Applying for unemployment benefits as a Luxembourg resident

In case of non-consensual termination of the working relationship, the person out of work can, in certain conditions, receive unemployment benefits to compensate for the loss of the primary or sole source of income. The person concerned thus becomes an unemployed person receiving unemployment benefits.

The social security contributions and taxes generally deducted from the salary are deducted from the full amount of unemployment benefit. The employment fund (Fonds pour l’emploi), for its part, substitutes for the former employer and pays the employer's share of the contributions 

Who is concerned

Provided the beneficiary fulfils the criteria to qualify for unemployment benefits and resides in the Grand Duchy of Luxembourg, the following may claim unemployment benefit:

  • employees
  • self-employed workers;
  • young people having reached the end of their training.

Preliminary steps

The application for unemployment benefits follows registration as a job seeker with the National Employment Agency (Agence pour le développement de l'emploi – ADEM).

How to proceed

Employees entitled to full unemployment benefit

Beneficiaries of full unemployment benefit

The full unemployment benefit is payable to unemployed workers:

  • who previously held a full-time job;
  • who previously held a part-time job (provided they worked at least 16 hours per week with the same employer);
  • who were previously in the service of several employers (provided they have lost one or more jobs totalling at least 16 hours per week within the space of a month, and the remaining income is less than 150 % of the social minimum wage for unskilled workers);
  • who had been the subject of an internal reclassification declaration, and whose contract has legally expired (on condition that the 1st reclassification decision pertains to one or more jobs totalling at least 16 hours per week, and the remaining income is less than 150 % of the social minimum wage for unskilled workers).

Conditions for granting of benefits

In order to be entitled to the full unemployment benefit, the unemployed person must:

  • be unemployed against their will (which excludes terminations of an employment contract by mutual consent, leaving a job without a valid reason, and resignation);
  • be resident in the territory of Luxembourg:
  • be aged between 16 and 64;
  • be fit to work, available and willing to accept any appropriate job;
  • be registered as a job seeker with the ADEM and file an application for full unemployment benefit;
  • have held one or more employment contracts for at least 26 weeks (totalling at least 16 hours' work per week) over the 12 months prior to registering with the ADEM as a jobseeker. 

Workers dismissed for serious misconduct or those who have resigned, in principle, are not entitled to unemployment benefit. However, in case of dismissal for serious misconduct or resignation for sexual harassment, they may initiate a special unemployment procedure with the relevant Labour Tribunal for their district dealing with special procedures, to provisionally obtain the right to unemployment benefit for a period of 182 calendar days, renewable once (365 days in total).

Note, however, that in order for such an application to be accepted, another unfair dismissal claim must be lodged with the same relevant Labour Tribunal. Should they lose the case, the worker must reimburse the employment fund the full amount of the sums paid as unemployment benefit.

Incapacity for work on termination of the working relationship

Employees with a temporary incapacity for work (sick leave) at the end of the working relationship do not immediately receive unemployment benefit; first, they will receive their sick pay until the end of their incapacity.

In case of sickness or maternity during the benefit period, the right to unemployment benefit is  unaffected.

Necessary procedures

Once registered as a job seeker with the ADEM, the applicant must soon afterwards (within a fortnight at the most) report to the Full Unemployment Benefit Department at the ADEM, bringing with them:

  • their letter of dismissal and/or employment contract;
  • copies of their last six payslips.

The relevant agent at ADEM will provide the job seeker with a number of forms to fill in, and specifically:

  • a full unemployment benefits application form;
  • a declaration of income form
  • a certificate of employment (to be filled in by the former employer).

Once all these documents have been filled in, the relevant agent at the ADEM will examine the application for full unemployment benefit, and will handle the case from that point forward.

Amount of benefits

Calculating the amount of benefits

The amount of full unemployment benefit is determined on the basis of the gross salary actually received by the employee over the three months prior to losing their job. In certain conditions, the 3-month period may be extended to 6 months maximum.

The receiving of a benefit in kind, such as the availability of a hire car, is, in certain circumstances, taken into account in the calculation of the unemployment benefit.

However, the ADEM does not take account of the provision of a hire car in calculating the unemployment benefit unless:

Where applicable, the 13th month received by the worker is not taken into account in calculating the gross salary serving as the basis for calculating the unemployment benefit.

The amount of the full unemployment benefit corresponds to 80 % of the worker's previous gross salary thus determined, or 85 % if the worker has one or more children.

In the case of a divorce, neither custody rights nor the payment of child support are valid criteria for awarding the rate of 85 %.
Maximum amount of benefits

The unemployment benefit is capped and can be no more than 2.5 times the social minimum wage. That cap is lowered as the benefit continues to be paid over time. In this context, we speak of a 'degressive cap': after 9 months of unemployment (273 days) during a 12-month period, the cap is brought down to twice the social minimum wage (the legislation on the benefit cap is applicable up until 31 December 2017).

An unemployed person on benefits must declare to the placement bureau any and all income from paid professional activities, whether regular or occasional, on the understanding that this income may, in certain circumstances, be compatible with full unemployment benefit.

