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Luxembourg’s government has approved a major overhaul of family allowances, increasing payments by up to €720 per child annually to combat rising child poverty. The reforms, approved by MPs on 15 October, reflect alarming statistics: in 2024, 24.1% of under-18s in Luxembourg were at risk of poverty, rising to 31.8% in single-parent families and 38.5% in households with three or more children. The increases will see monthly child benefit rise to €352.35 for children aged 0–5, €375.58 for those aged 6–11, and €425.34 for children aged 12 and over. Back-to-school allowances will also increase by €60 for younger children and €90 for older ones. For a family with two children aged 8 and 14, these changes represent a total annual gain of €1,410, excluding indexation. A key innovation is the extension of automatic indexation to all family benefits, ensuring payments keep pace with inflation. The government estimates the reforms will cost €166.4 million in 2027, rising to €217.3 million by 2030. The changes also clarify eligibility for cross-border workers’ children, aligning with European case law to support blended families. The reforms follow years of advocacy by Family Affairs Minister Max Hahn (DP), who framed the increases as essential to tackling poverty while preventing erosion of benefits by rising living costs. The government’s explanatory memorandum highlighted the urgent need for action, with poverty rates among children remaining stubbornly high despite Luxembourg’s strong economy.
Luxembourg’s government has approved a major overhaul of family allowances, increasing payments by up to €720 per child annually to combat rising child poverty. The reforms, approved by MPs on 15 October, reflect alarming statistics: in 2024, 24.1% of under-18s in Luxembourg were at risk of poverty, rising to 31.8% in single-parent families and 38.5% in households with three or more children.
The increases will see monthly child benefit rise to €352.35 for children aged 0–5, €375.58 for those aged 6–11, and €425.34 for children aged 12 and over. Back-to-school allowances will also increase by €60 for younger children and €90 for older ones. For a family with two children aged 8 and 14, these changes represent a total annual gain of €1,410, excluding indexation.
A key innovation is the extension of automatic indexation to all family benefits, ensuring payments keep pace with inflation. The government estimates the reforms will cost €166.4 million in 2027, rising to €217.3 million by 2030. The changes also clarify eligibility for cross-border workers’ children, aligning with European case law to support blended families.
The reforms follow years of advocacy by Family Affairs Minister Max Hahn (DP), who framed the increases as essential to tackling poverty while preventing erosion of benefits by rising living costs. The government’s explanatory memorandum highlighted the urgent need for action, with poverty rates among children remaining stubbornly high despite Luxembourg’s strong economy.
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