The new index has arrived… but it was a difficult birth!

All salaries and pensions will increase by 2.5% on April 1, 2023. The new index has arrived… but it was a difficult birth, to say the least.

We had to wait no less than nine months for this index tranche to finally reach our wallets. While this kind of delay may be perfectly normal for a pregnancy, it’s far less so when it comes to the index…

Triggered and actually due on July 1, 2022, the payment of this index tranche was postponed to April 2023 due to the government’s decision in March 2022 to massively manipulate the index, in particular by providing for a minimum 12-month delay between the payment of two index tranches, regardless of the level of inflation.

At the time, only the OGBL opposed this manipulation of the index, and only the OGBL refused to sign the March 2022 tripartite agreement that included this measure, putting the index in great danger.

Attacked from all sides, the OGBL nevertheless maintained its red line: touching the index was out of the question! Thousands of OGBL delegates and militants mobilized and took to the streets. All OGBL structures fought relentlessly to defend this pillar of the Luxembourg social model.

And the fight paid off: a few months later, at a new tripartite meeting, it was decided, this time with the OGBL, to restore the normal operation of the index. Had it not been for the opposition of the OGBL and the normalization of the index, the index tranche  paid last February, for example, would have been postponed, even for 14 months. In fact, it was initially planned that this tranche would not be paid until April 1, 2024, maintaining the logic of 12 months between two tranches.

Unfortunately, the postponement of the index tranche due in principle last July was maintained by the government and this tranche will finally be paid in April 2023. It should be noted, however, that the payment of this tranche will put an end to the manipulation of the index that began in March 2022.

Only the OGBL has defended the index.

And it will continue to do so as often as necessary.

Everyone talks about the index.

We defend it.

Some employees and pensioners may be in for a nasty surprise when they receive their April salary or pension statement. Despite the payment of a new index tranche, the net amount of their salary or pension could be lower than that of the previous month.

This is because the degressive energy tax credit introduced by the government last year will no longer apply from April. This tax credit was introduced by the “tripartite” agreement of March 2022 – which, it should be remembered, was not signed by the OGBL – to “compensate”, so to speak, for the postponement of the index tranche from July 1, 2022 to April 1, 2023, but also for the increase in the CO2 tax for the lowest salary categories. The OGBL has always preferred structural measures, such as adjusting the tax scale in line with inflation or increasing, extending and regularly adjusting the cost-of-living allowance, to such temporary measures.

In the absence of other measures, it now hopes that the new “economic tax credit” (crédit d’impôt conjoncture) decided at the last tripartite meeting to compensate for the non-adjustment of the tax scale, which will be applied retroactively from January 1, 2023, will soon be approved by the Chamber of Deputies and paid to the beneficiaries. Households really need it.

Published by OGBL on April 4th, 2023