A WALK THROUGH SOCIAL SECURITY BENEFITS AND LEAVES

A WALK THROUGH SOCIAL SECURITY BENEFITS AND LEAVES IN LUXEMBOURG BCC – 20 June 2018 Marielle Stévenot 1

TABLE OF CONTENTS ¾ Rights and benefits related to family ¾ Rights and benefits related to health ¾ Rights and benefits upon retirement ¾ Rights linked to specific personal events 2

INTRODUCTION ¾ Two categories of benefits – Social security benefits provided by the Social Security Code > Entitlement if affiliated to the Luxembourg social security scheme, i. e. in principle (if within the EU) • If working 100% in Luxembourg, or • If residing in Luxembourg and working at least 25% here – Employment rights and benefits provided by the Labour Code > Entitlement if employed under an employment contract governed by Luxembourg law and/or working on the Luxembourg territory 3

INTRODUCTION ¾ Two recent reforms impacting employment rights and benefits some – Law of 3 November 2016 on parental leave – Law of 15 December 2017 on maternity and various special leaves 4

RIGHTS AND BENEFITS RELATED TO FAMILY 5

MATERNITY LEAVE ¾ Duration – Pre-natal leave: 8 weeks before expected birth date > If delivery after, extension of pre-natal leave > If delivery before, remaining part of pre-natal leave is added to post-natal leave – Post-natal leave : 12 weeks (new) > Formerly: 8 weeks / 12 weeks for premature or multiple birth or breastfeeding > Adoption leave also extended to 12 weeks instead of 8 – Upon return to work, right to breastfeeding time: 2 x 45 min. or 1 x 90 min. per day – computed as working time 6

MATERNITY LEAVE ¾ Compensation – Benefits in cash: maternity benefits to compensate the loss of income during maternity leave > Paid by the CNS (Caisse Nationale de Santé) - If affiliated to the Luxembourg social security at least 6 months in the course of the 12 months preceding the start of the maternity leave > Amount: base salary + additional benefits in cash / max. 5 x the minimum social salary (MSS) = € 9, 992. 32 (index 794. 54) – Benefits in kind : reimbursement of health care costs > Medical examination, stay at maternity hospital, medicine, supplies for newborn, … 7

PATERNITY LEAVE ¾ New regime ¾ Duration – 10 days – No increase in case of multiple birth – Eligible employees > Father (included if separated/divorced), but also stepfather /stepmother who raises the child together with the mother or father > Covers couples of same or different sex > May be cumulated with part-time parental leave > Also in case of adoption of a child for the parent who does not take the adoption leave / of a child of less than 16 8

PATERNITY LEAVE ¾ Period – Must be taken within the 2 months of the child’s birth – May be split with the employer’s agreement. If no agreement, must be taken at once immediately after birth ¾ Notice of 2 months to be given to the employer stating expected dates – Copy of medical certificate stating expected birth date – If no notice employer may reduce the leave to 2 days ¾ Compensation – Remuneration paid by the employer like normal leave – 8 days reimbursed by the State – max. 5 x MSS 9

PARENTAL LEAVE ¾ Periods of leave – At the employee’s choice > Immediately after maternity leave (1 st parental leave) > Within 6 years (formerly 5) following birth – or 12 years in case of adoption – Limits > If both parents wish to take parental leave, one must take the first parental leave > Both parents may take the leave at the same time (new) 10

PARENTAL LEAVE ¾ Forms of leave – If under full-time contract > Full-time leave: 4 or 6 months > Part-time leave: 8 or 12 months > Split leave over 20 months : 1 day per week or 4 periods of one month – If under part-time contract > Between 20 and 40 hours / week: full-time or part-time leave > Between 10 and 20 hours / week: full-time leave only – If under split contract with several employers > Full-time leave only 11

