Chapter VI: Old-age Chapter VI: Old-age
Applicable statutory basisBook III of the Social Insurance Code (Code des assurances sociales), including the last amendments through the Law of 27 December 1996.
Basic principlesInsurance system.
Field of applicationCompulsory insurance for all persons engaged in a professional activity (employees and self-employed). A voluntary insurance is possible.
Exemptions from compulsory insuranceExemption from compulsory insurance is granted to persons who are only engaged occasionally and not customarily in a professional activity, when the period of activity is determined in advance. The period of activity should not exceed three months in each calendar year.
The insurance does not cover non salaried activities if the work income does not exceed one third of the minimum social wage.
Conditions120 months of effective insurance.
If, at age 65, the insured does not fulfill the necessary condition of 120 months of insurance to obtain an old-age pension (pension de vieillesse), the contributions paid (except the portion paid by the State) are reimbursed.
40 years of insurance.
Standard pension
65 years.
Early pension
From 60 years of age, on condition that 480 months of effective insurance can be proved or additional reduced periods can be proved.
From 57 years of age, on condition that 480 months of effective insurance can be proved .
Deferred pension
The beginning of the old-age pension (pension de vieillesse) may be deferred until the age of 68.
BenefitsContributions and length of insurance periods are taken into account.
Comprises flat rate supplements (majorations forfaitaires) (depending on duration) of 1/40 per year of insurance (max. 40 years) and of proportional supplements (majorations proportionnelles) (which depend on the contribution effort).
Flat rate supplements (majoration forfaitaire): LUF 9,840 (EUR 244) per month for 40 years of insurance.
Proportional supplements (majoration proportionnelle): 1.78% of total earnings taken into account.
The salary or the professional income are taken into account.
Minimum amount liable for contribution:
LUF 46,878 (EUR 1,162) per month.
Maximum amount liable for contribution:
LUF 234,392 (EUR 5,810) per month.
Periods for the rearing of children, education/training periods between the age of 18 and 27, periods during which a dependent was cared for, periods during which an invalidity pension is granted, periods exempted from payment of self-employment contributions, etc.
Spouse
None.
Children
None.
None.
No pension shall be less than 90% of the reference amount, if the insured has at least 40 years of insurance: therefore, there is a minimum of LUF 40,255 (EUR 998) per month. If the insured did not qualify as aforementioned, the minimum pension (pension minimale) is reduced by 1/40 for each missing year.
No pension shall exceed 5/6 of five times the reference amount, that is LUF 186,366 (EUR 4,620) per month. Calculation is based on the rules of common law.
Calculation is based on the common law.
Supplement to the pension by an actuarial co-efficient applicable between the ages of 65 and 68 years.
AdjustmentPensions automatically index-linked to price development whenever the index varies by 2.5% in relation to the preceding index.
Adjustment of pensions to level of wages by special law.
Partial pensionIf salaried activity is exercised for which monthly earnings exceed one-third of the minimum social wage, the pension is automatically reduced by half.
Accumulation with earningsNormal old-age pension (pension de vieillesse normale): accumulation possible without limit.
Early old-age pension (pension de vieillesse anticipée): accumulation is limited to earnings resulting from occasional or insignificant activity, i.e. earnings less than one third of the minimum social wage (monthly average during the calendar year).
Taxation and social contributionsFor tax purposes, social security benefits replacing income are treated as wages.
The same special tax allowances for persons in gainful employment and pensioners respectively.
Contributions are deducted for heath care.