Applying for the cost-of-living benefit

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Upon application from an adult applicant and in certain conditions, the National Solidarity Fund (Fonds national de solidarité – FNS) awards a specific benefit to low-income households.

To qualify for the cost-of-living benefit, the household's income may not exceed a certain threshold set by order of the Council of Government of Luxembourg. The amount of the benefit is determined on the basis of the applicant's household (whether the applicant lives alone or with several other people).

The benefit is not subject to income tax and is also exempt from social security contributions.

Who is concerned

The cost-of-living benefit may be awarded to anyone who:

  • is legally resident in Luxembourg;
  • is listed on the main register of the National Registry of Natural Persons (Registre national des personnes physiques);
  • actually lives at the address where they are registered as normally legally resident;
  • has been legally resident in Luxembourg for a reference period of 12 continuous months prior to the month in which they submitted the application;
  • either alone or cumulatively with the people living with the applicant in the same household, and at the time of submitting the application, has a low annual income.
All persons living in the household when the application for the cost-of-living benefit is filed are considered applicants for the benefit for the current year. The applicant in whose name the application in submitted is deemed to be the main applicant.

The following individuals are not entitled to receive the cost-of-living benefit:

  • persons in receipt of the State financial aid for students in higher education (Aide financière de l'Etat pour études supérieures);
  • third-country nationals who entered the country as a student, pupil, intern, volunteer or au pair;
  • EU nationals, or nationals of a country treated as an EU Member State (Iceland, Liechtenstein, Norway and Switzerland), who entered Luxembourg to enrol in a public or private higher educational institution, and who are principally engaged in pursuing studies or professional training
  • persons who are subject to a preventive detention order or a custodial sentence, except during the period of day parole or if they have received a suspended sentence, are on conditional release or are wearing an electronic tag.

Prerequisites

Applicants may not have applied previously (it must be their first application during the year).

Deadlines

Applications must be submitted to the FNS by post before 30 September of the current year. The postmark serves as proof of the date.

Applications submitted after 30 September of the current year will not be considered.

How to proceed

Filing an application

Applications are lodged using a form available from the communal administration offices or from the FNS.

Persons who have previously received the cost-of-living benefit can receive a prefilled form at the communal administration.

The benefit can only be applied for once a year. This limitation also applies if there is a change in the composition of the applicant's household or income situation.

Supporting documents

When applying for the cost-of-living benefit, the applicant must declare all of their income (earned by the applicant alone or, where applicable, by the household). The following supporting documents must be included:

  • income from regular employment or, more generally, from any professional activity;
  • replacement income payable under Luxembourg or foreign law (financial benefits in case of illness, maternity, unemployment, work-related accidents/illness, parental leave allowance, etc.);
  • income from movable and non-movable assets (rental payments, land rent, occupation rights, usufruct, and so on);
  • pensions and annuities;
  • benefits or provisions received from a public or private organisation (with the exception of family benefits, the back-to-school allowance and the allowance for the birth of a child);
  • maintenance/support payments.

A bank account identification document for the main applicant must be included with the application.

Note that when applying for the cost-of-living benefit for 2019, it is not necessary to provide proof of payment of any other FNS benefits.

Incomplete applications will be returned to the applicant by post.

The applicant will then have 30 days to complete their application, failing which the benefit will be denied. The postmark serves as proof of the date.

The application for the cost-of-living benefit must be signed by all persons of legal age in the household, or by their legal representative. In the event where it is the legal representative who applies for the cost-of-living benefit , a copy of the judicial decision appointing the person as being the legal representative must also be provided.

It must be noted that the National Solidarity Fund (FNS) may request any information or additional document in order to process the application. In such a case, the applicant has 30 days to forward the requested information or document and the postmark will serve as proof of the date. If the deadline of 30 days is not respected, the cost-of-living benefit will be denied.

Total annual income threshold

For the application to be accepted, the household's total annual income must not exceed a certain limit.

Total annual income is estimated over a reference period taken as the 12 months preceding the submission of the application.

It should be noted that this income limit is raised for each additional person living in the household.

The annual income limits are adjusted annually in line with the application score (or index) on 1 January of the current year, and with any variations in the social minimum wage.

Note, however, that a reduced benefit may be paid even if the applicant's household exceeds the gross monthly income limit.

Amount of the cost-of-living benefit

The amount of the benefit is determined on the basis of the applicant's household composition.

If the reduced benefit is paid, the amount is determined by calculating the difference between:

  • the amount of the cost-of-living benefit that would normally be paid to an applicant in a comparable situation; and
  • the portion of the annual income which exceeds the total annual income threshold.

The benefit is awarded only once per calendar year. It is exempt from taxes and social security contributions. The benefit is non-transferable, it cannot be pledged or seized.

If the applicant owes a certain sum of money to the FNS, a deduction of up to half the amount of the cost-of-living benefit may be made to recover the money owing.

Review of the file

If the FNS finds that during the reference period used to calculate the cost-of-living benefit, the beneficiary household had financial resources at their disposal which ought to have been taken into account when calculating the benefit amount, the overpayments of amounts paid by the FNS must be repaid to the FNS.

Sanctions

Applicants who received the cost-of-living benefit because they concealed important facts or because they made false or erroneous statements, are under the obligation to repay to the FNS any amount unduly received.

Disputes

The FNS can only claim the repayment of funds after hearing the applicant or the beneficiaries, either orally or in writing.

Decisions handed down by the President of the FNS regarding the granting or denial of the cost-of-living benefit may be appealed.

The appeal must be filed with the Steering Committee of the FNS within 40 days of notification of the decision to grant or deny the benefit.

The decision of the Steering Committee is final.

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