PARENTAL LEAVE ¾ Right of employer to refuse the leave in some cases – First parental leave > Full-time leave: no refusal > Part-time leave: right to refuse > Split leave : need to discuss modalities – employer may propose alternative – if no agreement, right to full-time leave – Second parental leave > Full-time leave: no refusal but may be postponed in some cases > Other leaves: same as above 12

PARENTAL LEAVE ¾ Formalities: Request to be made to the employer by registered mail > 1 st parental leave: 2 months before start of maternity leave > 2 nd parental leave: 4 months before start date (formerly 6) ¾ Compensation : parental leave indemnity – Based on average monthly salary of 12 preceding months and average working time over same period – Max. 5/3 of the MSS (currently € 3, 330. 98) – min. = MSS – Examples: > Gross salary = € 3, 000 indemnity = € 3, 000 gross > Gross salary = € 5, 000 indemnity = € 3, 330. 98 gross – Paid by the Caisse pour l’Avenir des Enfants (CAE) 13

LEAVE FOR FAMILY REASONS ¾ Purpose – Allowing parents to take care of their child in case of sickness ¾ Beneficiaries – Employees with dependent child aged less than 18 (formerly 15) – no age limit for handicapped child – also for stepfather /stepmother who raises the child together with the mother or father - couples of same or different sex ¾ Formalities – Information of employer on the first day and provision of a medical certificate stating child’s illness and need for parent’s presence 14

LEAVE FOR FAMILY REASONS ¾ Duration – Depends on child age (formerly 2 days per year no matter age) – quota to be spent over the whole period > 12 days between 0 and 4 (i. e. average 3 days / year) > 18 days between 4 and 13 (i. e. average 2 days / year) > 5 days between 13 and 18 (only for hospitalization) > Doubled for handicapped child – May be extended up to 52 weeks over a period of 104 weeks for very serious illness (upon decision of CMSS – Contrôle médical de la sécurité sociale) ¾ Compensation – Normal salary paid by employer and reimbursed by CNS 15

FAMILY BENEFITS ¾ Family allowances – Duration of payment > Monthly payment as of the month of birth until 18 (or 25 if child continues studies) – Amount (new regime since August 2016) > € 265 per child > Increase for child aged over 6 (+ € 20) and over 12 (+ € 50) ¾ Birth allowance – Payable to the mother subject to compliance with medical examination during pregnancy, after birth and during the child’s first two years – Amount: € 1, 740. 09 payable in 3 instalments 16

FAMILY BENEFITS ¾ Back-to school allowance – Due for each child aged over 6 (€ 115) and over 12 (€ 235) – Payable automatically (no request needed) in August until the end of the secondary school 17

RIGHTS AND BENEFITS RELATED TO HEALTH 18

SICKNESS BENEFITS ¾ Purpose – Compensation of the loss of income in case of work disability ¾ Duration – First period covered by employer: continuation of salary until the end of the month in the course of which the 77 th day of absence over a reference period of 12 months is situated – Afterwards, payment by the CNS – Maximum 52 weeks over a reference period of 104 weeks – if threshold reached invalidity scheme 19

SICKNESS BENEFITS ¾ Amount – Base salary + additional benefits in cash – Max. 5 x MSS = € 9, 992. 32 (index 794. 54) ¾ Formalities – Medical certificate to be provided to the CNS within 3 days – Possible controls by the Contrôle medical de la sécurité sociale (CMSS) 20

HEALTH CARE ¾ General principles – Free choice of provider of medical services and supplies – Fixed tariffs negotiated with each medical profession – Entitlement to health care > During entire affiliation period and 3 months thereafter – Participation rate depending on type of health care or medicine > Max. participation per year = 2. 5% of the annual income subject to contributions of the preceding year 21

