*Update 23.01.2025 Luxembourg-based staff; check the email received Wendesday 22.01.2025 ‘Housing allowance // Allocation de logement’ for info. The decision is neither final nor public. Luxembourg media announced a housing allowance in December 2024. We expect the final version to fall short of its stated intention of addressing the recruitment and retention of staff in Luxembourg (‘the Luxembourg attractivity problem‘).*
Original article: In an article published on 18 June 2024, the Luxembourg Times dropped a bombshell: EU staff in Luxembourg to receive 500 € monthly housing allowance, followed up with news that 4 institutions are to pay that allowance (unfortunately, both articles are behind a paywall). To summarise the info provided there: the European Parliament has apparently confirmed that staff up to and including grade AD/AST 6 step 1 will receive this allowance for a maximum period of 4 years and it will be progressively reduced.
We here at Generation 2004 do not have more information; why grade 6? Why 4 years? When will it happen? What is the eligibility criteria? Notably, we do not know even whether the Commission intends to follow up on this, given the differences already seen in payments to staff depending on the institution where they work[*]. Nothing new here, the Commission keeps to its mantra of “we are the leader – wait for us!”.
A bit of history
For some context, Generation 2004 has been proposing a housing allowance for several years, given the known issues with the very high cost of living in Luxembourg and easily seeing which members of staff are more likely to experience difficulties. Consequently, we were pleased to see housing appear twice on the 2022 CALux list of 12 actions to improve the recruitment and retention statistics for Luxembourg (’attractivity’): in fact we were rather intrigued at the fact that those 2 actions are the very same as those we put forward in 2019. Unfortunately, more than 2 years on, the CALux has little, if any, concrete and visible output to show us on the 12 actions, least of all the 2 related to housing. Nevertheless, suddenly in June 2024 the Luxembourg Times says that the housing allowance is on its way, we would like to see an official communication on this.
More recent history
Before this newspaper article was published there were two messages to staff in Luxembourg from another trade union/staff organisation (OSP), 07 May 2024 and 30 May 2024, first asking for a housing allowance of 1500 EUR for staff living in Luxembourg and then for 1000-1500 EUR. And yes, it was the same trade union – we haven’t figured out which amount is the finally proposed one either. In any case, let’s do some maths and apply it to borders.
Let’s take the figures above and assume that we have around 10k EU staff working in Luxembourg across all institutions[**]. Let’s further assume that 30% of them live outside Luxembourg (it is difficult to find readily available data sources for both numbers, but we have good reasons to believe that they are not too far off from reality). This means that 7000 EU staff live in Luxembourg and would be eligible, they would therefore receive as a group between 7 and 10.5 million EUR/month or up to 120 million EUR per year, if those figures stay constant. If you find 120 million EUR in the administrative budget (mind you: each year!), give us a call.
Until this happens, we consider the OSP proposal to be completely unrealistic. There is also the question of whether a judge at the Court of Justice, someone who earns at least an AD16 step 3 salary, really needs a housing allowance: a basic salary of 24000 EUR/month before taxes (as at 01/01/2024) should allow for some decent accommodation even in the more expensive parts of the city.
For all staff assigned to Luxembourg or only those staff living in Luxembourg?
However, we are quite clear that we insist that any housing allowance must apply to all staff assigned to Luxembourg, no matter where they live. Otherwise, we would be supporting a situation where the colleagues who live at an inconvenient distance from their place of employment (rarely done by choice) would still receive not one euro more. This might cristalise a situation where staff who find themselves lower on the salary scales and living outside Luxembourg are never able to make the leap to living within the country. In spite of state assistance[***] living in Luxembourg remains out of reach for many.
If you move 30 km away from the BECH building (Kirchberg, home of Eurostat, the force behind the yearly salary updates), you are in most cases already outside the country of Luxembourg. Don’t believe it? Look for yourself: on the linked map, the entire border of the 30km circle below the line established by connecting Trier (Germany) and Habay (Belgium) is outside the Luxembourg national border[****]. Lower housing costs there have nothing to do with them being bordering regions, but everything to do with the simple fact that housing costs are lower the further away you get from a city centre. This is not a particularity of Luxembourg: it applies to every city, even to Brussels. How many colleagues in Brussels live 30 km away from their place of employment? For Luxembourg this appears to be a desperate attempt to come up with some sort of excuse to spend as little as possible while still being able to claim that they tried to remedy a long-standing problem.
