Transcript Document
Major aspects of the
Luxembourg Social Security Scheme
IFCC training – June 2005
Marielle Stevenot
1
Part I
General overview of the Luxembourg
social security scheme
2
General overview of the Luxembourg social
security scheme
Legal and regulatory framework
Administrative organisation – Missions of the various
institutions
Administration principles
Financing : The social security contributions
Persons subject to the Luxembourg social security scheme
3
Legal and regulatory framework
Purpose of the social security scheme = to protect any person
against “social risks” reducing or depriving him of his income or
imposing additional charges on him.
ILO convention n° 102 : minimum risks to be covered by the
social security
-
sickness (health care)
sickness (compensation for the loss of income)
maternity
old-age
invalidity
death
work accident and occupational illness
family charges
unemployment
4
Legal and regulatory framework
Social Insurance Code (SIC)
-
Book I : Sickness – Maternity Insurance
Book II : Accident Insurance
Book III : Pension Insurance
Book IV : Common provisions
Book V : Dependency Insurance
Non-codified laws and regulations - e.g.
-
Law of 19 June 1985 on family benefits
Law of 12 February 1999 on parental leave
Law of 30 June 1976 on unemployment benefits
International instruments
-
EC Regulation n° 1408/71 on the coordination of the social
security schemes – to be replaced by EC Regulation n° 883/2004
EC Regulation n° 574/72 : implementation measures
Bi- and multilateral conventions
5
Administrative organisation and missions of the
various institutions
Development of the social security
-
by categories of social risks
by socio-professional categories
Branches
Social risks
Branches
Sickness
Maternity
Sickness-maternity
insurance
Invalidity
Old age
Death
Pension insurance
Work accident
Occupational illness
Accident insurance
Dependency
Dependency insurance
Family charges
Family benefits
Unemployment
Unemployment
6
Administrative organisation and missions of the
various institutions
Organizational flowchart : see appendix
Institutions of the sickness-maternity insurance
Union des Caisses de Maladie (UCM)
In charge of the management of the sickness-maternity insurance in
conjunction with the sickness insurance funds (“caisses de maladie”),
notably :
• fixing the annual budget
• fixing the contribution rates
• negotiating with the providers of medical services
Sickness insurance funds
• 9 funds – per socio-professional category
• in charge of paying the sickness and maternity benefits
7
Administrative organisation and missions of the
various institutions
Institutions of the pension insurance
Pension funds – per socio-professional category
Institutions of the accident insurance
Association d’assurance contre les accidents (AAA)
2 sections : industrial section and agricultural & forested section
Institutions of the dependency insurance
Union des Caisses de Maladie (UCM)
In charge of the budget and the individual decisions on the benefits
Cellule d’évaluation & d’orientation
Multidisciplinary composition
In charge of stating the dependency status and suggesting the
appropriate aids and care
8
Administrative organisation and missions of the
various institutions
Institutions for family benefits
Caisse Nationale des Prestations Familiales (CNPF)
In charge of managing and paying the family benefits
Under the supervision of the Ministry of Family
Institutions of the social assistance (minimum guaranteed income)
Fonds National de Solidarité
Institutions of the unemployment insurance
Administration de l’Emploi (ADEM)
Under the supervision of the Ministry of Employment
In charge of placing job seekers and granting unemployment benefits
9
Administrative organisation and missions of the
various institutions
Centre Commun de la Sécurité Sociale (CCSS)
In charge of:
• Organisation of the collecting and processing of data on behalf of the
various social security institutions
• Affiliation of insured persons
• Collection and recovery of social contributions
• Delivery of the social insurance card
Contrôle Médical de la Sécurité Sociale
In charge of:
• Stating work disability
• Medical examination
• Control of the prescriptions of the providers of medical services
• Authorising the reimbursement of specific treatments.
10
Administrative organisation and missions of the
various institutions
Inspection Générale de la Sécurité Sociale (IGSS)
In charge of the control on the whole social security system, e.g. :
• Give opinion on parliamentary bills related to social security
• Collect statistics
• Liaise with international and European institutions in relation with the
social security conventions and regulations
• Control of the management of the sickness-maternity insurance
11
Administrative organisation and missions of the
various institutions
Jurisdiction
Prior administrative claim to the relevant institution in most cases
Conseil Arbitral des Assurances Sociales (CAAS)
Competent for settling disputes relating to affiliation, subjection to
social security, contributions, benefits and administrative penalties
Composition : 1 President and 2 delegates of the relevant sickness
insurance fund
Conseil Supérieur des Assurances Sociales (CSAS)
Appeal against the judgments of the CAAS
Composition : 1 President, 2 assessors appointed among professional
judges and 2 delegates of the relevant sickness insurance fund.
Cour de Cassation
12
Administration principles
Administrative and financial autonomy
• Social security institutions have the legal personality
• Own patrimony to cover its obligations – Own budget
• Under the supervision of the competent ministry
Management by social partners
Management of the institutions by elected bodies, consisting of
representatives of the employers and the insured persons (for the
employees’ schemes) or of representatives of the insured persons only
(for the self-employed schemes)
13
Financing – The social security contributions
Sources
• Contributions on the part of the insured persons and their
employers (equal division)
• State subsidies
Rates
• Independent from the individual situation
• Vary according to the risk covered and the socio-professional
category concerned
14
Financing – The social security contributions
Rates (2005) - Employees
Branches
Total rate
Insured person
Employer
Blue c.
White c.
Blue c.
White c.
Blue c.
White c.
