Employees under the age of 65 may receive a disability pension to support themselves if they are unable to perform the job they were last employed to do, or any other job that is compatible with their strength or abilities.
If the employee was registered with a social security system in another country, they will receive, from that country, a pension proportional to the length of time they were registered in that country, provided that the disability recognised in Luxembourg is also recognised in the other country.
Disability pensions may be paid for a specified period of time (temporary disability) or an indefinite period of time (permanent disability).
Who is concerned
Any insured person with a disability, where 'disability' is considered as a loss of capacity to work preventing the person from performing the job they were last employed to do, or any other job that is compatible with their strength or abilities.
Employees residing in France, Belgium or Germany may also receive a disability pension. Applications will be examined by the relevant Luxembourg pension fund, which will contact the relevant pension authority in the employee's country of residence if the employee is also eligible for a pension in their country of residence.
Self-employed workers who have been making pension contributions are also entitled to benefits under the social protection scheme that covers disability.
A disability may occur due to: long-term illness, infirmity, accident (at work or elsewhere), (premature) wear and tear of the body, incurable disease, or occupational or non-occupational disease.
Disability status is determined on the basis of an opinion issued by the Social Security Medical Board.
The criteria for receiving a disability pension are as follows:
- the worker is under 65 years of age;
- disability status has been recognised by the Social Security Medical Board;
- the worker must provide proof that they have had insurance coverage for at least 12 months during the three years prior to the date of disability (as determined by the Social Security Medical Board) or the date of expiry of the sickness benefit. This reference period may be extended when it overlaps with similar periods (education of children, professional training, etc.) and with periods during which the person received the guaranteed minimum income or the income for severely disabled people. However, no minimum period of coverage is required if the disability is due to an accident (of any kind) or to a recognised occupational illness which occurred during the coverage period;
- public sector employees are entitled to a disability pension after one year of service regardless of their age if, due to a physical disability, it has been established that they cannot return to work;
- the employee must cease any non-salaried activity subject to insurance, that is to say, any activity whose professional income exceeds one third of the social minimum wage per year. The beneficiary's disability pension will be suspended if self-employed activity is performed by others on their behalf;
- disability pension beneficiaries under the age of 50 may be required to take the rehabilitation or retraining courses prescribed by the pension fund as suggested by the Social Security Medical Board.
The review of a pension application includes all of the steps required to check and process the application. How long the review takes depends on the availability and reliability of basic data, which means that it can vary greatly from one application to another.
If the pension authority has all of the medical and administrative documents, processing will take no more than 4 to 6 weeks. On the other hand, if information needs to be compiled from sources abroad, the review may take several months.
When the review is completed, the pension is either approved or rejected in a decision which may be appealed.
How to proceed
How to apply for a disability pension
Disability pensions are granted only if applied for. The Social Security Medical Board (Contrôle médical de la sécurité sociale - CMSS) gives its opinion on the level of disability of the employee based on a medical report produced by the attending physician. The applicant's personal situation determines the procedure that will be followed when the application is submitted:
- if the applicant has just stopped working for health reasons or already stopped some time ago, the application for a disability pension is filed directly with the National Pension Insurance Fund (Caisse nationale d'assurance pension - CNAP) ;
- if the person concerned benefits from unemployment benefit, they have to complete and submit the pension application to the CNAP directly;
- if the employee was registered with the social security system in another country, they will receive, from that country, a pension proportional to the length of time they were registered in that country, provided that the disability recognised in Luxembourg is also recognised in the other country.
The same disability pension application form can be used by all insured individuals, regardless of their socio-professional status.
Disability following an occupational accident
The insured must submit their application to two separate bodies, namely the Accident Insurance Association (Association d'assurance contre les accidents - AAA) and the appropriate pension fund. Therefore, they must:
- apply for an accident pension with the AAA;
- apply for a disability pension from the relevant pension fund.
If the disability is due to a work accident, there is no need to enclose a medical certificate since the outcome of the medical examination is based on the file created following the accident.
Special case: non-resident workers
Pension applications are generally to be presented in the applicant's country of residence. Employees last employed in Luxembourg and living in France, Belgium or Germany are the exception to this rule.
If they are entitled to sickness benefits from a Luxembourg health insurance fund, cross-border workers may apply for a disability pension from the Luxembourg pension fund.
If a cross-border worker also makes social security contributions in their country of residence, the Luxembourg pension fund will contact the relevant pension authority in the employee's country of residence to review the pension rights in that country.
