Administrator: assimilation of a period of sick leave to a period of activity for the calculation of the pension
August 2022 – If you can no longer work as a director because of illness, you can have the period of incapacity to work treated as a period of self-employment for the purpose of calculating your pension. But beware of company cars and other benefits!
Rules of the game
The conditions for assimilation in the event of incapacity to work are set out in a Royal Decree of 22 December 1967, which provides for three conditions:
the entrepreneur must have exercised a self-employed activity prior to the period of incapacity for work;
the entrepreneur must have ceased all professional activities during the period of incapacity for work for which he is requesting assimilation, i.e. both activities carried out in his own name and activities carried out in his name by an intermediary;
the incapacity for work has been recognised in accordance with Article 30bis of the Royal Decree of 20 July 1971 establishing an indemnity and maternity insurance for self-employed persons and assisting spouses.
The facts
Created a limited liability company for garden design, renovation and maintenance of buildings. After about ten years, he is forced to stop his activities because of back problems. He applied to his social insurance fund to have his illness and disability treated as the same in order to preserve his social security rights.
Initially, the social insurance fund refuses the assimilation because A does not prove that he has stopped his professional activity. A is still a partner in the limited liability company and must therefore prove that his mandate is unpaid.
A provides the necessary explanations, after which the social insurance fund examines whether the limited liability company still grants benefits to A. It emerges from this examination that A still drives a company car. He still has a mobile phone at the company's expense. His social insurance premiums are paid by the company and A receives reimbursements for the monthly instalments of a car loan. A explains that he will repay these benefits to the company, which he does a little later.
After that, the social insurance fund definitively refuses the assimilation and considers that A has not provided any new information. The reasoning is essentially as follows: A claims that his mandate is free of charge because he has reimbursed the benefits, whereas the insurance fund sees this reimbursement as proof that the mandate was not free of charge.
The court
The Liège judge verifies whether the professional activity has effectively ended. Directors are presumed to be engaged in a gainful activity. A was therefore presumed to be engaged in an activity simply because he was a director of a limited liability company. In this case, however, the company's activity had come to an end due to the physical incapacity of the company director. The company therefore no longer had any regular activity.
Were the benefits proof that there was remuneration?
The social insurance fund asked A to prove that he was no longer a shareholder or that his mandate was gratuitous in law and in fact. The court considered that the social insurance fund went too far. The judge considers that it is sufficient for a director to prove that his activity was clearly not remunerated (because the activity had ceased) or that it was in fact unpaid.
The judge also infers from older case law that when the benefits are modest - as was the case here - and are unrelated to the exercise of the professional activity, it can be concluded that it is indeed a question of a gratuitous mandate.
Assimilation confirmed
The labour court concludes that it is a fact that A has ceased his professional activity: due to his health problems, he has not exercised his mandate as a director or his activities as an active partner. There is no regularity in his activity and he did not earn any income from it.
Since he no longer exercised a professional activity, the assimilation of the period of inactivity to a period of activity as a self-employed person can therefore be granted for the calculation of the pension.
