Who can be compensated for the loss of a job?

Employees who have lost their jobs involuntarily fall under the care of by the National Employment Agency (ADEM) as unemployed persons with benefits.

In other words, an employee who has resigned of his own free will cannot claim compensation. The same applies to those who terminate their employment contract by mutual agreement with the employer.

In addition, unemployment compensation is denied in the event of dismissal for gross misconduct.

However, an employee who has been dismissed in this way may, by means of a special permit from the Chief Judge of the Labour Tribunal, temporarily receive unemployment benefits, provided that he or she files a lawsuit against his or her former employer for wrongful dismissal.

Similarly, an employee who has resigned due to gross misconduct on the part of his or her employer may apply for provisional unemployment benefits, provided that he or she brings a suit against his or her former employer for gross misconduct that forced the resignation.

ATTENTION: If the Labour Tribunal finds that the dismissal was valid or if the resignation is judged abusive, the employee will have to reimburse all the unemployment benefits received. Otherwise, the employer must reimburse the unemployment benefits to the State

How can a person receive unemployment benefits?

The following steps must be taken when employees lose their job:

  • employees must register as a job seeker with ADEM;
  • employees with a permanent contract must be domiciled on Luxembourg territory at the time of notification of dismissal and those with a fixed-term contract at the latest 6 months before the end of the fixed-term contract.

This means that persons working in Luxembourg but residing abroad must register for unemployment benefits with the competent authorities abroad.

  • eligible employees must be between 16 and 64 years of age;
  • they must be available for the labour market, i.e. not be ill and be willing to accept any suitable job;
    before registering as a job seeker, they shall have been employed in Luxembourg for at least 26 weeks of the last 12 months, under the following working conditions:

    • full-time;
    • part-time, at least 16 hours per week;
    • with several employers and having lost one or more jobs totalling at least 16 hours per week within one month, provided that the remaining income is less than 150% of the minimum wage.

All these conditions must be met for a person to be eligible.

Case law

How long can the unemployed person receive benefits?

The duration of benefits is equal to the period employed, calculated in whole months, during the last 12 months preceding the registration as a job seeker.

Any unemployed person who meets the eligibility requirements can receive benefits for a maximum of 365 days in any 24-month period.

However, it is possible to obtain an extension in the following cases:

Unemployed person over 50 with 30 years of work An additional 12 months
Unemployed person over 50 with 25 years of work An additional 9 months
Unemployed person over 50 with 20 years of work An additional 6 months
Hard-to-place unemployed Up to 182 days of extension after approval by the Director of ADEM


The hard-to-place unemployed are defined as those over 55 years of age, those over 50 years of age with a work disability of 15% and those with a work disability of 30%.

Are unemployment benefits payable if I lose my part-time job?

People who have lost a part-time job can receive unemployment benefits provided that their weekly working time was at least 16 hours.

Employees with multiple employers who lose a job must meet two conditions:

  • the number of weekly hours at the job they lost must be at least 16 hours;
  • any outstanding monthly income must be less than 150% of the straight minimum social wage (see Social Parameters).

Are employees who are ill at the end of their notice periods entitled to unemployment benefits?

Employees who are on sick leave at the end of the notice period are not entitled to unemployment, as they continue to receive the sick pay corresponding to their last salary payment.

On the other hand, a person who becomes ill while unemployed continues to receive unemployment benefits.

Sick pay is limited to five times the minimum social wage, while unemployment pay is limited to 2.5 times the minimum social wage (see Social Parameters).

How much are unemployment benefits?

Unemployment benefits generally amount to 80% of an employee’s previous gross salary.

If the unemployed person has one or more dependent children, the rate is increased to 85%.

While the unemployment benefit is in principle 80% of the previous gross salary, it is capped in that it cannot exceed 2.5 times the minimum social wage (see Social Parameters).

The ceiling is reduced as the compensation continues. This is known as a degressive ceiling:

  • after six months of unemployment benefits: the ceiling is reduced to 200% of the minimum social wage;
  • after 12 months: the ceiling is reduced to 150% of the minimum social wage.

Are unemployment benefits reduced if an unemployed person earns money intermittently?

It is indeed possible to combine unemployment benefit with income from a professional activity.

However, the unemployed person’s income from this professional activity must not exceed 10% of the reference salary to avoid impacts to benefits.

If the income exceeds the 10% limit, the part of the income exceeding the limit is deducted from the unemployment benefits.

When do unemployment benefits end?

Unemployment benefits shall cease in the following cases:

  • the unemployment period has expired;
  • a beneficiary reaches the age limit of 65;
  • an unemployed person refuses an appropriate position without justification;
  • an unemployed person refuses to participate in training programmes, courses or work of public interest assigned by ADEM without justification;
  • an unemployed person does not comply with the obligations laid down in the individualised cooperation agreement (suspension of benefits for a period of between five days and three months or final withdrawal of benefits by decision of the Director of ADEM).