Short time working statements

In brief

From mid-October, companies having benefited from short-time working in the event of force majeure/coronavirus between March and June 2020, have already received a detailed monthly statement from ADEM which aims to specify the difference between advances received and short-time working subsidies actually due.

In detail

As a reminder, in the context of the COVID-19 crisis, the Luxembourg State urgently set up an accelerated short-time working system from 18 March to 30 June 2020. The compensatory allowances were then paid by ADEM in the form of advances. In order to check whether these allowances corresponded effectively to reality, any company that benefited from these subsidies had to provide statements which enabled ADEM to finalise in September the short time working in the event of force majeure statements.

It follows from these statements that a part of these advances, which were calculated on an estimated number of employees - who have been forced to reduce their activity - were often higher than the amounts actually due. According to a ministerial response in 23 September 2020, the companies concerned were therefore invited to refund the overpayment.

To summarise, the regularisation of advances can take the following forms:

1.      Reimbursement to the company:

If the balance of the statement is positive; it means the advances were not enough to compensate the short time working applied. As such, ADEM will proceed with a transfer of the outstanding balance to the company.

2.      Reimbursement to the state:

If the balance of the statement is negative, and the refund has not yet been returned to State, an adjustment for this overpayment will be sent to the company.  It will be carried out by two different mechanisms depending on whether requests for partial unemployment have been made or not as from July 2020:

a.      No short time working requested from July 2020:  The company will be asked to refund the overpayment directly on the bank account of the State Treasury. This one must be proceeded within 30 days after the statements’ reception.

b.      At least one short time working requested from July 2020: If this request has been accepted by the Conjuncture Committee, a compensation process is applicable.

The principle consists in the deduction of the overpayment received on the new allowance relating to the new short time working period. If this is not fully absorbed, the balance is then carried over from month to month up to the total amount of the debt. In the event of incomplete compensation, a refund by bank transfer may be requested.

Short time working statements

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Vinciane Istace

Partner, PwC Luxembourg

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Tel: +352 49 48 48 2171

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