Period of benefit entitlement

In principle, the duration of unemployment benefit payment is equal to the duration of work, in whole months, during the period taken as a reference for the calculation.

Any unemployed person meeting the acceptance conditions may be entitled to benefit for at most 365 days per period of 24 months. In certain cases, though, it is possible to obtain an extension by filing an application with the referring guidance counsellor:

  • unemployed person over 50 years of age having worked for 30 years: + 12 months;
  • unemployed person over 50 years of age having worked for 25 years: + 9 months;
  • unemployed person over 45 years of age having worked for 20 years: + 6 months (this condition remains applicable until 31 December 2017);
  • unemployed person difficult to place in employment (notably those over 55 years of age): + 6 months;
  • unemployed person having been assigned to internships or courses: + 6 months;
  • unemployed person having been assigned to public-service works: for a period of time which is equal to the effective duration of the public-service works carried out during the period of benefit payments;
  • unemployed having completed professionalisation training: if no subsequent recruitment is taking place, the right to full employment benefits is extended for a period corresponding to the effective duration of the professionalisation training;
  • unemployed person receiving unemployment benefits who was dismissed by a company on short-time work for at least 6 months at the time of dismissal: + 6 months (this condition remains applicable until 31 December 2017);
  • unemployed person receiving unemployment benefits who lost their job following termination of the employer's business (through death, physical incapacity or bankruptcy): + 6 months (this condition remains applicable until 31 December 2017);

Rights and obligations

In order to receive unemployment benefit, the unemployed persons in receipt of it must:

  • report at the dates and times specified by the referring guidance counsellor at the ADEM, or report to the ADEM at least once a month, if no meeting is scheduled;
  • immediately inform the referring guidance counsellor of any change in their personal status.

Otherwise, the ADEM may apply sanctions ranging from 7 days' suspension to delisting from the unemployment benefit register, unless the recipient has given the referring guidance counsellor prior warning, and has been exempted from reporting in(to travel abroad, go on a training course, etc.). 

Note that the maximum duration of the authorised exemption is 25 days per year. The full unemployment benefit is suspended during that period. On the first working day after their period of unavailability, the unemployed person must meet with the referring guidance counsellor.

End of rights

The right to unemployment benefit expires:

  • when the set limits for the duration of payment are reached;
  • when one or more conditions for granting the benefit are no longer fulfilled;
  • when the recipient passes the age limit of 65;
  • if the recipient turns down an appropriate job without a legitimate reason;
  • if the recipient refuses to take part in internships, courses or public service works assigned by the ADEM without a legitimate reason;
  • if the unemployed person makes no effort to actively seek an appropriate job.
The director of the ADEM may then decide to temporarily or permanently withdraw the full unemployment benefit.

Young workers entitled to full unemployment benefit

Beneficiaries of full unemployment benefit

The following may receive full unemployment benefit:

  • young workers who have completed a cycle of full-time study;
  • young workers who have given up their studies before completion;
  • full-time trainees/apprentices who have not found a job at the end of the training contract.

Full details on the granting of full unemployment benefit for young people can be found on the ADEM website.

Conditions for granting of benefits

In order to be entitled to the full unemployment benefit, the young person must be:

  • resident in Luxembourg;
  • fit to work;
  • willing to accept any appropriate job offered by the ADEM.

Benefits will be granted based on the conditions in the following table:

Qualifications

Age

Rights

No qualification less than 21 years unemployment benefits provided the candidate has been registered with ADEM for 6 months
No qualifications more than 21 years no unemployment benefits
Successful completion of the apprenticeship with an employer less than 23 years unemployment benefits with immediate effect
Successful completion of the school programme of the apprenticeship less than 23 years unemployment benefits provided the candidate has been registered with ADEM for 6 months
Successful completion of the apprenticeship with the school programme and an employer more than 23 years no unemployment benefits
Successful completion of the secondary school diploma; less than 25 years unemployment benefits provided the candidate has been registered with ADEM for 6 months
Successful completion of the secondary school diploma more than 25 years no unemployment benefits
Successful completion of 4 academic years (Master I) less than 28 years unemployment benefits provided the candidate has been registered with ADEM for 6 months
Successful completion of 4 academic years (Master I) more than 28 years no unemployment benefits
Abandonment of university studies less than 25 years unemployment benefits with immediate effect


Note that no benefit at all will be paid in the following cases:
  • termination of a job or an apprenticeship contract without a valid reason ;
  • termination of an apprenticeship contract or internship contract for serious misconduct;
  • dismissal for serious reasons.

Necessary procedures

The young job seeker must register as a job seeker with the ADEM.

The ADEM has implemented a system for monitoring job seekers to facilitate their reintegration into the world of work. The CV / Cover Letter Guide has been written to help these job seekers prepare the documents required for any recruitment interview.

Start of unemployment benefit payments

Unemployment benefit payments begin 26 weeks after registering as a job seeker, for young people:

  • who have been in full-time education for nine or more years, or;
  • who have completed professional training courses/ internships, or in-company training courses organised by the ADEM.

If the training is abandoned before completion of a year of study, the period taken into account in the calculations only begins six months after the end of the school year.