10.10%
5.60%
5.05%
2.80%
5.05%
2.80%
State
Sickness
Pension
24%
Accident
0.61 - 6%
Family benefits
1.70%
Dependency
1%
Unemployment
8%
8%
8%
0.61 - 6%
1.70%
1%
subsidies
Financing through taxation
15
Financing – The social security contributions
Basis of contributions
• Professional income
- For employees:
the gross salary, including all benefits in kind but
excluding occasional benefits and gratifications
administrative practice
- For self-employed:
the net income in the meaning of the tax law
• Replacement income
16
Financing – The social security contributions
Basis of contributions
• Minimum basis of contributions
= minimum social salary (MSS) EUR 1,466.77 per month
(index 636.26)
- pro rata calculation for part-time workers
• Maximum basis of contributions
= 5* MSS EUR 7,333.85 per month (index 636.26)
- pro rata calculation when insurance period does not cover the
whole calendar year
• Contributions of the dependency insurance
- Professional income - no minimum nor maximum
- For employees, deduction of a quarter of the MSS
- Patrimonial income
17
Persons subject to the Luxembourg social
security scheme
Mandatory insurance
• No common principle for all branches
• General rule :
- Any person exercising a professional activity
- Employee, self-employed, civil servant
• Other cases :
- Sickness-maternity insurance : beneficiaries of a replacement
income (e.g. unemployed, beneficiaries of the minimum
guaranteed income, pensioner, …) / students
- Accident insurance : e.g. students
- Family benefits / Unemployment : anyone who fulfils the legal
conditions
• Principle of single affiliation – in the case of exercise of various
activities, affiliation to the scheme of the main activity
18
Persons subject to the Luxembourg social
security scheme
Mandatory insurance
• Specific issue : affiliation of the managers and directors of
companies in the employee or the self-employed scheme?
- Manager of Sàrl is affiliated as self-employed if:
- he holds more than 25% of the shares and,
- he holds the business licence for the company
- Managing director of S.A. is affiliated as self-employed if :
- he holds the business licence for the company
- Director of S.A. is affiliated as self-employed
- All other cases : affiliation in the employee scheme
19
Persons subject to the Luxembourg social
security scheme
Voluntary insurance
Sickness-maternity insurance
• Continued insurance
- For Luxembourg resident losing his status of insured person
- Request to be made to the CCSS within 6 months following
the end of the mandatory insurance
• Optional insurance
- For Luxembourg residents who may not otherwise benefit of
the sickness insurance
- Request to be made to the CCSS
- Entitlement to benefits only after a waiting period of 3
months
20
Persons subject to the Luxembourg social
security scheme
Voluntary insurance
Pension insurance
• Continued insurance
- For Luxembourg resident losing his status of insured person
- Condition : at least 12 months of mandatory insurance within the 3
years preceding the loss of the status
- Request to be made to the CCSS within 6 months following the end of
the mandatory insurance
• Optional insurance
- For Luxembourg residents who do not exercise any professional
activity for family reasons
- Condition : at least 12 months of mandatory insurance
- Request to be made to the CCSS upon agreement of the Contrôle
Médical de la Sécurité Sociale
• Retroactive purchase of insurance periods
- Same conditions than optional insurance but no agreement of the
Contrôle Médical needed
21
Persons subject to the Luxembourg social
security scheme
Exemption
• Persons exercising their professional activity occasionally for a
determined period of maximum 3 months per calendar year
• Persons affiliated to a foreign social security scheme and exercising
their activity in Luxembourg for max. one year (possible extensions) –
cf. European and bilateral conventions
• Persons exercising a self-employed activity whose income does not
exceed one third of the minimum social salary
Outbound secondment
• Persons normally occupied in Luxembourg and temporarily seconded
abroad by their employer remain subject to the Luxembourg social
security scheme – cf. European and bilateral conventions
22
Part II
The various benefits under the Luxembourg
social security scheme
23
The various benefits under the Luxembourg
social security scheme
Sickness benefits
Maternity benefits
Dependency benefits
Work accident and occupational illness
Invalidity pension
Old-age pension
Survival pension
Family benefits
Unemployment benefits
24
Sickness benefits
Two categories of sickness benefits
Benefits in kind : Health care
Benefits in cash : Sickness allowance
Health care
Beneficiaries
the insured person
his dependents : spouse/partner, children (giving entitlement to
family allowances), parent keeping the insured’s house
25
Sickness benefits
Health care
General principles
• Free choice of the provider of medical services and supplies
• Reimbursement of medical services and supplies on the basis of
tariff lists fixed by laws, regulations and conventions concluded
with each profession of the medical sector
Medical services and supplies
• Medical and dentist care
• Stay at hospital
• Laboratory analysis
• Medicine
• Prosthesis
• Transport costs
26
Sickness benefits
Health care
Duration of the entitlement to health care benefits
• Entitlement as of the first day of affiliation (waiting period of 3
months for the optional insurance)
• Upon termination of affiliation, rights maintained for the current
month and the 3 subsequent months, if the insured person was
covered for a continuous period of 6 months immediately preceding
the end of affiliation
Modalities of payment of health care benefits
• Two modalities
- Payment by the insured person to the provider of medical
services and reimbursement by the sickness insurance fund
- “Third paying” system : costs directly borne by the sickness
insurance and payment by the insured person only of the costs
remaining at his charge
27
Sickness benefits
Health care
Modalities of payment of health care benefits
• Reimbursement rates – e.g.
