SITUATION: CORONAVIRUS / COVID-19
ADEM has simplified their procedure for registration and application for unemployment benefits with ADEM. Workers who lose their job due to the consequences of the COVID-19 pandemic are requested to complete the online form made available on ADEM's website: https://adem.public.lu/en/support/inscription.html.
In the context of the Covid-19 crisis, different measures have been implemented in favour of job seekers and businesses having concluded job reintegration or initiation contracts.
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
The full unemployment benefit may be claimed by an unemployed person who is resident in Luxembourg and is registered as a job seeker with the National Employment Agency (Agence pour le développement de l'emploi - ADEM) and who:
- previously held a full-time or part-time job (provided they worked at least 16 hours per week with the same employer);
- was previously employed by several employers (provided that they lost one or more jobs totalling at least 16 work hours per week within one month, and the remaining income is less than 150% of the minimum social wage for unskilled workers), had been under a declaration of internal redeployment and where the contract has ceased automatically (provided that the first redeployment decision relates to one or more jobs with a total of at least 16 hours per week, and that the remaining income is less than 150% of the minimum social wage for unskilled workers).
General terms and conditions
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 Luxembourg:
- be aged between 16 and 64;
- be fit for work, available for the labour market and be ready to accept any suitable job (according to criteria of pay, physical and mental fitness, daily commute, family situation, working conditions, etc.);
- 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 job seeker.
- hold the position of manager, director, managing director or head of day-to-day management in a company;
- be the holder of a business permit.
Additional conditions in the event of a project to start or take over a business
Job seekers wishing to start or take over a business are also subject to specific conditions:
- they must not have been a shareholder of the business;
- they must hold the majority of the capital following the creation or the takeover of the business.
This request for consent to create or take over a business must be carried out at the latest before the end of the 6th month of unemployment benefits, and must be accompanied by:
- a business plan;
- a financing plan;
- a certificate from the Ministry of the Economy stating that the request meets the conditions for the issue of a business permit.
Conditions in case of dismissal for serious misconduct or resignation
Workers dismissed for serious misconduct or those who have resigned, in principle, are not entitled to unemployment benefit.
However, they may provisionally apply for full unemployment benefits by way of a request for interim relief to the competent Labour Tribunal, in case of:
- dismissal for serious misconduct;
- dismissal for sexual harrassment;
- resignation for serious reasons following acts or facts of the employer.
In this case, the allowances can only be granted for a period of 182 calendar days. This period can be extended without exceeding 365 days in total.
Should the petition be rejected, the worker must reimburse the Employment Fund the full amount of the sums received as unemployment benefit. They will also have to reimburse the indemnities affected if they voluntarily waive (withdrawal) the proceedings while the procedure is ongoing. If the withdrawal results from an settlement between the former employee and the former employer, the benefits paid have to be reimbursed to the Employment Fund to the tune of 50 % each.
The claimant must claim full unemployment benefits from the Full Unemployment Benefit Department within 2 weeks after registering with the ADEM as a job seeker.
How to proceed
Filing an application for full unemployment benefits
- the letter of dismissal, resignation and/or petition lodged with the competent labour tribunal, and/or their employment contract;
- copies of their last 6 payslips.
The relevant agent at ADEM will provide the job seeker with a number of forms to fill in, in particular:
- a full unemployment benefits application form;
- a declaration of income form;
- if possible a certificate of employment (to be completed by the former employer).
Once all these documents have been collected, the relevant agent at the ADEM will examine the application for full unemployment benefit, and will handle the case from that point forward.
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.
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 3 months prior to losing their job. Under certain conditions, the 3-month period may be extended to 6 months maximum.
Sickness benefits as well as the standard gratuities and premiums are also included in the calculation of unemployment benefits, except for overtime wages, bonuses and allowances for incidental expenses.
However, the ADEM does not take into account the provision of a leased company car when calculating the unemployment benefit unless:
- the provision of the leased car was an integral part of the worker's employment contract;
- the social contributions are paid to the Joint Social Security Centre (Centre commun de la sécurité social - CCSS) on the amount representing the provision of the company car.
Where applicable, the 13th month received by the worker is not taken into account when 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 person has one or more children for whom he or she is granted a tax relief.
Unemployment benefits are capped and can not be higher than 2.5 times the social minimum wage.
The cap is lowered as the benefit continues to be paid out over time. Thus, if the duration of unemployment exceeds 182 calendar days in one year, the cap on unemployment benefits is lowered to 2 times the social minimum wage.
Unemployment benefits are adjusted according to changes in the cost of living (index).
Period of benefit entitlement
In principle, the duration of the payment of unemployment benefits is equal to the duration of work, in whole months, during the period taken as a reference for the calculation.
The working days that exceed a month are counted as a whole month (example: a person has 184 days of work. Six months of work equal 182 days. The remaining 2 days of work (184-182=2 days) are rounded to the whole month: they then correspond to a 7th month of compensation.)
Any unemployed person meeting the acceptance conditions may be entitled to unemployment benefit for a maximum of 12 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 50 years of age having worked for 20 years:+ 6 months;
- 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 work 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;
Compensation is no longer paid:
- 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.
The unemployment benefit is suspended if the beneficiary:
- collects a professional tideover allowance; or
- has requested and obtained the exemption from their obligations to report to ADEM for a maximum period of 25 working days.
In order to receive the 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 situtation.
Job seekers who receive benefits may be exempted from going to see their counsellor for a maximum of 25 working days a year, at a rate of 1/12th per month of registration as a job seeker. The job seeker must request this exemption from the ADEM.
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 .
The director of the ADEM may then decide to temporarily or permanently withdraw the full unemployment benefit.
- 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 legitimate reason;
- if the unemployed person makes no effort to actively seek an appropriate job.
Moreover, if the unemployed person who is being compensated does not show up at ADEM and has no valid excuse, sanctions can be applied, ranging from 7 days of loss of benefits to 30 days in case of recidivism, up to the permanent suspension of unemployment benefits.
If the unemployed person in receipt of benefit has provided false information or misrepresentations in order to receive unemployment benefits, said benefits may have to be repaid to ADEM.