HEALTH CARE ¾ Health care when travelling or staying abroad – Within the EU (+EEA/Switzerland) > Right to consult doctor in another EU country – 2 options • Prior authorization from CMSS : third-party payment system (i. e. only part not borne by social security is due) – tariffs of foreign country • Without authorization : Advance of costs and repayment by CNS according to Luxembourg tariffs > Emergency treatment • No authorization required – reimbursement by CNS according to tariffs of foreign country > Hospital treatment (without emergency) • Need to obtain prior authorization from CNS – costs covered pursuant to tariffs of foreign country 22

HEALTH CARE ¾ Health care when travelling or staying abroad – Other countries > Unless bilateral convention between foreign country and Luxembourg, reimbursement by CNS pursuant to Luxembourg rules only • In case of emergency • Upon prior authorization 23

RIGHTS AND BENEFITS UPON RETIREMENT 24

AGE AND INSURANCE CONDITIONS ¾ Normal old-age pension – 65 years old and at least 120 months of effective insurance periods ¾ Anticipated old-age pension – At least 60 years old and 480 months of effective or complementary insurance periods (incl. at least 120 months of effective insurance) – At least 57 years old and 480 months of effective insurance periods 25

AGE AND INSURANCE CONDITIONS ¾ Insurance periods – Effective periods > Mandatory insurance, e. g. periods of professional activity and periods for which a replacement income subject to social contributions is paid (sickness, maternity, unemployment…) > Voluntary insurance: Possibility under certain conditions to “buy” insurance periods by maintaining /resuming affiliation on a voluntary basis – Complementary periods > Periods counting for the insurance conditions required for anticipated pension - e. g. : • Studies between 18 and 27 • Period of invalidity 26

AGE AND INSURANCE CONDITIONS ¾ Insurance periods – Career abroad (within EU/EEA/Switzerland) > Insurance periods abroad count as insurance periods for the entitlement to benefits in Luxembourg > Pension paid by each country in which the individual has been insured at least one year – prorated to the insurance periods effectively accomplished in each country > Example: work in the UK for 35 years and work in Luxembourg for 5 years • Entitlement to Luxembourg pension even if less than 120 months of insurance in Luxembourg • Total insurance career taken into account by each State: 40 years • Entitlement to 35/40 th from a UK pension and entitlement to 5/40 th of a Luxembourg pension 27

AMOUNT ¾ Pension elements – Percentage of remuneration subject to contributions throughout the career – Increase depending on age of retirement and number of months of insurance ¾ Minimum and maximum pensions (2018) – Min. : € 1 , 780. 45 per month – Max. : 8, 242. 81 per month 28

RIGHTS LINKED TO SPECIAL PERSONAL EVENTS 29

VARIOUS TYPES OF SPECIAL LEAVE In the event of death of a family member Leave New regime Former regime Death of minor child 5 days 3 days Death of first degree parent (own or spouse/ partner’s parent) 3 days Death of second degree parent (own or spouse/ partner’s parent) 1 day 30

VARIOUS TYPES OF SPECIAL LEAVE Other events Event Civil wedding New regime Former regime 3 days 6 days 1 day 6 days 2 days every 3 years 2 days 1 day 2 days Declaration of partnership of child / 2 days Enrolment to military service / 1 day Declaration of civil partnership Move Wedding of child 31

GENERAL PRINCIPLES ¾ Entitlement – As of the start of the employment – no waiting period – Not subject to agreement of employer – min. notice to be given foreseeable event (as per case law) ¾ Period – To be taken at once at the time of the event - If leave not taken, it is lost – Postponed to first working day if event falls on a weekend or public holiday – If occurs during holidays, replacement by special leave – Not due if take place during sickness leave 32

Questions ? ? ? ? 33

CONTACT Marielle Stevenot Partner stevenot@mnks. com T: +352 26 48 42 35 13 Disclaimer: This document is in the nature of general information only. It is not offered as advice on any particular matter and should not be taken as such. MNKS expressly disclaims all liability to any person or entity with regard to actions taken or omitted and with respect to the consequences of any actions taken or omitted wholly or partly in reliance upon the whole or any part of the contents of this document. 26