- Doctor’s fees : in principle 80%
- Dentist’s fees : in principle 95%
- Medicine : 0%, 40%, 80% or 100% depending on the type of
medicine
• Insurance card – must be produced in order to get health care
Sanctions in case of abuse
28
Sickness benefits
Health care
Health care provided abroad
• Direct payment of costs by the Luxembourg sickness insurance
- In case of emergency treatment
- Upon prior authorisation (E112 form) – according to the tariff of
the foreign country if EU Member State
- Prior authorisation mandatory for hospital care
• Reimbursement by the Luxembourg sickness insurance in other cases
- Only for medical services and supplies obtained in the EEA and
Switzerland
- Upon prescription by a doctor
- Upon submission of evidence of payment
- Reimbursement on the basis of Luxembourg tariffs
29
Sickness benefits
Sickness allowance
Beneficiaries
Insured person – compensation for the loss of income due to work
disability
Duration
•
As long as the work disability continues – subject to the control by
the Contrôle Médical de la Sécurité Sociale
•
New law of 21 December 2004 : no entitlement to the sickness
allowance after 10 weeks of work disability over a reference period of
20 weeks, unless upon submission of a detailed medical report by the
usual doctor and advice of the Contrôle Médical
•
Maximum 52 weeks over a reference period of 104 weeks – no matter
the cause of work disability (normal sickness, work accident, …)
•
New law : in case of termination of affiliation, the payment of
sickness allowances is subject to the condition that the employee has
been affiliated for a continuous period of min. 6 months immediately
preceding the end of affiliation
30
Sickness benefits
Sickness allowance
Duration
• Link with the invalidity insurance and the law on professional
reinstatement
- Periodic examination of the disabled employee to check the
entitlement to sickness allowance
- 4 hypotheses :
- Employee is no longer disabled no entitlement to sickess allowance
- Employee is still sick sickness allowance maintained (max. 52
weeks)
- Employee is no longer able to exercise any job invalidity pension
- Employee is disabled for his last job but not for the whole
employment market procedure for internal or external reinstatement
• For self-employed : no entitlement to sickness allowance during the
first month of disability and the 3 subsequent months
31
Sickness benefits
Sickness allowance
Payment modalities
• For blue-collar workers : advance payment by the employer for the
first month of work disability and the 3 following months and
reimbursement by the sickness insurance fund – as of the 4th month,
direct payment by the sickness insurance fund
• For white-collar workers : payment of the salary maintained by the
employer for the first month of work disability and the 3 following
months (art. 35 of the law of 24 May 1989 on the employment
contract) – as of the 4th month, payment of the sickness allowance by
the sickness insurance fund / New law : max. 13 weeks over a
reference period of 12 months, no matter the cause of disability
• Amount of the sickness allowance : amount of the salary which should
have been paid – min. = MSS / max. = 5* MSS
32
Sickness benefits
Sickness allowance
Formalities
• Declaration of the work disability to the sickness insurance fund at the
latest on the 3rd day by medical certificate dated of the 1st or the 2nd
day of disability – same in the event of extension of the sickness
• Late declaration : sickness allowance due only as of the declaration
• For white-collar workers until the 4th month : medical certificate to be
given to the employer in accordance with art. 35 of the Law of 1989
• New law of 21 December 2004 : all insured persons (including whitecollar workers) have to send a copy of their medical certificate to the
sickness insurance fund – employers have to declare monthly all work
disabilities to the sickness insurance fund
33
Sickness benefits
Sickness allowance
Leave for family reasons
• Hypothesis : insured person absent of work due to the illness of a child
• Upon delivery of a medical certificate stating that the presence of the
parent is required
• Limited to 2 days per child and per year (unless very serious illness)
• Entitlement to an indemnity equal to the sickness allowance
34
Sickness benefits - Exercise
Mr Schmit is a high executive working in a Luxembourg bank. He earns a
monthly gross salary of EUR 7,500. From February 5, 2005 to June 15, 2005, Mr
Schmit is sick and has submitted the appropriate medical certificates stating his
work disability.
Which one of the following statement is correct ?
1 – During the whole disability period, Mr Schmit will receive his full salary
2 – Mr Schmit will receive his full salary during a part of the disability period
and an amount of EUR 7,333.85 during another period
3 – During the whole disability period, Mr Schmit will receive an amount of
EUR 7,333.85
35
Maternity benefits
Two categories of maternity benefits
Benefits in kind
Medical assistance, stay at maternity hospital, medicine,
supplies for newborn
Benefits in cash
Maternity allowance
- Condition : being subject to the mandatory insurance for min. 6
months in the course of the year preceding the maternity leave
- Duration of payment :
- 8 weeks preceding childbirth
- 8 weeks following childbirth / 12 weeks in case of multiple birth,
premature birth or breastfeeding
- In case of adoption : 8 weeks
36
Dependency benefits
Purpose
Compensation for the costs of care and help needed by a dependent person
at home or in a care centre
Dependency = state of an individual who, further to physical or mental
illness or deficiency, has an important and regular need for the assistance
of a person for the essential day-to-day acts
Conditions
Need for assistance must cover one or several aspects of the essential dayto-day acts = hygiene, nutrition and mobility
State of dependency must be linked to a medical cause
State of dependency must be foreseen for a minimum duration of 6
months
Need for assistance must represent a minimum of 3.5 hours per week
37
Dependency benefits
Beneficiaries
Persons subject to the mandatory insurance scheme or the continued
insurance : as of the first day of affiliation
Persons having subscribed to the optional insurance : one year waiting
period
Benefits
Benefits in case of stay at home (privileged) or in a centre for care and
help
Benefits in kind / in cash
