A number of benefits are available to Luxembourg residents and their families who have made contributions to a social security fund.
In order to qualify for any unemployment benefits, the person must be resident in Luxembourg. A person who has worked at least 16 hours a week for at least 26 weeks within the last 12 months is eligible for unemployment benefits. Recent graduates must have 26 weeks of registered unemployment. Unemployment must not be due to voluntary leaving or the refusal of a job offer.
The benefit is equal to 80% of the insured’s average earnings, up to 2.5 times the social minimum wage. Benefits are paid for up to 365 days in a 24 months period. Extensions are available for people who have reached the age of 55.
All economically active people are entitled to a retirement pension. The legal retirement age is 65 and individuals must have contributed a minimum of 120 months. It is possible to retire at age 60 with 480 months of paid contributions.
The old-age pension consists of a flat-rate amount, 1/40th of which is acquired per insurance year up to a maximum of 40 years, and a proportional supplement amounting to 1.85 % of earned income declared throughout the insured person's working life in Luxembourg. If the insured person continues to work beyond the date on which entitlement to a pension begins, this rate is increased by 0.01% per additional year worked and per additional year of age.
The minimum monthly pension is 1,400€ (after 40 years contribution).
Disability, invalidity and widower pension schemes are also available. The overseeing body for pensions in Luxembourg is the Caisse nationale d'assurance pension (CNAP) (only available in French).
The sickness benefit (incapacité de travail) equals 100% of the insured’s average daily covered earnings. Sickness benefits for temporary work incapacity are paid by the National Health Office (Caisse Nationale de Santé). Employees are to declare any sickness leave to their employer and a medical certificate must be provided if the leave lasts for longer than two days.
Every woman who has worked in Luxembourg at least 6 months prior to pregnancy is entitled to maternity benefits (congé de maternité). The benefit is equal to 100% of the insured's average daily covered earnings. The benefit is paid for 8 weeks before and 8 weeks after the expected date of childbirth (12 weeks in the case of a premature birth, multiple births, or if the mother is breastfeeding her child).
Mothers who adopt are also entitled to 8 to 12 weeks paid maternity leave.
A maternity allowance (allocation de maternité) is paid to women who have no professionnal occupation at the moment of childbirth or adoption.
Birth allowance (allocation de naissance) is a sum of money paid to pregnant women or women who have just given birth. The purpose of this allowance is to encourage the supervision and medical monitoring of their pregnancy.
The maternity allowance is composed of three instalments:
Child benefit (allocations familiales) is paid every month. Parents can apply for it as soon as their child is born. Child benefit is paid at least until the child’s 18th birthday. The value of child benefit depends on the number of dependent children in your household and their age.
Monthly allowance is paid from the end of the maternity leave if one parent decides to stop work completely to raise their child (allocation d'éducation).
Parental leave (congé parental) is time off work that any employed parent of a child younger than 5 years can take if they wish to interrupt their professional career or reduce their hours to spend more time raising their children. During parental leave, the parent is entitled to a series of financial allowances to compensate for the loss of salary. It is possible to either take full-time leave for 6 months or to work part-time for 12 months. If both parents work, they are both entitled to parental leave but cannot take it at the same time.
The social security contributions payable by each employee are deducted at the source, i.e. from the gross income. Employer and state also contribute to make up the final amount of contributions into the social security system:
|Healthcare insurance - benefits in kind||2.80%||2.80%|
|Healthcare insurance - benefits in cash||0.25%||0.25%|
|Long-term care insurance||/||1.40%|
|Accident insurance (assurance dépendance)||1.15%||/|
|Health at work||0.11%||/|
|Company mutual fund||0.62% up to 2.38%||/|
The basis of contributions is capped at 5 times the minimum (i.e. 8,787.81), except for long-term care insurance.