guarantee is still provided. For young people, that type of VAPZ can generate a higher potential return than a classic VAPZ whose premium is fully invested in Branch 21.

What is the tax treatment of the premium?

First of all, the maximum premium is limited to 8.17% of the reference income for an ordinary VAPZ. VAPZ premiums are paid by the self-employed person themselves, so privately, even if they have a company. They are 100% deductible, both in personal income tax (to be declared as 'non-withheld personal social contributions') and for the calculation of social contributions. As a result, you can recover more than 60% of your payment; the exact amount depends on the costs of your professional income, the insurance company, and the municipal tax.

What is the tax treatment of the payout?

At payout, the notional annuity system is used. For 10 to 13 years, the beneficiary declares an amount of up to 5% of the total capital as 'notional' income, whereby the capital is first reduced by a solidarity contribution of 2% and a RIZIV (the national health and disability insurance institute) contribution of 3.55%. If you remain active until age 65, even just 80% of the capital is used to calculate the notional annuity.

VAPZ (social)