European Trade Union Institute, ETUI.

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Luxembourg

29 August 2018

Luxemburg: reform of statutory minimum income finalised

The Luxemburg parliament has given the green light for the replacement of the current guaranteed minimum income scheme (Revenu Minimum Garanti - RMG) by the social inclusion income (Revenu d’Inclusion Sociale - REVIS). The REVIS-scheme that is calculated at household level will include two components: a social inclusion benefit and an activation benefit. During the preparation of the act, the trade unions have criticised the scheme’s benefits for being too meagre.

The country’s parliament, the Chambre des Députés, voted in July 2018 in favour of a reform of the guaranteed minimum income. The new act introduces a social inclusion income scheme (REVIS) that will replace the current guaranteed minimum income (RMG, Revenu Minimum Garanti). The final text of the act was published on 30 July 2018; the act enters into force in January 2019. Around 20,000 people (4,000 households) will be affected by the new law. The impact of the act is to be assessed by 2022.

The REVIS-act has four objectives: to promote a social inclusion approach; to establish a coherent system between policies of stabilisation, social activation and professional reintegration; to tackle poverty of children and single-parent families; and administrative simplification. The new scheme will allow two adults in a household to accept a job as part of the reintegration into work programme, whereas only one person per household can do so under the current RMG system.

The minimum guaranteed income (RMG) exists in its current form since 1999 and, according to the legislator, it was intended to specify, amend and supplement the minimum wage system. An analysis of the current RMG system revealed inactivity traps that undermined work incentives, and a lack of coherence between policies of social activation and integration through work. Moreover, the legislator was confronted with an increasing risk of poverty for children and single-parent families and with complicated administrative and procedural aspects. In December 2016, the government approved the draft law on income from social inclusion (REVIS) in order to revitalise the mechanism of the RMG. The final bill was tabled in January 2017 and the parliament voted on 10 July 2018.

Trade union OGBL welcomed the draft tabled in January 2018. In its analysis, the union nevertheless, referred to an expert study, which concluded that the various amounts proposed in the REVIS-scheme were in general still too low and especially with regard to the amount of the basic lump sum component per child as well as that of the component for the common household expenditure.

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