Assessment of the state of dependency
In order to determine the nature and the volume of benefits to which the
dependent person is entitled
38
Work accident and occupational illness
Risks covered
Work accident
= accident which occurred by reason or on the occasion of work
link between the employment and the activity having caused the
injury – employee under link of subordination at the time of the
accident
Accident while travelling to work
= Accident which occurred on the normal and direct way to go from
home to the place of work and back
• Limited to accident on public roads
Occupational illness
= Illness to which certain categories of individuals may be exposed by
reason of their employment and which are recorded on a list
established by the government
39
Work accident and occupational illness
Benefits
Benefits in kind
• No contribution to be paid by the insured person
• Payment by the UCM, which is reimbursed by the AAA
Benefits in the case of temporary disability
• Duration of indemnification
- Recent change in the legislation to harmonise the benefits due in
case of work accident with the general sickness insurance scheme
- Before 1 May 2005 : temporary disability allowance equal to the
sickness allowance is paid during max. 13 weeks – afterwards,
payment of a temporary annuity depending on the level of
disability
- As of 1 May 2005 : temporary disability allowance equal to the
sickness allowance is paid during max. 52 weeks over a reference
period of 104 weeks – afterwards, annuity depending on the level
of disability
40
Work accident and occupational illness
Benefits
Benefits in the case of temporary disability
• Payment modalities
- For blue-collar workers : advance payment by the employer and
reimbursement by the AAA
- For white-collar workers : payment of the salary is maintained
by the employer for the 1st month of disability and the 3
following months (art. 35 of the law of 24 May 1989) – payment
by the AAA afterwards
41
Work accident and occupational illness
Benefits
Benefits in the case of permanent disability
• Depending on the level of disability
• Total disability annuity equal to 85.6% of the former income
• Partial disability annuity corresponds to a pro rata of the total
disability allowance
• For disabilities of 50% or more, increase of 10% per dependent child
(max. 100%)
• Repurchase of the lifetime annuity (i.e. conversion into capital) for
disabilities of less than 10%
Survivor’s benefits
• Funeral indemnity
• Annuity for spouse (in principle 42.8%) and for children (21.4%)
Formalities
42
Invalidity pension
Beneficiaries
Insured person who, for health reasons, is no longer able to
exercise his last job or any other job on the market
Insurance condition : having been subject to the mandatory or
continued insurance for 12 months in the course of the 3 years
preceding the start of invalidity – not applicable for invalidity due
to an accident
Beneficiary must renounce to the exercise of any self-employed
activity subject to insurance
Up to 50 years old, the beneficiary must follow the rehabilitation
or redeployment measures prescribed by the pension insurance
fund
43
Invalidity pension
Benefits
Temporary invalidity pension
• Paid as of the expiration of the right to the sickness allowance
Permanent invalidity pension
• Paid as of the day on which the permanent disability is stated, if the
insurance condition is met
Conversion into an old-age pension
• The invalidity pension is renewed as old age pension when the
beneficiary reaches the age of 65
44
Invalidity pension
Benefits
Amount of the invalidity pension
• Various elements
- Proportional increases (“majorations proportionnelles”)
- Special proportional increases
- Lump-sum increases (“majorations forfaitaires”)
- Special lump-sum increases
- Year-end allowance
• Minimum pension = 90% of the reference amount (EUR 1,467 –
index 636.26) for an insurance career of 40 years EUR 1.320,30
(index 636.26) – missing years between the start of the right to
pension and the age of 65 are taken into account.
• Maximum pension = 5/6th of 5 times de reference amount EUR
6,112.50 (index 636.26)
45
Invalidity pension
Benefits
Amount of the invalidity pension
• Concurrent benefit of an invalidity pension and an accident annuity
If exceed the average of the 5 highest income of the insurance
career or, if it is more favourable, the income taken into account
to determine the accident allowance, invalidity pension is
reduced
Formalities
• Request to be made to the sickness insurance fund or to the pension
insurance fund
46
Invalidity pension
Case study
Mr Schmit is victim of a work accident in October 2004 and is temporarily work
disabled. In May 2005, he is considered to be permanently invalid but decides to
start a small business as self-employed, bringing in an income estimated at EUR
1,000 per month.
Which one of the following statements is correct?
1 – A temporary disability allowance is paid by the AAA from October 2004 to
May 2005. As of May 2005, Mr Schmit will be entitled to a full disability annuity
paid by the AAA.
2 – A temporary disability allowance is paid by the AAA during 13 weeks. Then,
Mr Schmit is entitled to a full disability annuity paid by the AAA until May 2005.
As of May 2005, he will receive his annuity of the AAA and an invalidity pension
but the pension will be reduced.
3 – A temporary disability allowance is paid by the AAA from October 2004 to
May 2005. As of May 2005, Mr Schmit will only be entitled to an invalidity
pension.
47
Old-age pension
Age and insurance conditions
Normal old-age pension
• 65 years old, and
• 120 months of mandatory or voluntary insurance
Anticipated old-age pension
• At least 60 years old and 480 months of mandatory or voluntary
insurance, of which at least 120 months under the mandatory
insurance scheme
• At least 57 years old and 480 months of mandatory insurance
48
Old-age pension
Age and insurance conditions
Insurance periods taken into account
• Effective insurance periods = Periods taken into account to acquire
the right to old-age pension (insurance conditions) and to calculate
the pension, e.g.
• Periods of exercise of a professional activity
• Periods for which a replacement income subject to contributions
is paid
• Baby years (24 or 48 months)
• Assimilated insurance periods = Periods taken into account to
complete the insurance conditions required for an anticipated pension
as of the age of 60 and to calculate the pension, e.g.
