Economic redundancy: what is the temporary degressive allowance (TDA)?

Verified 09 May 2023 - Legal and Administrative Information Directorate (Prime Minister)

Where a company makes economic redundancies, a temporary degressive allocation agreement may be concluded between the company and the State. It allows an employee reclassified in another company to a lower paid position to minimize this loss of salary.

What are the conditions for taking advantage of it? How is this allowance financed? How long can it be paid?

We are taking stock of the regulations.

The DTA is an allowance paid jointly by the government and the company to an employee dismissed for economic reasons. It is used to compensate for the difference in remuneration of the dismissed and reclassified employee in a other company in a lower paid position.

In the companies concerned by a job protection planHowever, the allocation is one of the measures in this plan.

An agreement is signed between the Crown and the company.

An employee who wishes to benefit from it must sign up by completing the registration form:

Temporary degressive allowance agreement - Employee's entry form

The newsletter should be sent to the departmental unit of the Dreets: titleContent.

There is no seniority requirement.

In order to benefit from the DTA, the employee who has acceded to the agreement will have to reclassify within a maximum period of 1 year from the notification of the dismissal.

The reclassification position must be in another company, in DTA: titleContent, in CSD: titleContent or on a temporary employment contract of at least 6 months.

Warning  

A fixed-term contract or a temporary employment contract with no indication of duration does not qualify for the DTA.

Since this allowance is used to compensate for a loss of income linked to reclassification, the new job must result in a loss of earnings.

The DTA amount is calculated on a flat rate basis. Its amount is valued at time of hiring in the new job.

It takes into account the difference between the former average net salary received in the last 12 months and the net salary of the reclassification position in the new company.

Warning  

overtime work and bonuses and allowances which are not salary supplements are excluded.

The financing of the DTA is provided jointly by the company and the government. The State's contribution may not exceed €200 per month per beneficiary.

However, if the company is not in a position to pay the DTA, the State alone shall pay the DTA. The amount of such participation may then be increased to €300.

The payment of the DTA, as well as the participation of the State, is limited to 2 years.

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