Parliament backs guaranteed minimum wage reform

The new law introduces a new social inclusion income scheme (Revis) to replace the current guaranteed minimum income (RMG) Photo: LW

Luxembourg's parliament, the Chambre des Députés, has voted to reform the guaranteed minimum wage.

The new law introduces a new social inclusion income scheme (Revis), to replace the current guaranteed minimum income (RMG, Revenu Minimum Garanti).

It will enter into force in January 2019.

Who does it affect?

The reform aims to create a better social and professional reintegration.

• Independent professionals: According to the text, a self-employed person will be able to benefit temporarily from the future Revis, for a period of six months, renewable once.

• Households with children: They will benefit from a 15% wage increase (+ €105 for families with children receiving family allowances). 
  
  The aim is to improve the living conditions of children in low-income families. This increase represents an additional public expenditure of €7 million.

• Some retirees: The objective is to prevent the precariousness of the elderly or disabled. The cost for the state is estimated at €775,000.

The new scheme comprises an inclusion allowance, including a basic lump sum per person (€701.19) and a common subsidy per household (€701.19).

For households with children, an additional allowance is planned and revalued in relation to the current child share (and increased for single-parent households).

The future Revis also introduces a new immunisation mechanism for full-time and part-time occupations.

In the future, 25% of incomes from these occupations will not be considered in the calculation of social inclusion income.

The new scheme will also allow two adults in the household to accept a job as part of the reintegration into work programme, whereas only one person per household could do so under the existing RMG system.

ADEM, Luxembourg's national employment agency, becomes the first contact board for Revis applicants.

Around 20,000 people (4,000 households) are currently affected by the new law.

35 MPs voted in favour of the text and 25 MPs voted against it.

A first assessment of the new law will be done in 2022.