• Periods during which an invalidity pension has been paid
• Periods of studies between 18 and 27 years old
• Waiting period during which the young unemployed is not
entitled to unemployment indemnities
49
Old-age pension
Amount of the old-age pension
Depends on the duration of insurance and the professional income
subject to contributions earned during the insurance career
Various elements
- Proportional increases (“majorations proportionnelles”) = 1.85% of all
income subject to contributions, reduced at the index 100 of the cost of
living and multiplied by an adjustment factor (= 1.327 in 2005)
- Staggered proportional increases : for persons aged 55 and having at
least 38 years of insurance rate of 1.85% is increased with 0.01% per
additional age year and 0.01% per additional insurance year
- Lump-sum increases (“majorations forfaitaires”) = 23.5% of a
reference amount (EUR 1,467 – index 636.26) for an insurance career
of 40 years = EUR 344.75 (index 636.26) EUR 8.62 per insurance
year commenced
- Year-end allowance = EUR 564 (index 636.26) yearly for an insurance
career of 40 years, reduced of 1/40th per missing year
50
Old-age pension
Amount of the old-age pension
Minimum and maximum pension
• Minimum = 90% of the reference amount (EUR 1,467 – index 636.26)
for an insurance career of 40 years EUR 1.320,30 (index 636.26)
• Maximum pension = 5/6th of 5 times de reference amount EUR
6,112.50 (index 636.26)
Increase of the old-age pension on the basis of the adjustment factor
and the cost of living
51
Old-age pension
Concurrent benefit of old-age pension and other income
Old-age pension and income resulting from a professional activity
• No restriction for the beneficiary of a normal old-age pension (as of age
65)
• Beneficiary of an anticipated old-age pension may not exercise an
activity bringing in an income exceeding one third of the minimum
social salary – otherwise, old-age pension is reduced or suppressed
Old-age pension and accident allowance
• Concerns normal and anticipated old-age pension
• Old-age pension is reduced if, together with the accident allowance, it
exceeds the average of the 5 highest income of the insurance career or,
if it is more favourable, the income taken into account to determine the
accident allowance
52
Old-age pension
Reimbursement of contributions
If at the age of 65, the insured person does not meet the insurance conditions
to benefit of an old-age pension, contributions paid (except for state
contributions) are reimbursed upon request
Education lump sum (“forfait éducation”)
Beneficiary : parent who devoted himself/herself to the education of a child
Education lump-sum paid as of the age of 60 or the grant of a personal
pension
Amount : EUR 84.43 (index 636.26) per month and per child
Request to be made to the Fonds National de Solidarité
Formalities : request to the pension insurance fund
53
Survival pension
Beneficiaries
Survival pension for the spouse or partner
• Spouse or partner of the beneficiary of an invalidity or old-age pension,
or of an insured person having been affiliated to the mandatory or
continued insurance for 12 months in the course of the 3 years
preceding the decease – no insurance condition if decease is due to an
accident in the course of affiliation
• Divorced spouse provided he/she did not remarry before the decease –
Survival pension is based on the insurance periods accomplished during
the marriage
• In the absence of surviving spouse or partner, entitlement to survival
pension for relatives on certain conditions
Survival pension for the children
• Same insurance conditions than for other survival pensions
• Until the age of 18 or 27 in case of studies
54
Survival pension
Amount of the survival pension
Survival pension for the spouse or partner
• 3/4 of the proportional and special proportional increases to which the
insured was or would have been entitled
• The full lump-sum and special lump-sum increases
• The full year-end allowance
• Minimum and maximum pension
• Geared to the cost of living index
• Additional payment for the first 3 months
Survival pension for the children
• 1/4 of the proportional and special proportional increases to which the
insured was or would have been entitled
• 1/3 of the lump-sum and special lump-sum increases
• 1/3 of the year-end allowance
• For orphans of the two parents, the highest pension is doubled
55
Survival pension
Concurrent benefit of the survival pension and other income
Survival pension for the spouse or partner
• Survival pension and survival accident allowance Survival pension
is reduced if, together with the survival accident allowance, it exceeds
3/4 of the average of the 5 highest income of the insurance career
• Survival pension and professional or replacement income Survival
pension is reduced if, together with personal income, it exceeds the
reference amount (EUR 1,467 – index 636.26) increased with 50%
(EUR 2,200.50 – index 636.26)
Survival pension for the children
• Survival pension and survival accident allowance Survival pension
is reduced if, together with the survival accident allowance, it exceeds
2/3 of the average of the 5 highest income of the insurance career
Total survival pensions in relation with the deceased may not
exceed the old-age pension due to the deceased or, if more
favourable the average of the 5 highest income – proportional
reduction
56
Family benefits
Various categories of family benefits
Family allowances (“allocations familiales”)
Back-to-school allowance (“allocation de rentrée scolaire”)
Birth allowance (“allocation de naissance”)
Maternity allowance (“allocation de maternité”)
Education allowance (“allocation d’éducation”)
Parental leave allowance (“allocation de congé parental”)
Conditions of entitlement vary for each category of benefits
57
Family benefits
Family allowances
Personal right of the child
Conditions
• Continuous residence in Luxembourg or falling within the scope of
application of the EC Regulations or bilateral conventions
• No loss of the allowance in case of temporary residence abroad if the
parent studies abroad
Duration
• As of the month of birth
• Until the age of 18 or 27 in case of studies in Luxembourg or abroad
• Allowance no longer paid as of the marriage or partnership (except in
case of studies) and in case of exercise of a professional activity
58
Family benefits
Family allowances
Amount
• Increases with the number of children in the family
• Increases with the age (as of 6 and 12 years old)
• Additional allowance for handicapped child
Payment
• In case child is raised in the common household of the parents, choice
of the parents
• In other cases, payment to the parent who has custody
• In case the child reaches the age of majority, payment to him/her upon
request
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Family benefits
Back-to-school allowance
Purpose
• Compensation of the specific costs linked to the beginning of school
Beneficiaries
• For children who are entitled to family allowances
• As of the age of 6 or upon submission of a registration certificate
Amount
• Increases with the number of children in the family
• Increases with the age (as of 6 and 12 years old)
60
Family benefits
Birth allowance
Purpose
• Ensure the continuous medical surveillance of the pregnant mother and
the young child
Conditions
• General condition : be domiciled and raise the child in Luxembourg
• Special conditions
• Pre-birth allowance : 5 medical examination and one dental
examination
• Birth allowance : one post-birth examination for the mother
• Post-birth allowance : 2 examinations of the child further to birth
and 4 others until the age of 2
Amount and terms of payment
61
Family benefits
Maternity allowance
Purpose
