Re-employment aid

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Purpose

When taking up a new job with a lower level of remuneration than the previous job, re-employment aid aims to guarantee the beneficiary (employee), taking into account the new remuneration received, a maximum annual remuneration equal to 90% of their previous remuneration during the first 48 months of the new employment, the previous salary being capped at 3.5 times the social minimum wage for unskilled workers.

However, the amount of re-employment aid may not exceed half of the gross salary paid by the new employer and the granting of the aid will be limited to the duration of the employment relationship in the company for which the aid was granted.

Beneficiaries

  • Employees who voluntarily left a company facing structural or cyclical economic difficulties
  • Employees who are subject to, or immediately threatened with, dismissal for economic reasons
  • Employees dismissed as part of recovery, reorganisation or restructuring measures involving job cuts
  • Employees who lose their job due to a declaration of bankruptcy, a court decision ordering compulsory liquidation, the physical incapacity or the death of the employer
    • In all cases listed above, the staff of the original company must have been declared eligible by the Minister responsible for employment, who decides on the application of any interested party.
    • In all cases listed above, the employee must have worked legally in Luxembourg under an employment contract during the 24 months immediately preceding their departure from the original company.
  • Jobseekers receiving unemployment benefits
    • Jobseekers receiving unemployment benefits who are at least 45 years of age, have been registered continuously with the ADEM for at least one month and have worked legally and continuously as employees in Luxembourg during the 24 months immediately preceding their registration with the ADEM.
    • The vacancy must have been notified to the ADEM by the employer beforehand.

Conditions relating to the employment contract

The beneficiary must be employed under:

  • A permanent employment contract
  • A fixed-term employment contract with an initial duration of at least 18 months
  • A fixed-term contract to replace an employee who is temporarily absent due to the exercise of their right to parental leave

The aid is not due if:

  • The employee is not insured as an employee with the Luxembourg social security institutions.
  • The employee has not been declared fit for the position by the occupational health physician.
  • The employee receives an early old-age pension, an old-age pension, a waiting allowance, a professional waiting allowance or a full pension.
  • The employee is the holder of the business permit of the company by which they are employed.
  • The employee acts as manager, director, managing director responsible for the day-to-day management of the company or non-profit organisation by which they are employed.
  • The employee holds a stake in the unlisted company by which they are employed.
  • The employee worked for the company or the economic and social entity within the meaning of Article L.161-2, paragraph 2 during the five years preceding the employment relationship for which re-employment aid is requested.
  • If the spouse, partner within the meaning of the amended law of 9 July 2004 on the legal effects of certain partnerships, or one or more relatives or relatives by marriage up to and including the second degree:
    • hold the majority of the capital of the company by which the beneficiary is employed
    • held, at any time during the two years preceding the conclusion of the employment contract, the majority of the shares or units in the capital of the company by which the beneficiary is employed

Deadline

The application must be submitted by the beneficiary, under penalty of foreclosure, within three months of taking up employment with the new employer.

Legal basis

Law of 8 April 2018 amending: 1) the Labour Code; 2) the amended law of 24 December 1996 introducing an income tax credit for the recruitment of unemployed persons; 3) the amended law of 12 September 2003 on disabled persons.

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