Over 18,000 people in Luxembourg benefit from special 'family allowance'

Luxembourg's reputation for parental support is well-established, boasting some of Europe's most extensive and well-compensated parental leave policies, breastfeeding breaks, and generous family benefits.

But in addition to these universal benefits, civil servants enjoy additional perks, including the aforementioned "family allowance" now under scrutiny.

Petition No. 3000, submitted by Dara Miranda, calls for the implementation of a "head of household" bonus for all parents with dependent children in Luxembourg. Since its submission on 13 February, the petition has gained momentum, surpassing the 4,500-signature threshold. This means that it will have to be discussed in a public debate with MPs and the relevant minister. However, the likelihood of tangible outcomes from this initiative remains uncertain.

Family allowance: A supplement to child benefits

It is worth noting a clarification regarding the terminology used by the petitioner. The Ministry of the Civil Service, in response to enquiries from our colleagues at RTL Infos, underscores that the correct term for the discussed allowance is "family allowance," not "head of household" allowance, as stated by the petitioner. The latter term has been obsolete since 1983.

According to information provided on the civil service website, the amount of this allowance "corresponds to 29 index points, regardless of the number of dependent children." Unlike the standard family allowance available to everyone, this allowance therefore does not vary based on the number of children.

However, the Ministry of the Civil Service points out that there is a distinction regarding the value of the index point between State employees and civil servants. As a reminder, civil servants are recruited through competitive examinations, whereas employees are recruited by means of a normal employment contract. Civil servants receive a higher value, translating to "€639.14 gross for employees and €675 gross for civil servants." This special allowance is disbursed on a monthly basis.

This supplementary allowance is particularly significant as it complements the standard family allowance provided by the state. The latter starts at €299.86 per month for each dependent child and extends up to the child's 18th birthday, with potential extension until the child's 25th birthday.

A budget of €133 million for 18,327 recipients

This special family allowance is distributed under certain conditions. Civil servants qualify if they have at least one child under the age of 27 residing in their household. The number of recipients is substantial. As of 16 February 2024, information provided by the Ministry to RTL Infos revealed that "18,327 civil servants were beneficiaries of a family allowance," representing over half of all civil servants. This support comes with a hefty price tag, with a budget allocation of €133 million for the fiscal year 2023 alone. Should this benefit be extended to all employees with dependent children, the financial implications would be significant.

The recent coalition agreement for the years 2023-2028 does not outline any plans for reforming the "family allowance" in alignment with the petitioner's objectives.

Civil servants' benefits: A frequent topic of debate

The topic of civil servants' benefits, encompassing bonuses, allowances, and various privileges, remains a contentious issue in Luxembourg, often shrouded in ambiguity. A 2022 report by the Ministry of the Civil Service highlighted a "proliferation of benefits introduced over time through decisions of varying legal mechanisms, leading to a complex landscape." Notably, the report indicated that 62% of civil servants benefit from at least one allowance, with close to 230 distinct allowances identified.

The Luxembourg civil service offers a number of perks - even if there are reportedly disparities in treatment. / © Shutterstock

The report also underscored disparities in treatment among staff, with some receiving minimal additional benefits beyond those standard across the civil service, while others enjoy significantly more advantageous arrangements where allowances can constitute a substantial portion of their total remuneration.

In 2022, the report unveiled that the average gross monthly salary of a Luxembourg civil servant stood at €8,688. This figure has likely increased since then, owing to wage indexation. In summary, the wealthy Grand Duchy, known for its record-setting achievements, may also claim the distinction of being exceptionally generous in its treatment of civil servants.

Related:

Rising costs: Luxembourg's civil servants' pensions reach record high

Study reveals: Luxembourgish civil servants earn on average €8,688 gross per month