• Initially, benefits in cash similar to the maternity benefits for selfemployed women and housewives
• Since 1994, self-employed women receive maternity benefits only
for housewives
Conditions
• Domicile in Luxembourg
Terms of payment
• Payment during maximum 16 weeks as of the 8th week preceding the
presumed date of birth
• Payment in two parts
Amount
62
Family benefits
Education allowance
Purpose
• Allow one of the parents to stop his/her professional activity to raise
his/her children
• Participation of the costs of the day care centre for parents working
with low income
Conditions
• Parent must reside in Luxembourg or fall within the scope of
application of the EC Regulations or bilateral conventions
• Parent must mainly devote himself/herself to the education of children
and not exercise any professional activity OR earn together with spouse
or partner income lower than 3, 4 or 5 times the MSS (if raises
respectively 1, 2 or 3 or more children)
63
Family benefits
Education allowance
Terms of payment
• Due as of the first day following the end of the maternity leave or the
expiration of the 8th week following birth
• Lasts until the child reaches the age of 2 / 4 in case of multiple birth or
raising of 3 or more children
Amount
• Fixed amount no matter the number of children
• In principle, no payment in case one of the parents benefits for the
same children of the parental leave allowance
64
Family benefits
Parental leave allowance
Adopted in 1999 further to an EU Directive following an agreement
between social partners at European level
Purpose
• Allow a better conciliation between work life and family life
• Measure to fight against unemployment
Conditions
• Raising one or more children aged less than 5
• Devoting oneself mainly to the education of the children or, in case of
part-time leave, working no more than half of the normal working time
• Residing in Luxembourg or falling within the scope of application of
the EC Regulation
• Being legally occupied in Luxembourg at the time of birth as selfemployed or for at least one year as an employee of the same company
• Being subject to the mandatory pension insurance for the 12 months
immediately preceding the parental leave
65
Family benefits
Parental leave allowance
Duration
• 6 months full-time
• 12 months part-time, with the employer’s agreement
• One leave per parent and per child, provided one of the parents took
his/her leave immediately at the end of the maternity leave
Procedure
• Upon request notified to the employer before the maternity leave or at
least 4 months before the beginning of the parental leave
Amount and terms of payment
• Monthly payment
• Exempt of tax and social security contributions except contributions for
health care costs and dependency contributions
66
Family benefits
Parental leave allowance
Duration
• 6 months full-time
• 12 months part-time, with the employer’s agreement
• One leave per parent and per child, provided one of the parents took
his/her leave immediately at the end of the maternity leave
Procedure
• Upon request notified to the employer before the maternity leave or at
least 4 months before the beginning of the parental leave
Amount and terms of payment
• Monthly payment
• Exempt of tax and social security contributions except contributions for
health care costs and dependency contributions
67
Unemployment benefits
General scheme
Beneficiaries
• Full-time employee
• Part-time employee having worked at least 16 hours per week
• In case of exercise of various activities, job lost must have been
exercised for at least 16 hours per week and the remaining professional
income must be lower than 150% of the MSS
Conditions
• Being involuntarily unemployed no benefits in case job is
abandoned for non justified reasons (e.g. resignation, termination by
mutual agreement) or in case of dismissal for gross misconduct
• Being resident in Luxembourg (specific provisions provided by the EC
Regulation)
• Being available for the job market and ready to accept any appropriate
job
• Having worked at least 26 weeks in the course of the 12 months
preceding the registration as job seeker
68
Unemployment benefits
General scheme
Duration of indemnification
• Max. 365 calendar days over a reference period of 24 months
• For unemployed aged 50 or more, extension as follows
- 12 months, in case of mandatory affiliation during 30 years
- 9 months, in case of mandatory affiliation during 25 years
- 6 months, in case of mandatory affiliation during 20 years
• Extension of max. 6 months upon request to the director of the ADEM
for unemployed particularly difficult to place
• Extension of max. 6 months for the unemployed subject to training or
works of public utility
• After the end of entitlement to unemployment benefits, right in
principle to the minimum guaranteed income
69
Unemployment benefits
General scheme
Amount of the unemployment benefits
• 80% of the 3 last income – 85% if the unemployed has dependent
children
• Ceiling
- Max. 250% of the MSS for the first 182 days
- Max. 200% of the MSS for the next 182 days
- Max. 150% of the MSS in case of extension of the benefits
• if income of spouse 250% of MSS indemnity is reduced of the
following amount: 50% of spouse income less 250% of MSS
• Unemployment benefits are geared to the cost of living index and
subject to tax and social charges due on income
70
Unemployment benefits
General scheme
Formalities
• Registration as job seeker at the ADEM and submit a request for
indemnification
• Attendance to the regular meetings fixed by the employment office
Unemployed independent workers
Conditions for the entitlement to unemployment benefits
• Termination of activity further to financial or economic problems
• At least 5 years affiliation to the mandatory pension scheme –
possibility to take into account the periods of affiliation as an employee
if exercise of a self-employed activity for at least 6 months
• Residence in Luxembourg at the time of the request
• Registration as job seeker within 3 months
Amount
• 80% of the last income subject to contributions / min. 80% MSS / same
ceilings as in the general scheme
71
Unemployment benefits
Young unemployed
Beneficiaries
• Residence in Luxembourg
• Age : max. 28 years old for the unemployed having followed higher
education for at least 4 years
• Registration as job seeker within 12 months following the end of their
studies
Waiting period
• No entitlement for the first 39 weeks following the registration / 26
weeks in case of studies for more than 9 years
• Registration as job seeker within 3 months
Amount
• 70% of the MSS as non-qualified worker
72
Unemployment benefits
Partial unemployment due to bad weather or accident
Conditions
• Activity is interrupted due to bad weather conditions or activity is
interrupted due to a case of “force majeure” and the employer agrees
not to terminate the employment contracts
• Workers must be occupied on the Luxembourg territory and be subject
to the Luxembourg social security scheme
Amount
• 80% of the average income of the 3 last preceding months – max. 250%
of the MSS
• First 16 hours per calendar month are not paid – charge equally
supported by employer and employee
• Max. 350 hours compensated per calendar year – upon government
decision, up to 500 hours
Unemployment due to conjuncture – for sectors determined by
the government
73
Unemployment benefits
Case study
On 1 January 2005, Mr Schmit started his first job in Luxembourg in a bank. After
12 weeks, during the probation period, the bank terminated the employment
contract. 10 weeks later, Mr Schmit is hired by another bank but after 8 weeks, Mr
Schmit wishes to end the probation period because he does not get along with his
boss.
