Applying for early retirement as an unemployed person on benefits

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Early retirement for unemployed persons receiving benefits is part of the extended measure of early retirement for company restructuring, which is an unemployment prevention measure, when an employee is facing the threat of dismissal due to company restructuring or technological change.

Unemployed persons receiving benefits, who meet the eligibility criteria for early retirement for shift-workers and night workers during periods of full unemployment benefits, may also exercise their right to early retirement.

Early retirement should not be confused with early old-age pension: old-age pension is drawn from the pension insurance fund, whereas early retirement is limited to 3 years. It is treated in the same way as insurance years that are taken into account when determining the amount of the legal pension entitlement.

Who is concerned?

This type of early retirement is designed for:

  • employees who have been made redundant (most commonly for economic reasons) who:
    • have been last employed by a business eligible for early retirement at the time of dismissal; and
    • receive full unemployment benefits from the National Employment Agency (Agence pour le développement de l’emploi - ADEM); or
  • employees who:
    • have lost their jobs through collective redundancy, been dismissed for reasons not of their own making, or had their employment contracts terminated in the context of bankruptcy proceedings or compulsory liquidation of the employer, and
    • meet the eligibility criteria for early retirement for shift workers and night workers during the periods when they were in receipt of full unemployment benefits.

Prerequisites

In order to claim early retirement for people on unemployment benefit, an employee must, during the periods when they are in receipt of full unemployment benefits:

  • be at least 57 years old, or turn 57 during that time;
  • meet the eligibility criteria for either an old-age pension or early old-age pension no later than 3 years after their early retirement application is accepted;
  • have last been employed by a business that is eligible for early retirement for company restructuring at the time of dismissal, or meet the eligibility criteria for early retirement for shift workers or night workers;
  • commit to not performing paid activity which (per month) exceeds half the applicable social minimum wage in a calendar year. Otherwise, they forfeit the right to the benefit.

How to proceed

Submitting the application

The application procedure for this type of early retirement is largely similar to that which applies for other types. However, the contact for the unemployed person on benefits is no longer their former employer direct, but rather the ADEM.

Workers applying for early retirement for unemployed persons on benefits submit a written application, together with a certificate confirming their pension entitlement, issued by the National Pension Insurance Fund (Caisse nationale d'assurance pension - CNAP), to their ADEM adviser/placement agent.

Amount of the early retirement allowance

The monthly early retirement allowance is the same as the full employment benefit received by the workers in question prior to taking early retirement.

The benefit is paid by the Employment Fund (Fonds pour l’emploi) direct.

Termination of entitlement to early retirement benefit

Entitlement to the early retirement benefit automatically ends:

  • on the day when the person turns 63, thus becoming eligible for an old-age pension or an early old-age pension; or
  • on the day when the person becomes entitled to a disability allowance; or
  • on the day when the person taking early retirement dies; or
  • if they practise, or resume, an activity which brings them an income which, over the course of a calendar year, exceeds (per month) half of the social minimum wage to which they are entitled.

Under no circumstances may early retirement be combined with any form of pension, paid by a pension provider in Luxembourg or abroad.

Good to know

For more information, please contact the Early Retirement Office at the Ministry of Labour:

Who to contact

Ministry of Labour

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Related procedures and links

Procedures

Applying for early retirement due to corporate restructuring Applying for progressive early retirement Applying for early retirement for shift workers and night workers Calculating the early retirement allowance Applying for an early old-age pension from the age of 57 or 60

Links

Further information

Paramètres sociaux au 1er janvier 2024

sur le site du ministère de la Santé et de la Sécurité sociale

Legal references

Code du travail - Livre V, Titre VIII - Chapitre II

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