In 2023, 77,000 French cross-border workers were receiving unemployment benefits from France, according to a note published in October 2024 by Unédic, the body responsible for collecting contributions and paying benefits. This figure has risen by 50% since 2011. Of these, 47,000 were working in Switzerland and 17,000 in Luxembourg. These two countries alone accounted for 83% of unemployed cross-border commuters.
The unemployed are compensated in accordance with the provisions of the European regulation on the coordination of social security schemes, which stipulates that, although frontier workers pay contributions in the country where they carry out their activity, unemployment benefits are paid according to the rules and by the country of residence. It is worth noting that, on average, cross-border recipients receive higher benefits than recipients who worked locally. This difference is explained by the higher wages paid in bordering countries, particularly Switzerland. In 2023, cross-border workers who had worked in Luxembourg received an average of €1,781 per month in benefits, compared with €1,265 for all recipients of French unemployment insurance. Those who had worked in Switzerland received an average of €2,670 per month.
An initial reform in 2003
It’s a system that has been contested for years. In 2003, the European Commission proposed compensating cross-border commuters who had lost their jobs in the country where they had actually worked. Luxembourg refused to create such a direct link between the place of work and the social security schemes. For the labour minister at the time, (CSV), such a solution was “unacceptable.” He pointed to the additional costs and the lack of harmonisation of benefits in Europe, which made him fear the rise of social tourism. His counter-proposal was the introduction of a mechanism for reimbursing additional costs to the country of residence. This mechanism is still in force.
This mechanism for reimbursing additional costs to the unemployed person’s country of residence was introduced in 2010. Reimbursement is limited to a maximum of three months of benefits, extended to five months for cross-border commuters who have worked for at least one year in a neighbouring country. According to Unédic, the sums recovered under this mechanism amount to just €200m out of the €1bn spent by the agency each year.
Switzerland--which benefits from the European regulation on the coordination of social security schemes like all the other member countries of the European Economic Area--represents €720m of expenditure for Unédic before reimbursements, i.e., 72% of expenditure on compensation for cross-border recipients. This is followed by Luxembourg (€164m, or 16% of expenditure). These amounts have doubled since 2011, according to Unédic. At the end of 2023, cumulative expenditure on cross-border commuters since 2011 will amount to €11.2bn, while cumulative claims over the same period will total €2.2bn. This represents a deficit of €9bn. By 2023, France claimed €157.2m in reimbursements from Switzerland and €26.7m from the grand duchy.
New negotiations under way
How could an agreement between the social partners in France on this issue affect Luxembourg?
The current system can only be revised at European level. And the revision of the European regulation on the coordination of social security schemes has been on the agenda for several years. The principle? To give the burden of compensation to the member state that received the contributions when the cross-border worker has worked there for at least twelve months, and to have it borne by the country of residence in other cases. As a result, the current reimbursement procedure would be abolished. According to Unédic, the social partners consider this reform to be “urgent and essential.”
Two provisional trialogue agreements have been reached for 2019 and 2021. Provisional agreements that the Spanish presidency of the Council of the EU failed to pass on 8 December 2023. Nothing has moved since then. The dossier is now in the hands of the new European Commission and Roxana Mînzatu (Romania, S&D), vice-president in charge of people, skills and training--and who succeeded (LSAP), who was in charge of employment, social affairs and inclusion.
Another way forward could be direct negotiations between France and Luxembourg to obtain compensation, along the lines of the from French border municipalities based on the Swiss model.
At present, French cross-border commuters work mainly in Switzerland (48%), Luxembourg (22%), Germany (11%), Belgium (10%) and Monaco (7%). The number of cross-border commuters rose steadily between 2011 and 2020. In 2020, there were 445,000 cross-border commuters in France, an increase of 26%. This increase is mainly due to people working in Switzerland (+55% between 2011 and 2020) or Luxembourg (+27% between 2011 and 2020). The population of workers in Belgium increased only slightly (+7% between 2011 and 2020), while the population of workers in Germany has remained relatively stable each year (+1.3% between 2011 and 2020).
This article was originally published in .