Government unveils package of measures to tackle poverty

Luxembourg’s government on Monday presented a raft of measures that include increasing child benefits and adjusting housing subsidies, as part of a plan to reduce poverty in the Grand Duchy.

The long-awaited national plan has been in the works since the November 2023 coalition agreement, when the governing CSV and DP promised to draw up a strategy to combat rising poverty. The Luxemburger Wort reported Monday that Prime Minister Luc Frieden pushed for the plan to be presented before the end of 2025.

“This action plan will not make poverty disappear completely,” families minister Max Hanh said at a press conference. “[But] with this action plan, we aim to put processes in place that weren’t there before.”

The government announced 106 measures in total which aim to reduce poverty by looking at social policy in numerous areas including benefit payments, childcare, housing and healthcare.

Luxembourg’s government intends to increase child benefits by €45 per child per month, as early as 2027, as reported on Friday. Adjustments will also be made to financial aid to parents for the cost of crèches or other types of after-school care, to help bear expensive childcare costs.

The plan will also try to tackle health problems linked to poverty and increase assistance for those in living situations that make them more likely to suffer health problems.

Luxembourg will create a so-called map to record where, and to what extent, child poverty puts pressure on healthcare. The map looks to identify where young people are falling through the cracks due to factors such as financial constraints or living relatively long distances from healthcare providers.

A review of how the government can help tackle redundancies is also on the cards – including how best to retrain people who lose their jobs due to automation or AI.

To try to make benefits more accessible for residents, the government will modernise the system and cut red tape, as well as tightening up measures against fraudulent benefit claims.

Hahn told reporters that Luxembourg will introduce an online platform to streamline benefit payments on which people can enter their details and immediately see what they are entitled to.

“We know that certain aids don’t arrive with certain beneficiaries because they don’t know about them,” he said, adding that the government will make the language around social aid easier to understand and less technical.

Housing subsidies will also be adjusted and automated, to make applying for them easier and processing times shorter.

“The government has tried over the last two years to reduce the poverty rate,” Hahn said, adding that it will “work very hard” on legal texts and other measures over the next few months, to put things from the plan into place.