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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case LU-2020-12/430 Updated – measures in Luxembourg

Financial aid for self-employed to compensate for temporary financial difficulties caused by the COVID-19 crisis

Aides remboursables destinées à remédier aux difficultés financières temporaires liées au COVID-19

Country Luxembourg , applies nationwide
Time period Temporary, 15 March 2020 – 30 June 2021
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Patrick Thill (LISER) and Eurofound
Case created 09 April 2020 (updated 10 February 2021)

Background information

Based on the law of 3 April 2020 on the introduction of an aid scheme for businesses in temporary difficulty/loi du 3 avril 2020 relative à un régime d'aide en faveur des entreprises en difficulté temporaire, this legal framework aims to provide refundable aids to self-employed persons holding a business permit and established in Luxembourg in craft, commercial and industrial businesses. Self-employed activities include, for example, lawyers, doctors, artists, scientists, engineers or journalists.

Content of measure

This measure aims at all self-employed persons holding a business permit and who are established in Luxembourg. In the case of mixed activities where one activity is exercised beyond self-employment, only eligible activities are covered by this aid (agricultural activities are not covered) on condition that the activities or their costs are kept separate.

Refundable costs by the measure include both staff and rental costs for the COVID-19 epidemic period running from 15 March to 15 May 2020. Staff costs comprise both income from a professional activity and income paid by an association or company. The aid is capped at an amount equivalent to 2.5 times the social minimum wage per person concerned. Rental costs are capped at €10,000 per month per single undertaking.

The law stipulates 4 prerequisites for the aid to be applied: the self-employed business must have financial problems during the defined period; the business must fall within the professions defined by the legislation; the business must have exercised its activities already before the crisis; and there must be a causal link between the business' financial difficulties and the COVID-19 epidemic period.

Updates

The following updates to this measure have been made after it came into effect.

08 January 2021

The Luxembourg State grants, under certain conditions, aid, in the form of repayable advances, to support companies, including natural persons exercising their principal activity in an independent manner, who are experiencing temporary financial difficulties related to COVID-19.

The period of validity has been extended. All applications must be submitted by 1 June 2021 at the latest.

Use of measure

In the context of the COVID-19 crisis, on 29 January 2021, the General Directorate for the Middle Classes introduced a third non-refundable allowance for the self-employed. By February 2021, 2,050 claims have been registered. In just eight days, more than 1,000 files have already been paid, which is equivalent to a payment of approximately €3 million.

Target groups

Workers Businesses Citizens
Self-employed
Does not apply to businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Peak or cross-sectoral level

Involvement

There was consultation.

Views and reactions

The measures are discussed in the tripartite Conjuncture Committee (Comité de Conjoncture).

Sources

  • 09 April 2020: Guichet public (guichet.public.lu)
  • 05 February 2021: Plus de 1.000 dossiers ont déjà été traités et payés dans le cadre de la troisième indemnité non remboursable en faveur des indépendant (meco.gouvernement.lu)

Citation

Eurofound (2020), Financial aid for self-employed to compensate for temporary financial difficulties caused by the COVID-19 crisis, case LU-2020-12/430 (measures in Luxembourg), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.