Mobility allowance: a closer look at the cash-for-car scheme

Although the car still offers many advantages (especially if you hold a MAES fuel card and therefore refuel cheaply), this classic means of transport is gradually losing popularity. And that is not surprising. The traffic congestion is increasing and alternatives such as sharing bicycles and electric steps or even Ubers are becoming increasingly attractive. The government is responding to this with initiatives such as the mobility budget and the mobility allowance. Here we explain the differences and highlight the mobility allowance, which is also referred to as the “cash for car” scheme.

Mobility budget or mobility allowance?

Although the two systems are sometimes confused and indeed have many similarities, you cannot just equalize the mobility budget and the mobility allowance. The mobility budget allows employees to trade in their company car for a more sustainable copy, while employees who hand in their company car and opt for a mobility allowance permanently give up a company car. They receive cash compensation in exchange.

If you switch from a mobility allowance to a mobility budget, you naturally lose your right to a mobility allowance – and vice versa.

The size of your mobility allowance

How much cash you get in exchange for your company car depends on a number of parameters. The mobility allowance is calculated using a formula that takes into account, among other things, the catalog value of the company car you return, the extra options, the employee’s own employee contribution, and whether or not you have a fuel card. Namely:

• 20% of 6/7 of the catalog value (minus any personal contribution to the car costs) if you did not have a fuel card.
• 24% of 6/7 of the catalog value (minus any personal contribution to the car costs) if you did have a fuel card.

The amount resulting from this is still taxed, but as an employee you do not pay social security contributions. The mobility allowance can also rise or fall with a promotion or a job change (for which you as an employee would be entitled to a company car from a higher or a lower category).

Who is eligible for “cash for car”?

Just like the mobility budget, the mobility allowance is based on a double freedom of choice: the employer is free to choose whether or not to introduce the system (and whether he does this for the entire company, or for certain departments or individual employees), and the employee is free to choose whether or not to accept it. If both parties turn green, then a number of conditions must still be checked:

• As an employer you have been offering company cars to your employees for at least three years.
• As an employee you must have had a company car for at least one year in the last three years (and this for an uninterrupted period of three months prior to the application for the mobility allowance). However, the cash for car arrangement can also be requested by an employee who did not actually have a company car, but who was entitled to it in the company (during the same period).

Enter the mobility allowance

Anyone who wants to introduce the cash-for-car scheme in their organization must do so through the car policy, individual agreements and the collective labor agreement. It goes without saying that you inform the staff about this. Employees wishing to go along with it must then submit a written request. The employer finally accepts that request (also in writing) and the agreement is included in the employment contract