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 three measures to support tenants and owners. These new measures were decided during the tripartite meeting held 22-30 March 2022.

Among these measures is the PRIMe House assistance package. This bill amends the law of 23 December 2016 that established an aid scheme for the promotion of sustainability, the rational use of energy and renewable energy in housing. The amended version of this bill was adopted by the Chamber of Deputies on 31 March 2022. This bill, accompanied by a draft grand-ducal regulation that sets the implementation measures for projects initiated during the years 2022 to 2025, extends and reorients the PRIMe House financial aid scheme.

Content of measure

The PRIMe House scheme applies to homeowners and tenants. This additional assistance was introduced as part of the ongoing reform of individual housing subsidies and came into effect in early 2023. However, it will apply retroactively to all PRIMe House applications approved by the Ministry of Environment, Climate and Sustainable Development since 1 January 2022.

The new financial aid scheme applies to the following investments and services:

• New construction: the measures are extended by one year, pending a general reform of the sustainability criteria of the LENOZ certification system set by the Grand Ducal Regulation of 23 December 2016 on the sustainability certification of housing
• Sustainable energy renovation of existing housing
• Technical installations using renewable energy sources
• Energy consulting

An additional bonus is awarded for the joint installation of these two facilities. In addition, PRIMe House beneficiaries will be able to apply to the One-Stop-Shop for Housing Subsidies for a "100% social top-up." This means that the poorest households can receive doubled funding, doubling of the PRIMe House subsidy. This additional assistance enables targeted households to avoid energy poverty.

The costs of installing heating systems based on renewable energy will be paid directly to the company carrying out the work, instead of being reimbursed to the beneficiaries.

In order to respond in a targeted and specific way to the needs of households, private market tenants and families with lower incomes are supported.

Use of measure

This measure concerns owners and tenants of the private and public market. This amounts to 269,000 households (STATEC 2021).

The amount of aid granted is graduated according to the income level of the households. These is no information regarding their specific thresholds and calculation methods. For new single-family houses, the aid amounts to €3,000. The previous ceiling for single-family house aid was €2,500. While multi-family buildings did not receive any support for heat pumps under the 2017 scheme, the 2022 scheme provides multi-family buildings with €2,000. For existing buildings, up to €5,000 will be allocated to installations with a "nominal capacity of up to 10kW thermal." Buildings with higher capacity will receive €500 per kW thermal with a ceiling of €12,000.

Contents

• Other topics

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Does not apply to businesses	Applies to all citizens

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: N/A

Involvement

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

Views and reactions

Trade unions, LCGB and CGFP, and the Union des Entreprises Luxembourgeoises (UEL) approved of this measure.

Sources

• 31 March 2022: Housing measures
• 31 March 2022: Tripartite agreement
• 03 March 2023: Tripartite agreement (gouvernement.lu)