Update in progress
Early retirement for unemployed persons receiving benefits is part of the extended measure of early retirement for company restructuring, which is an unemployment prevention measure, when an employee is facing the threat of dismissal due to company restructuring or technological change.
In the case in point, this type of early retirement is intended for employees who have been dismissed (more often than not for financial reasons) and who are therefore already unemployed persons receiving benefits from the National Employment Agency (Agence pour le développement de l’emploi - ADEM).
Early retirement should not be confused with an early old-age pension under the age of 65: old-age pension falls within the scope of pension insurance, while early retirement, limited to a term of 3 years, is a mechanism to prevent unemployment. Early retirement is therefore considered as years of national insurance contributions that count toward the old-age pension.
Who is concerned
This measure applies to resident private-sector workers, in receipt of full unemployment benefit from the ADEM, who:
- have been the victims of collective redundancy;
- have been dismissed for reasons not related to the individual worker;
- have had their working relationship terminated due to employer bankruptcy;
- meet the conditions of individual entitlement to early retirement during periods in receipt of full unemployment benefit.
Cross-border workers previously employed in Luxembourg and who have lost their jobs cannot register with the ADEM, nor are they entitled to this type of early retirement. Consequently, they must contact the relevant administrations in their country of residence.
To qualify for early retirement for unemployed persons on benefits, salaried workers must:
- have turned 57;
- meet the eligibility criteria for either an old-age pension or an early old-age pension no later than 3 years after the acceptance of their application for early retirement;
- have been last employed by a business eligible for early retirement due to company restructuring at the time of dismissal;
- commit to not performing paid activity which (per month) exceeds half the applicable social minimum wage in a calendar year. Otherwise, they forfeit the right to the benefit.
How to proceed
How to apply
The process of applying for this type of early retirement is, in the main, similar to the process of applying for early retirement due to company restructuring. However, the contact for the unemployed person on benefits is no longer their former employer direct, but rather the ADEM.
Workers applying for early retirement for unemployed persons receiving unemployment benefits submit a written application, together with a certificate confirming their eligibility for pension rights issued by the national pension insurance fund (Caisse nationale d'assurance pension), to their ADEM guidance counsellor.
Amount of the early retirement allowance
The monthly early retirement benefit is the same as the full employment benefit received by the salaried workers in question prior to taking early retirement.
The benefit is paid by the Employment Fund (Fonds pour l’emploi) direct.
Termination of entitlement to early retirement benefit
Entitlement to early retirement benefit automatically ends:
- on the day when the old-age pension eligibility requirements are met;
- on the day when the person taking early retirement meets the qualifying conditions for an early old-age pension beyond the age of 60;
- in any event, on the day when the person entering early retirement becomes eligible, at their request, for an early old-age pension or a disability pension;
- on the day when the person taking early retirement dies;
- on the day when the beneficiary starts, or returns to, an activity that, over a calendar year, earns them more than half the applicable social minimum wage, on a monthly basis.
Appeals against decisions on entitlement to early retirement may be brought before the Social Insurance Appeals Board (Conseil supérieur des assurances sociales - CASS).
A simple request on plain paper submitted to the CASS is sufficient to lodge an appeal.