Speaking to the joint committee for finance and budget, labour, employment and social security on Monday, Romain Schneider (LSAP) said despite a forecast €162m surplus, Luxembourg had taken a hit in the health crisis with revenue estimated to increase by just 0.7% (compared to 5.7% in 2019). The expected positive balance, he said, was mainly due to the pension insurance surplus of €700m.

Economic measures

Family leave had the greatest impact on social security finances so far. The increase in benefits issued as well as the payment of the employer's share of contributions totalled €330m.

Covering the costs of work incapacity from the first day cost health system the CNS €156m, the freezing of the limit of 78 weeks of incapacity for work, cost a further €2m and the family support leave €4m.

Regarding short-time working, the reduction in social contributions reduced the total amount by €103m off social security pot, including a €25m reduction in CNS contributions.

Health insurance is expected to have a €550m deficit. The overall reserve, whose legal minimum is set at 10%, would be 11% of current expenditure (30% in 2019).

Long-term care insurance should show a positive balance of around €30m.

There would be a €15m deficit in accident insurance, but still around 1.5 times higher than the legal reserve.

Forecasts for 2021

Because of the unknowns regarding the evolution of health care and its effects on the economy, the forecast for 2021 is even more uncertain than that for the current year.

The minister said he expected a slowdown in the increase in expenditure (+1.5% compared to 9.7% in 2020), as well as a slightly higher increase in revenue (+2.8% compared to 0.7% in 2020).