Where we stand
We firmly believe that no colleague loves to spend hours each day in traffic jams, just because the Luxembourgish landscape is so beautiful. Where we draw the line is then subject to discussion, but if that residence is sufficiently close to be authorised for telework why should it then be judged too far away to qualify for a housing allowance? Of course, the administration can ultimately just go ahead and ignore us, but we should at least be clear on what we want.
As always, we would love to hear from you. Please do not hesitate to get in touch with us or leave a comment below.
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[*] Minimum wage in Luxembourg for Contract Agents – Parliament shows the way and the monthly €40 lump sum contribution to working-from-home costs for Parliament staff paid from April 2020
[**] The Luxembourg Times puts it at 14000 in 2023, but it’s not possible to see the source for that figure.
[***] Luxembourg changed the law 10.07.2024 to improve the rights of tenants e.g. size of deposit (now equal to 2 months of rent, not 3) who pays for agency fees (no longer 100% tenant) and the return of the deposit. Nevertheless, much of what is labeled ‘affordable’ housing (rent or purchase) remains far from affordable.
RTL, Affordable housing is no longer selling in Luxembourg 19.05.2024
Virgule, Quand les logements, même abordables, ne trouvent pas preneur, 10.04.2024
[****] For this reason, a Luxembourg-based colleague might telework from another country without using up their 10 teleworking from anywhere days: that colleague might be only 30 km from work and living just across the border in Germany. So, no, Luxembourg-based colleagues do not have more TWA days, they are just doing their best to get by. For comparison, Brussels-based staff can have a partial reimbursement of their transport costs up to a 60km maximum distance.
Dear colleagues,
in my opinion there are 2 important aspects of this problem, and mostly 1 is being considered, not the other:
1. how to help financially disadvantaged colleagues in Luxembourg, in particular those of lower grades, to cope with the high housing prices and thus also to increase the attractiveness of the Luxembourg site
2. “financial discrimination” of Lux colleagues vs. Brux. colleagues – this does not depend on the grade, but is a matter of principles. Examples –
v
Yes, purchasing power is indeed an issue. We noted in an article that in October 2022 Eurostat stated that NATO and EFTA use a correction coefficient of 124.6 for Luxembourg p.6). https://generation2004.eu/minimum-wage-in-luxembourg-for-contract-agents-finally-a-glimmer-of-hope/
Examples – colleagues in Bruxelles who take a mortgage on an apartment may have around 5-10 years less of mortgage payment time; or, they can purchase much bigger apartments than colleagues in Luxembourg. So, this aspect should also be tackled.
You mention in your presentation:
Allowance should have a social structure:
– Low income: full amount
– High income: nothing
This solution helps solve problem 1, but not problem 2 (why should high-grade officials in Bruxelles be treated differently than those in Luxembourg?). Do you think there is any way to solve problem 2?
Also, what do you consider “high income ” grade, and what are “low income” grades? Thank you for clarification.
The LT article gives AD/AST 6(1) as the cut-off point for a potential housing allowance, but no further details on eligibility conditions. Grades/function groups are a useful shortcut, but household income can vary enormously even for people in the same grade, depending on their circumstances (e.g. expatriation allowance/foreign residence allowance). Indeed the Parliament payment to reach minimum wage was not applied per grade: it was the net income which was used for the calculation. Unfortunately the Parliament and the CALux are offering short-term help for a long-standing problem. https://generation2004.eu/two-years-on-whats-happening-with-the-12-actions-for-luxembourg/
Thank you for your replies. In other words, if AD/AST 6 is taken as a cut-off point, it means that (since the Staff Regulations will not be opened) there is no solution on the horizon to solve the fundamental problem of purchase power disparity among Bruxelles and Luxembourg colleagues, regardless of their grade/step? Would there not be any legal option based on non-equal treatment of some (Luxembourg-based) staff?
Unfortunately, the purchasing-power disparity is not even on the radar of the institutions. The 12 actions for Luxembourg did not even mention it, in spite of it being a factor in many (potential) colleagues voting with their feet and choosing not to make their home in Luxembourg 🙁 As for unequal treatment, we’ve seen wins on discrimination based on nationality (https://generation2004.eu/more-clarity-about-the-changes-to-the-annual-travel-allowance/) but don’t see any based on place of work, send us any sources you find or ideas!