Amount of benefits

The benefit amount is set at:

  • 40 % of the social minimum wage for adolescents of 16 and 17 years of age, or who failed the final apprenticeship examination;
  • 70 % of the social minimum wage for other young people.

End of rights

The right to unemployment benefit expires:

  • when the set limits for the duration of payment are reached;
  • when one or more conditions for granting the benefit are no longer fulfilled;
  • if the recipient turns down an appropriate job without a valid reason;
  • if the recipient refuses to take part in internships, courses or public service works assigned by the ADEM without a valid reason;

Self-employed workers entitled to full unemployment benefit

Beneficiaries of full unemployment benefit

Full unemployment benefit may be claimed by self-employed workers who have had to discontinue their activity:

  • because of economic and financial difficulties;
  • for medical reasons;
  • due to the actions of a third party;
  • for reasons of force majeure;

Conditions for granting of benefits

 In order to be entitled to full unemployment benefit, the self-employed worker must:

  • be registered as a job seeker with the ADEM and have worked on a self-employed basis for at least 6 months prior to registering;
  • without exception, have been registered with the Luxembourg social security institutions for at least 2 years (as an employee or as a self-employed worker);
  • be resident in Luxembourg at the time of cessation of activity;
  • be aged between 16 and 64;
  • have worked on a self-employed basis for at least 6 months before registering as a job seeker;
  • be fit to work, available for work and willing to accept any appropriate job.

Necessary procedures

An unemployed former self-employed worker must register as a job seeker with the ADEM.

Amount of benefits

In case of acceptance for full unemployment benefit, a former self-employed worker is entitled to:

  • a benefit corresponding to 80 % of the income used, for the past two financial years, as the earnings base subject to contributions to the pension fund or;
  • a benefit corresponding to 85 % if the worker has one or more dependent children.

In the case of a divorce, neither custody rights nor the payment of child support are valid criteria for awarding the rate of 85 %.

The minimum amount of the benefit is 80 % of the social minimum wage for an unskilled worker. It cannot be any higher than 2.5 times the social minimum wage.

If the self-employed worker has not fulfilled their obligations in terms of payment of social contributions, the unemployment benefits is taken as 80 % (or, where applicable, 85 %) of the social minimum wage for a skilled worker. However, the former self-employed worker whose unemployment benefit is based on provisional chargeable earnings prior to the establishment of the definitive earned income may, if necessary, apply for an adjustment of the benefit after recalculation of the definitive social contributions by the CCSS.

Period of benefit entitlement

The unemployment benefits paid to the unemployed former self-employed worker are due, in principle, for a period of 12 months over a period of 24 months (although several types of extension may be applied, depending on the case).

End of rights

The right to unemployment benefit expires:

  • when the set limits for the duration of payment are reached;
  • when one or more conditions for granting the benefit are no longer fulfilled;
  • if the recipient turns down an appropriate job;
  • if the recipient refuses to take part in internships, courses or public service works assigned by the ADEM without a valid reason;

Contesting the denial or withdrawal of unemployment benefit

When the director of the ADEM decides to deny the job seeker the full unemployment benefit, or to withdraw the benefit from the job seeker, the latter may lodge a request for reassessment with the Special Reassessment Committee (Commission spéciale de réexamen – CSR).

The CSR is made up of:

  • three full members representing employers;
  • three full members representing employees, appointed by the Minister for Labour and Employment.

An unemployed person on benefits may lodge a request for reassessment with the CSR by registered letter within 40 days of the notification of the decision by the director of the ADEM.

If the job seeker is not satisfied with the response of the CSR, they may lodge an appeal by simple request on plain paper, submitted in duplicate to the Council of Arbitration of Social Security (Conseil arbitral de la sécurité sociale – CASS) within 40 days of notification of the decision being challenged.

Should they also wish to appeal the decision of the CASS, the unemployed person on benefits may again appeal by request, submitted in duplicate to the High Council of Social Security (CSSS) within 40 days of notification of the CASS' decision. The decision handed down by the CSSS may be appealed before the Court of Appeal.

The request lodged with the CASS and/or CSSS must briefly indicate the arguments upon which the appeal is based. Referrals to the social security jurisdictions are non-suspensive, meaning that the decision of the CSR continues to apply throughout the whole of the subsequent procedure.

Change of status during the period of unemployment

In specific situations, such as illness, travel abroad, absence for personal reasons, training, or the acceptance of a part-time or temporary job, the job-seeker in receipt of benefit must inform the relevant guidance counsellor at the ADEM, observing the following requirements:

  • in case of incapacity for work, the job seeker on benefits must provide a certificate of incapacity;
  • for a stay abroad or an absence, a request for leave must be signed and approved before departure;
  • if the job seeker on benefits engages in part-time or temporary work, they must provide a copy of the temporary assignment contract;
  • in case of training, the job seeker on benefits must provide the certificate of registration for the training course .

If the period of temporary occupation is between one week and one calendar month, the file is suspended and then reactivated at the end of the temporary period. The job seeker must inform the guidance counsellor of the temporary position and, whenever possible, provide a copy of the assignment contract.

Who to contact

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