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Commission requests Luxembourg to end suspension of unemployment benefits

26/10/2011 Commission requests Luxembourg to end suspension of unemployment benefits

The European Commission has requested Luxembourg to end the practice of denying unemployment benefits due, solely on the basis of its national legislation, to persons receiving a pension from another EU Member State.

For the Commission, this practice is in breach of EU rules on social security coordination and, as clarified by the case law of the EU Court, prevents workers from exercising in full their right to free movement between Member States.

In general, EU law allows for the application of national rules to prevent people getting the same benefits from more than one Member State. However, such rules cannot be applied if the benefit due to the claimant is on the basis of national rules alone, and not on the basis of EU social security coordination rules.

For example, a woman lost her job after working for ten years in Luxembourg and was entitled to receive unemployment benefits on the basis of Luxembourg law. However, under Luxembourg law, the award of unemployment benefits to recipients of an old-age pension is prohibited. As the claimant was in receipt of a small French old-age pension (amounting to €83 per month), her claim for unemployment benefits was rejected. If, on the basis of EU rules, the women’s periods worked in France had been taken into account when awarding the unemployment benefit, Luxembourg could have applied anti-overlapping rules. This is not the case as the complainant contributed for enough years to be entitled to unemployment benefits exclusively on the basis of Luxembourg law.

The Commission's request to Luxembourg takes the form of a 'reasoned opinion' under EU infringement procedures. Luxembourg now has two months to inform the Commission of measures it has taken to bring its legislation into line with EU law. Otherwise, the Commission may decide to refer Luxembourg to the EU's Court of Justice.

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