New report sheds light on low uptake of financial assistance measures

It is estimated that only 60% of eligible individuals benefit from the cost-of-living allowance, with a mere 20% receiving the rent subsidy. There are a number of reasons for this, according to a new report commissioned by the Chamber of Employees and conducted by the Luxembourg Institute of Socio-Economic Research (LISER).

Researchers conducted interviews with individuals who are eligible for state benefits but do not receive them. Reasons cited include a lack of awareness or understanding of available measures, as well as difficulties encountered during the application process, such as prolonged waiting times or the requirement to renew applications annually.

Additionally, instances of strained interactions with administrative bodies were highlighted, with some applicants reporting feeling disheartened by responses or facing rejection. Anne Franziskus of the National Institute of Statistical and Economic Studies (STATEC) noted that while "many" staff members handle applicants positively, there are instances where implicit biases or "stereotypes" may influence interactions, even if not explicitly expressed.

Interviews conducted with eligible individuals reveal that many refrain from seeking social assistance due to feelings of stigma and shame associated with being perceived as "poor" or "lazy." This reluctance stems from a fear of social judgment and a desire to avoid being labelled as "moochers," often leading individuals to endure further emotional distress or shift blame onto others, such as foreigners or the unemployed.

Franziskus acknowledged the complexity of this issue, emphasising that precarious situations are typically the result of various factors, including low wages, soaring housing costs, family breakdowns, or health issues. Moreover, existing financial aid schemes often come with stringent conditions, inadvertently excluding those most in need of assistance.

Anne-Catherine Guio, representing LISER, cited the example of students who still live with their parents or the householder community. Another well-known issue is that of administrative bodies taking the entire income of a household consisting of several individuals living independently of each other under one roof into account, which often leads to the exclusion of potential beneficiaries.

Guio highlighted several avenues for improving accessibility to social assistance. She suggested transitioning from a rigid income-based threshold to a more flexible, degressive approach, similar to existing individual aid schemes. Furthermore, Guio advocated for greater coherence across different assistance programmes, proposing the establishment of a centralised point of contact and a unified eligibility assessment tool.

Simplifying the renewal process and streamlining administrative procedures are also key priorities, with Guio recommending the automation of certain forms of assistance to expedite aid delivery. Additionally, she underscored the importance of providing comprehensive training to administrative staff and implementing a zero-tolerance policy towards discriminatory practices during the application process.