Like any cross-border worker, as retirement approaches, one question naturally arises: “Which country will I be covered by?”
Social security within the European Union is governed by European regulations. They are based on a simple principle: a person can be affiliated with only one country and can therefore contribute to only one social security system on all of their income. So how does this affect pension applications and payments for cross-border workers in Luxembourg?
In this article, we look at how to apply for a pension and the different situations that determine where your pension will be paid, depending on your career.
How does the cross-border pension system work in Luxembourg?
The payment of your pension depends on three different situations:
- You have paid contributions in Luxembourg for less than one year and the rest in your country of residence;
- You have paid contributions in Luxembourg and in other EU or EFTA countries;
- You have completed your entire career in Luxembourg.
If a worker was insured in Luxembourg for less than one year, the pension fund in their country of residence will pay their pension.
If a worker has completed part of their career in Luxembourg and part in other EU or EFTA countries, each country where they were insured for at least one year will pay its share of the pension. In this case, each country will begin paying its share once the worker has reached that country's minimum retirement age.
For example: A Belgian cross-border worker may receive a Luxembourg pension from the age of 57 through early retirement. Belgium, however, will only begin paying the Belgian pension once the worker has reached the Belgian pension age of 65.
Finally, if the worker has completed their entire career in Luxembourg, the Luxembourg pension fund will pay the full pension.
How do you apply for your pension?
Here, there are also two different situations.
If the insured person lives in a country where they have worked and has also worked in Luxembourg for more than one year, they must first submit the pension application in their country of residence. The applicant must indicate that they have also paid contributions in other countries. The relevant authority will then contact the pension funds in those countries.
If the insured person has never worked in their country of residence, or if they live in another country where they have not worked, the application must be submitted to the country where they most recently worked.
How does healthcare coverage work?
Several situations are possible, depending on the insured person's career.
The main cases are:
- The insured person has never worked in their country of residence;
- The insured person has worked in several countries, including their country of residence.
In the first case, if the insured person has spent their entire career working in Luxembourg, they will remain affiliated with Luxembourg, and Luxembourg will cover their healthcare costs.
If the insured person has worked both in their country of residence and in Luxembourg and receives a pension from their country of residence, that country will cover healthcare costs.
Please note: Under a European regulation, an employee who has worked in Luxembourg for at least two years during the five years preceding their pension application is entitled to healthcare benefits in kind in the country of their most recent employment.
Find out more about retirement as a cross-border worker in Luxembourg on the Les Frontaliers Grand Est website (available in French and German).
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