Will Mr Schmit be entitled to unemployment benefits? If not, for which reason(s)?
74
Part III
Employer’s obligations
75
Employer’s obligations
Registration of the company
The company hiring employees for the first time must send a
“déclaration d’exploitation” within 8 days
Affiliation of staff
The employer must send the “declaration of entry” of each new
employee within 8 days to the CCSS (affiliation section)
Any change having an influence on the insurance conditions must
be declared
The employer must send the “exit declaration” within 8 days
following the termination of the employment contract
Obligations subject to administrative penalties
76
Employer’s obligations
Declaration and payment of contributions
At the beginning of each month, the CCSS sends the list of all
employees and salaries of the preceding month
The employer must report on this list all gross remunerations and
benefits subject to contributions and any change in the personnel
and in the remunerations
Declaration to be returned within 10 days
Monthly payment of contributions
Administrative sanctions : max. EUR 2,500 / delay interests of 1%
per month
77
Employer’s obligations
Declaration of work disabilities
New law of 21 December 2004 – entry into force on 1 May 2005
Declaration of all work disabilities, even not justified, and other
periods of payment of the sickness or maternity allowances (leave
for family reasons, maternity leave, etc.)
Declaration on a monthly basis, with the declaration of
remunerations
78
Part IV
Social security in a
multinational environment
79
Coordination at a European level
Aim and general principles
Determination of the applicable legislation
Specific rules applicable to the various categories of benefits
Bilateral conventions
80
Aim and general principles
Introduction
Aim: promote the free movement of workers (article 39 of the
Treaty of Rome) and ensure that the worker is able to identify the
social security legislation applicable to his situation
Means: coordinate the different social security legislations of the
Member States (no harmonisation: each country maintains its own
scheme)
Legal basis
EU Regulation: n° 1408/71
Implementation Regulation: n° 574/72
New EU Regulation: n° 883/2004: modernize and simplify – entry
into force: at the earliest mid 2006
ECJ case law
81
Aim and general principles
Scope of application
Territorial scope : EU, EEA and Switzerland
Personnel scope
•
Salaried and self-employed workers
•
Citizens of one of the Member States
•
Was or is subject to the social security legislation of one or more
Member States (including pensioners)
•
Includes the members of their family and their survivors
•
Extension to citizens of third countries residing in a Member State
and having moved in at least two Member States
82
Aim and general principles
Scope of application
Material scope
•
Allowances relating to illness, maternity, work accidents,
professional illness, invalidity, old-age, death, unemployment, family
allowances
•
ECJ case law : dependency benefits
•
The regulation 883/2004 also adds preretirement
83
Aim and general principles
General principles
Equality of treatment
Application of the legislation of a Member State in the same conditions as
the citizens of the Member State concerned
Waiving of residence and nationality clauses
Aggregation of periods for
•
the opening and conservation of the rights
•
the computation of the rights
Prevention of overlapping of benefits
In principle, only one competent Member State
84
Determination of the applicable legislation
General rule
Basic principle : application of the social security legislation of
one Member State (the Competent State)
Application of the legislation of the Member State on the territory
on which the activity (salaried or non-salaried) is exercised
•
Independent from the State of residence
•
Independent from the seat of the employer
85
Determination of the applicable legislation
Exception - Secondment
Concept of secondment
•
Exercise of the professional activity on the territory of another
Member State than that where the activity is usually carried out
•
Maintain a link of subordination with the original employer
•
Limited duration (12 months + prolongation of 12 months)
•
Possible prolongation up to 5 years
Applicable scheme
•
Employee remains under the social security scheme of the Member
State where the activity is usually carried out
Formalities
•
E101/E102 forms
Secondment of self-employed workers
86
Determination of the applicable legislation
Exercise of activities in several Member States
Employees
•
Exercise of an activity partly on the territory of the State of residence
Legislation of the State of residence
•
Exercise of activities for several employers having their seat or are
domiciled in several Member States
Legislation of the State of residence
•
Exercise of an activity in various Member States, excluding the State
of residence
Legislation of the State where the employer has its registered office
87
Determination of the applicable legislation
Exercise of activities in several Member States
Self-employed workers
•
If the activity is partly exercised on the territory of the State of
residence
Legislation of the State of residence
•
In other cases
Legislation of the State in which the main activity is exercised
Special rule in the transport sector
In principle, legislation of the country in which the employer has its seat
88
Determination of the applicable legislation
Simultaneous exercise of salaried and self-employed activities on
the territory of several Member States
Principle
•
Legislation of the country where the salaried activity is carried out
•
If the salaried activities are carried out in several Member States,
determination of one legislation
Exception
•
Simultaneous application of the legislation of two Member States Appendix VII to the EC Regulation
89
Case studies
Mr Bond is an English citizen who lives in Luxembourg with his family. He
is employed by a company, which has its seat in France but he exercises his
salaried activity exclusively in Belgium.
Which national social security legislation will be applicable to Mr Bond and
his family ?
