Sponsored content by Simône van Schouwenburg – Business Development ING Expat Services • Insights •Expat Corner• 02.10.2018
When you are fired or there is the unexpected end of your contract or you stop your business activities because of bankruptcy or other reasons, what happens next? Do you have the right to claim unemployment benefits? What are the procedures? Before answering these questions, let’s start from the beginning.
Whatever you are an unemployed looking for a job or a self-employed worker, the first thing you must do is to enrol as a job seeker with one of the placement offices of the National Employment Agency (Agence pour le développement de l’emploi – ADEM). The ADEM has 7 regional agencies in Luxembourg, Esch-sur-Alzette, Diekirch, Differdange, Dudelange, Wasserbillig and Wiltz. The enrolment becomes effective when you make your first interview with the job counsellor in charge of assisting you in your job-hunting efforts. If you reside and work abroad, you may only register with the Luxembourg City agency of the ADEM. In this case, you are not entitled to guidance and support by an ADEM counsellor, nor to the ADEM’s other services. You can only consult job offers on the terminals provided for that purpose.
Applying for unemployment benefits as a Luxembourg resident
This is the second step. You may claim full unemployment benefits provided that you fulfil the following requirements: be unemployed against your will, be resident in Luxembourg (at the time of notification of dismissal in the case of a permanent employment contract or at least 6 months prior to the end of the contract in the case of a fixed-term employment contract), be aged between 18 and 64 and be fit to work, available and willing to accept any appropriate job. If you have left your job without a valid reason or by mutual consent, have resigned or have been dismissed for serious misconduct, you are not entitled to unemployment benefits.
As a self-employed, you may also claim full employment benefits if you have had to stop your activities because of economic and financial difficulties, for medical reasons, due to the actions of a third party or for reasons of force majeure. In addition, you must have worked on a self-employed basis for at least 6 months prior to your enrolment as a job seeker and have been registered with the Luxembourg social security institutions for at least 2 years (as an employee and/or as a self-employed).
What happens if you are not a Luxembourg resident?
In this case, you are considered a cross-border worker. You can enrol as a job seeker with the ADEM and you will be assisted and supported in your job search in Luxembourg by experienced advisers BUT you will not receive financial assistance in Luxembourg. You must contact the appropriate authorities in your country of residence.
In contrast, if you were a self-employed cross-border worker and you have carried out your professional activities only in Luxembourg, you may, under certain conditions, qualify for unemployment benefits. You must meet the same requirements as for a self-employed resident in Luxembourg AND reside in one of the following countries: Belgium, Bulgaria, Cyprus, Croatia, Estonia, Latvia, Liechtenstein, Lithuania, France, Iceland, Italy, Malta, Norway and the Netherlands. Residents of the United Kingdom are also included in the list but the situation could change with the Brexit! If not, you must apply to the appropriate institution of your country of residence.
What is the maximum amount and how long?
The amount of your full employment benefits corresponds to 80% (or 85% if you have one or more dependent children) of your monthly gross salary received over the 3 months prior to losing your job (in certain conditions, the 3-month period is extended to 6 months maximum) and is capped at 2,5 times the social minimum wage (€ 2,048.54, increased by 20% for a skilled worker, as of August 1, 2018). After 9 months of unemployment (273 days) during a 12-month period, the cap is brought down on twice the social minimum wage.
If you are a former self-employed, you are entitled to benefits corresponding to 80% (or 85% if you have one or more dependent children) of the income used, for the past two financial years, as the contribution base to the pension fund. The minimum amount is 80% of the social minimum wage for an unskilled worker and cannot be higher than 2,5 times the social minimum wage.
In both cases, the unemployment benefit entitlement period is at most 365 days per period of 24 months. Depending on your personal situation, you can ask for an extension of the period. For instance, if you are over 50 years of age and have worked for 30 years, the period is extended to 24 months.
One piece of advice: to boost your chances to find a new job before the end of the unemployment benefit entitlement period, make the most of the services provided by the ADEM. They are free of charge and very diversified: from various workshops to employability and skill assessments. More information on www.adem.lu/en.