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

Factsheet for measure LU-2022-32/2260 – measures in Luxembourg

Tripartite agreement on adjustment of the rent subsidy

Subvention loyer

Country Luxembourg , applies nationwide
Time period Open ended, started on 01 August 2022
Context COVID-19, War in Ukraine
Type Tripartite agreements
Category Measures to prevent social hardship
– Keeping or obtaining a safe home
Author Patrick Thill (LISER) and Eurofound
Measure added 13 May 2022 (updated 20 June 2022)

Background information

In order to alleviate the pressure of rising prices on the purchasing power of the most exposed households, the agreement signed between the government, the Union des Entreprises Luxembourgeoises (UEL) and the trade unions Confédération Générale de la Fonction Publique (CGFP) and Confédération luxembourgeoise des syndicats chrétiens (LCGB) provides for three measures supporting both tenants and owners. These measures were decided in the framework of the Tripartite meeting held on 22, 23 and 30 March 2022.

Content of measure

In the framework of the tripartite agreement, the rent subsidy will be adjusted on 1 August 2022, so that all tenants up to the income level of decile 5, i.e. the median income level, will be eligible, increasing the number of eligible households.

In addition, the monthly amount of rental assistance will increase for all recipients by an average of 50% compared to the current situation. This means that, for example, a single person with a monthly income of €2,200 and paying €800 per month will receive a subsidy of €134. A large family will receive up to €400 per month in rental assistance, compared to €294 previously.

The adjustment will be made automatically for all households currently receiving rent subsidy and will of course be applicable to all future applications.

To benefit from the subsidy, the applicant must not be the owner, co-owner or usufructuary of another dwelling. The income must be regular for at least three months and cannot exceed a certain threshold. The monthly rent must exceed 25% of the applicant's net income.

Moreover, the rental must be the principal residence, whether it is an apartment or a house. The property must also meet current safety standards. It cannot be rented by an ascendant or descendant of the applicant, nor can it be rented by a public organization.

Use of measure

Currently, no data is available on the amount of grants awarded.

Contents

  • Other topics

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses People on low incomes

Actors and funding

Actors Funding
National government
Trade unions
Employers' organisations
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:

  • No involvement
  • Main level of involvement: Unknown

Involvement

This decision was taken in the framework of the Tripartite meeting held on 22, 23 and 30 March 2022. The resulting draft law was approved by the Government Council on Thursday 7 April 2022.

Views and reactions

Approval by two trade unions: Confédération luxembourgeoise des syndicats chrétiens (LCGB) and Confédération Générale de la Fonction Publique (CGFP), as well as by the Union des Entreprises Luxembourgeoises (UEL).

Sources

  • 31 March 2022: Tripartite agreement

Citation

Eurofound (2022), Tripartite agreement on adjustment of the rent subsidy, measure LU-2022-32/2260 (measures in Luxembourg), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/LU-2022-32_2260.html

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