In order to alleviate the pressure of rising prices on the purchasing power of the most vulnerable households, the agreement signed between the government, the Union des entreprises luxembourgeoises (UEL) and the trade unions CGFP and LCGB provides for three measures supporting both tenants and owners.
1. Anticipatory introduction and adaptation of the rent subsidy
The rent subsidy will be adapted on 1 August 2022 so that all tenants up to decile 5 income, i.e. the median standard of living, will be eligible. In addition, the monthly rent subsidy will increase for all beneficiaries by an average of 50% compared to the current situation. Thus, large families will be entitled to receive up to 400 euros per month in rent subsidies.
The adjustment of the subsidy will be made automatically for all households currently receiving the rent subsidy and will of course be effective for all future applications.
2. Introduction of a rent freeze until 31 December 2022
In order to avoid that the increase of the rent subsidy may be consumed - even partially - by rent increases, a temporary freeze for any rent increase will be introduced until the end of 2022.
3. Revision of the PRIMe house aid scheme and introduction of a '100% social top-up' in this aid scheme
The PRIMe House aid scheme, which will enter into force in the next few days, with retroactive effect from 1 January 2022, will be supplemented by a 'social top-up'.
Thus, subsidies for heating systems based on renewable energy will no longer have to be pre-financed by the beneficiaries. The state will pay the amount of the state subsidy directly to the company that carried out the work.
In addition, PRIMe House beneficiaries will be able to apply to the Single point of contact for housing assistance for a '100% social top-up' that can result in a doubling of the PRIMe House subsidy, depending on the beneficiary's household income. The aim of this additional support is to enable the affected households to avoid the risk of fuel poverty.
This additional support will be introduced as part of the ongoing reform of individual housing subsidies and is expected to come into effect in early 2023. However, it will apply retroactively to all PRIMe House applications for which final approval has been given by the Ministry of the Environment, Climate and Sustainable Development since 1 January 2022.
In order to respond in a targeted and specific way to the real needs of households, tenants in the private market and families with lower incomes are further supported by these three measures.
Press release by the Ministry of Housing