All Family Benefits in Luxembourg for 2027-2028

Tax reform, family allowances, childcare vouchers, early childhood tax credit... Luxembourg is rolling out a major package for families. Full overview.

The Luxembourg government has announced an unprecedented package of measures for families. Between the tax reform, increased allowances and the overhaul of the Childcare Service Vouchers (Chèque-Service Accueil, CSA), it's easy to get lost.

Here's a complete overview of everything that's changing, and when.

What's coming in 2027

Family allowances increase

According to Family Minister Max Hahn, family allowances are set to increase from 2027:

• Children up to 11 years: +€45/month
• Children aged 12 and over: +€60/month

Back-to-school allowance increase

• Children aged 6 to 11: +€60 (total: €175)
• Children aged 12 and over: +€90 (total: €325)
• New: this allowance will now be automatically indexed

Birth grant increase

• New 4th instalment added: +€580.03
• Total birth grant: €2,329.12 (4 instalments of €580.03)
• New: automatic indexation

New support for low-income families

Targeted financial support for families with school-age children:

• 4-5 years: €400/year
• 6-11 years: €1,000/year
• 12-25 years: up to €3,000/year

Childcare Service Vouchers (CSA) reform

• The State covers two-thirds of childcare costs
• Savings of up to €5,000/year per family
• Billing based on actual hours (no more flat rates or surcharges)
• 20 free hours extended to childminders for children aged 1-4

What's coming in 2028

Tax reform: the single tax class

• The 3 tax classes (1, 1a, 2) merge into one: Class U
• The tax-free threshold doubles: from €13,230 to €26,650
• Single people save around €2,400/year
• 85% of couples pay less tax

New early childhood tax credit

• €5,400/year per child under 3 (i.e. €450/month)
• Shared between separated parents
• Entirely new measure

Increased deductions

Deduction	Previous limit	New limit
Insurance & interest	€672	€900
Home savings (18-40 years)	€1,344	€1,500
Childcare/domestic help	€5,400	€6,000
Single parent credit	€3,504	€4,008

Spouse pension contributions

New: if your spouse has reduced their working hours or stopped working, you can now deduct voluntary pension insurance contributions made on their behalf.

Target 2030

A childcare place for every child

The government is committed to guaranteeing a childcare place for every child who needs one by 2030.

To achieve this:

• State contribution increased from €6 to €7/hour/child
• Rent subsidies for childcare facilities
• Additional budget of €300M/year from 2030

In summary

For a family with young children, all these measures combined could mean savings of several thousand euros per year:

• CSA savings: up to €5,000/year
• Early childhood tax credit: up to €2,160/year (depending on marginal rate)
• Family allowances: +€540-720/year per child
• Tax savings: varies by situation

The government's message is clear: "Mateneen. Fir all Famill. Fir all Kand." (Together. For every family. For every child.)