If the insured is a citizen of a Member State of the European Union (EU), insurance periods completed in another Member State are included when determining the conditions for granting benefits in Luxembourg. This means that a worker can apply for a pension in all of the EU countries where they worked. The appropriate funds will pay a pension proportional to the period of work completed in the country of application.
These conditions also apply to Switzerland, Iceland, Liechtenstein, and Norway, and in the case of agreements concluded with third-party countries.
Luxembourg has concluded bilateral social security agreements with countries such as Brazil, Canada, Cape Verde, Chile, Croatia, the Republic of North Macedonia, Quebec, Tunisia, the USA, and Turkey.
Start of disability pension
The disability pension begins on the first day that the disability is established, and the worker must provide proof that they have had insurance coverage for at least 12 months during the three years prior to the date of disability (as determined by the Social Security Medical Board), or as of the expiry of the sickness benefit.
Temporary disability pension
If the disability is of a temporary nature, the pension starts when the entitlement to sickness benefits expires or, if no such entitlement exists, when an uninterrupted period of disability of 6 months expires.
A disability pension is not granted for any periods occurring more than one year prior to receipt of the application.
If a pension has already been granted for a limited period, it is granted again in the case of relapse from the first day of the new disability period, for as long as the entitlement to the sickness benefit has not been re-established.
Permanent disability pension
Payment of a permanent disability pension begins on the first day on which the disability is established and, at the earliest, once all the conditions of allocation have been met. This means that:
- if the insured is self-employed, the pension will not be paid until they stop working;
- if the insured continues to receive compensation for work performed before the period of disability, payment of the pension does not begin until the day on which compensation stops;
- if the insured has received sickness benefits from a non-Luxembourg health insurance scheme, the disability pension will not be paid until the entitlement to such benefits expires;
- if the date on which the disability begins cannot be established, the date on which the application for the pension was received by one of the appropriate authorities will be used;
- for the period during which the beneficiary of the pension also received a sickness benefit in their capacity as an employee, the disability pension is paid to the appropriate health insurance fund, which forwards any difference to the beneficiary.
Conversion of a disability pension into an old-age pension
When beneficiaries reach the age of 65, all current disability pensions are automatically converted into old-age pensions. No action is required by the beneficiary.
Payment of disability benefits
Disability pensions are paid monthly in advance, and cease to be paid at the end of the month of the beneficiary's death. Payments are made by transfer to the beneficiary's bank account. Any fees are borne by the beneficiary.
In the event of the death of the beneficiary:
- Pension over-payments in the months following the death must be reimbursed;
- Outstanding pension payments for periods prior to death are paid to the surviving spouse or partner or, if none exists, to ascendants and descendants up to the second degree (children, grandchildren, parents, grandparents). If there are no relatives, benefits revert to the fund.
Anti-overlap provisions are applicable in two scenarios:
Concurrent receipt of a disability pension and work
If the insured is self-employed, their activity cannot generate more than one third of the social minimum wage in income. If the insured is self-employed, they must apply to the Joint Social Security Centre for an exemption from contributions.
The insured is allowed to resume part-time employment, subject to the immediate notification to the pension fund. If the individual does resumes work, the income from their job is added to the disability pension. The sum of the income from the job and the pension may not exceed a certain ceiling amount, which is calculated as the average of the 5 highest annual salaries, wages or earnings in the individual's contribution history. If the ceiling is exceeded, the pension is reduced by the amount of income exceeding the ceiling.
Moreover, on resuming work, the insured may be required to take another medical exam the outcome of which may result in the withdrawal of their pension on the grounds that the conditions of disability are no longer being met.
Concurrent receipt of a disability pension and an accident pension
If a disability (or old-age) pension is received at the same time as an accident pension, the former pension is reduced if it exceeds:
- the average of the 5 highest annual salaries, wages or earnings in the beneficiary's contribution career;
- the income taken into account to determine the accident pension.
Loss of entitlement to a disability pension
The disability pension will be withdrawn if the beneficiary:
- no longer satisfies the disability criteria;
- engages in a self-employed activity not subject to insurance contributions;
- receives compensation for work as an employee in Luxembourg or abroad that exceeds the ceiling corresponding to the average of the 5 highest annual salaries in the beneficiary's contribution history.
Disability benefits are not paid if the insured caused the disability, either intentionally or in the course of a criminal act.