Luxembourg's social protection system is stable
Tim Mossholder, Unsplash
The Luxembourg Minister of Health and Social Protection presented data on the state of the social protection system over the past 15 years, summarising the results and highlighting the main challenges for the future.
From 2008 to 2023, the balance of the social protection system ranged from €671 million to €1,219 million. On average, budget estimates were underestimated by €55 million annually. The reasons for the deviations were an average annual underestimation of revenues of €160 million (-1.5%) and an average annual underestimation of expenditure of €104 million (-1.1%).
Since 2015, following the introduction of the law on multi-annual financial planning, the figures have been revised. The average annual deviation then increased to €95 million. The main contribution to the deviation was the understatement of revenues by €218 million (-1.8%) and expenses by €124 million (-1.1%).
From 2020, public hospitals are included in the social protection subsector, which had a minor impact on the overall balance, but required a revision of the calculation of financial flows.
The forthcoming reforms are aimed at:
- Improving the accuracy of budget planning.
- Optimisation of social expenditure.
- Achieving sustainability of the pension system in the long term.
Luxembourg's social protection system is resilient but requires further reforms to adapt to demographic and economic challenges. The upcoming discussions on pension reforms will be key to ensuring its stability.