1 - Luxembourg legislation because he resides in Luxembourg
2 - French legislation because the company he works for has its seat in
France
3 - Belgian legislation because he exercises his activity in this country
4 - UK legislation because he is a national of that country
90
Case studies
A few years later, Mr Bond’s employer requests him to exercise a part of his
activity in Germany, in addition to his Belgian activity.
Which national social security legislation will be applicable to Mr Bond
considering his new employment situation ?
1 - Luxembourg legislation because he resides in Luxembourg
2 - French legislation because the company he works for has its seat in
France
3 - Belgian and German legislations because he carried out his activities on
the territory of these two countries
4 - Belgian legislation because he exercises the main part of his activity in
Belgium
91
Case studies
A few years later, Mr Bond is seconded by his employer to the United
Kingdom for 11 months. His family remains resident in Luxembourg.
Which social security legislation will be applicable during Mr Bond’s
secondment?
1 - French legislation because it is the legislation to which he is subject at
the time of his secondment
2 - UK legislation because he is seconded to his native country
3 - Luxembourg legislation because his family continues to reside in
Luxembourg
92
Case studies
After the first 11-month period, Mr Bond’s employer decides that the
secondment should be extended for an additional 8 month-period. During
this extension, Mr Bond will be carrying out activities for the UK subsidiary
of his employer and will be paid by this subsidiary.
Which social security legislation will be applicable during this extension
period?
1 - French legislation because it is the legislation to which he is subject at
the time of his secondment
2 - UK legislation because he will be working for a UK company
3 - UK legislation because the 12-month period of secondment is over
93
Specific rules for the various categories of benefits
Illness and maternity
Old-age pension
Invalidity pension
Work accident and occupational sickness
Unemployment
Family allowances
94
Illness and maternity
Benefits in kind
Residence in a Member State other than the Competent State
•
Health care is provided in the State of Residence at the charge of the
Competent State
Temporary stay in another country than the Competent State
•
Benefits in kind by the institution of the place of stay at the charge
of the Competent State
•
Conditions
- Stay
- Necessity of the treatment
- Formality: submission of the EU sickness insurance card
95
Illness and maternity
Benefits in kind
Moving to another Member State in order to receive health care
•
With prior autorisation (E112) – direct payment by the Competent
State
•
Without prior autorisation – advance payment by the individual
Border workers
•
Choice to receive health care in the Competent State or by the
institutions of the State of Residence at the charge of the Competent
State
•
Declaration of affiliation in Luxembourg and registration in the
place of residence (E106 / BL1)
Benefits in cash
Paid by the Competent State
96
Case studies
Mr et Mrs Potter live in Belgium.
Mr Potter is a French national employed in a Luxembourg company and is
presently seconded to the UK for 12 months.
Their child Harry is 16 years old and lives with his parents in Belgium.
Harry breaks his leg while skiing in Norway.
97
Case studies
Which country will take charge of the hospitalisation of Harry in Norway?
1 - Norway will bear the costs of hospitalisation according to its own tariffs
2 - Luxembourg will bear the costs according to the tariffs applicable in
Norway
3 - Luxembourg will finally bear the costs according to its own tariffs
4 - Belgium will bear the costs because the family resides in Belgium
98
Old-age pension
Principles
Right to a pension in every Member State where the worker was
insured for at least 1 year, prorated according to the periods of
insurance in each Member State
Aggregation of periods of insurance or residence in another
Member State
Paid by each country
Request made in country of residence
Example
A person having worked 10 years in Belgium, 20 years in Luxembourg
and 5 years in France will receive: - 10/35 of Belgian pension
- 20/35 of Luxembourg pension
- 5/35 of French pension
99
Invalidity pension
Principles
Two categories of States: States that compute invalidity depending
on the years of affiliation (B type) or not (A type)
Aggregation of insurance periods or residence in another Member
State
Benefits
•
If individual only worked in countries of A type : invalidity only
paid by the Competent State at the time of invalidity
•
If individual worked in countries of B type: each country pays an
invalidity pension in proportion to the years of insurance
Level of invalidity varies from one country to the other
100
Work accident and occupational sickness
Health care is provided by the country of residence at the charge of
the Competent State
Border workers may choose to receive health care in the
Competent State
Benefits in cash are provided by the Competent State (similar as
illness)
101
Unemployment
Principles
Aggregation of periods of insurance or employment in another
Member State (E301 form)
Unemployed residing in a country other than the Competent State
•
In case of residence in a country other than the Competent State,
unemployment benefits are provided by and at the charge of the
country of residence
•
Possibility to remain available for the job market of the Competent
State benefits provided by the Competent State
•
Border workers : country of residence
Possibility to export the right to the allowance for 3 months
(searching for work in another Member State)
102
Practical exercises
If Mr Potter looses his job while seconded in the UK, in which country will
he benefit from an unemployment allowance ?
1 - Luxembourg, because he works for a Luxembourg company
2 - Belgium, because he resides in Belgium
3 - UK, because his last work was carried out there
103
Family benefits
Aggregation of the periods of insurance, work or residence in other
Member State
Two types of systems:
•
A type: right linked to work in the country
•
B type: right linked to residence in the country
Principle: Payment by the Competent State even if the family members
reside in another country
No possibility to cumulate the rights for the same child and the same
period
•
Priority to the family allowances in the country of residence if the latter is
a country of A type or if it is a country of B type and work is carried out in
this country
•
Priority to the family allowances in the Competent State if residence in a
country of B type and no work is carried out in the country or residence
•
As the case may be, payment of a supplement by the other country
104
Bilateral conventions
Specific agreements with EU/EEA Member States, e.g. LuxembourgBelgium convention on border workers
Bilateral conventions with Brazil, Croatia, Chile, Cape Verde, US,
Tunisia, Canada, Quebec, former Yugoslavian Republics
Principles of equality of treatment and aggregation of insurance periods
Variable material scope
Generally speaking, similar coordination rules than the EU Reglation
105
The End
106