Employers who hire older unemployed people may, under certain conditions, recover the employer's share of paid up social security contributions for a certain period of time.
Who is concerned
The aid is available to any private-sector employer legally established in Luxembourg, and is provided for the purpose of employing an unemployed person of at least 45 years of age who is registered as a jobseeker with the ADEM, and who has been without a job for at least 1 month.
The requirement of being registered with ADEM does not apply if the employer is hiring a person:
- who is part of a job retention plan; or
- whose employment contract has been terminated with immediate effect following a declaration of bankruptcy of his last employer.
The employment contract offered to the jobseeker must be:
- a permanent contract, or;
- for a fixed term contract of at least 18 months; or
- for the replacement of an employee on parental leave.
The employee must be occupied for at least 16 hours per week.
The aid is due:
- if the employee:
- is fit to work;
- is enrolled as an employee with the Luxembourg social security institutions;
- is not receiving an early old-age pension, an old-age pension, a tideover allowance, a professional tideover allowance or a full annuity;
- is not the holder of the business permit for the company where they are employed;
- does not work as a manager, director or deputy-director for the day-to-day management of the company or not-for-profit organisation (ASBL) where they are employed;
- does not have an equity holding in the unlisted company where they are employed;
- has not worked for the company or the economic and social entity for the 5 years preceding the start of the working relationship;
- if the employee's spouse or registered civil partner or one or more parents or relatives up to and including second degree:
- do not hold a majority stake in the company where the employee works;
- have not held, in the 2 years preceding the establishment of the employment contract, a majority stake in the company where the employee works
The vacant position must have been declared to ADEM beforehand.
How to proceed
The refund of the social security contributions must be applied for within 6 months of the hire date. Employers are requested to file an application for aid for the re-employment of older unemployed people with ADEM. The application must be accompanied by a copy of the employment contract.
To obtain a refund of the contributions paid by the employer to the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS), the employer must file a quarterly declaration of claim with ADEM. This declaration must be accompanied by pay slips for the months in question.
Amount and duration of the aid
The employer's share of the social security contributions is reimbursed:
- for 2 years, for unemployed people aged 45 to 49 at the time of their employment;
- up to the age of retirement (awarding of an old-age pension) for unemployed people aged 50 or over at the time they were hired.
Important: If the proposed employment contract is for a fixed term (18 to 24 months), the contributions will be refunded for the contract period only.
Employers are informed that the application for recruitment aid for older unemployed workers may be submitted before obtaining the certificate of fitness for work issued by the occupational medicine service, as referred to in Article L. 541-1 paragraph (2) point 3 of the Labour Code, in order to avoid exceeding the time limit of exclusion as referred to in Article L. 541-4 paragraph 2 of the Labour Code.