Gaston Ternes

How much money does a young person need to live independently in Luxembourg? Letter to a young independent.

We have been writing and talking about the “middle class bump” for 30 years. But nothing happened, except perhaps in the wrong direction: the contribution rate for the health fund increased and the tax scale was no longer adapted to inflation. It is young people with independent status who are most concerned. In this carte blanche, Gaston Ternes makes a calculation that should motivate any politician to action.

 

You are young and after studying a master's degree abroad - in accordance with the clearly stated wishes of the political world - you chose the status of independent. After three years, you can now claim a gross annual salary of 45,000 euros or 3,750 euros per month. So you are part of the middle class in Luxembourg!

You must pay compulsory social security contributions on your salary, for pension, health insurance, long-term insurance and accident, all up to 24.63% or 924 euros per month.

So you have 2,826 euros per month left, or not…

You have to pay taxes. In your case, 5,226 euros per year and 2.5 % or 365 euros contribution to the Employment Fund. So, in total, 5,591 euros per year or 466 euros per month. Did you know that the tax scale is tiered in such a way that the marginal rate for 45,000 euros is already practically at the maximum?

So you have 2,360 euros per month left, or not…

Your university studies lead you to have to repay, during the first ten years, 640 euros per month to your bank for a loan that the State made available to you.

So you have 1,720 euros per month left, or not…

For your accommodation, you pay rent of 1,250 euros and 250 euros in charges, which is rather moderate for Luxembourg.

So you have 220 euros per month left to live on.

The idea of using a car for your business trips is out of the question for obvious reasons. You must refuse contracts because it is not possible for you to go from point A to point B in a reasonable time.

To eat and drink, you have 18 euros left per day! It is not possible to think of additional insurance with the Employers' Mutuality – with a minimum contribution of 1.13% on your gross salary – so that you are not only compensated from the 77th day in the event of illness or 'accident!

Dear young independent! I dream that we have deputies who quickly become sensitive and active for your situation. Here is a possible solution: social security contributions and taxes paid during the first ten years would only be calculated on 50% of your gross income. This time the reason would not be the same as for the deputies, but compensation so that you can live decently in our country.