Romain Schneider, Luxembourg's social security minister that there are no plans to build up a reserve ad infinitum and they were there to be used
Photo: Luxembourg Government
Whether it is the extended family leave, leave for family support or coverage of health and maternity insurance on the first day of incapacity to work last spring: measures decided in the wake of the coronavirus pandemic have a significant cost for the health and maternity insurance.
That is why the government's draft law 7678 provides for state contribution of €386m over four years. If approved, it would release €200m in 2020 and then €62m per year until 2023, the social security ministry said on Wednesday following a quadripartite committee meeting.
“The financial reserves in health insurance and maternity, which have been achieved in recent years thanks to prudent management, have enabled us to respond quickly to a health crisis of exceptional magnitude,” social security minister Romain Schneider (LSAP) said in a statement.
Reserves drawn down from 2021
Because revenues have been impacted by the covid-19 pandemic, they will no longer cover current expenses next year. The social security ministry announced that reserves will have to be drawn down in 2021. The overall balance is expected to be 24.4% of the estimated current expenditure that year, i.e., €870m.
For 2020, operating income is expected to reach €6.7m, compared with a surplus of €102m a year earlier. Another testament to the cost of the measures taken in response to covid-19 is expenditure. Initially expected to rise 7%, it actually grew to 20% this year to reach €3.7b. There were also less contributions: instead of increasing by 5.6%, as estimated in 2019, revenues are up only 4.3% this year.
Minister Schneider stressed that there are no plans to build up a reserve ad infinitum, but that it must also be possible to draw on it if the need arises.
This article was originally published in French on Paperjam.lu and has been translated and edited for Delano.