Increase in childcare subsidies in Luxembourg sparks controversy

The decision by a number of private nurseries and childcare providers to increase their hourly rates by one euro from 1 January 2026 has sparked public debate. Many parents felt that the increase in state support under the Chèque-service accueil programme should have reduced their own costs rather than leading to price rises.

The Ministry of Education explained that the increase in the state contribution from €6 to €7 per hour is primarily intended to support the institutions themselves. Senior government adviser to the ministry Gilles Dhamen noted that this rate had not been revised since 2011, despite a sharp increase in operating costs, from salaries to energy and rent.

For 14 years, providers were only able to partially offset the increase in costs by introducing additional payments for parents. As a result, according to Dhamen, many private institutions found themselves in a financially vulnerable position, and the situation became critical. Since a large-scale reform of the Chèque-service accueil is only planned for next year, the authorities deemed it necessary to urgently increase the hourly state contribution as a temporary stabilisation measure.

The key objective, as emphasised by the ministry, is to maintain service quality and prevent nurseries from closing, which would lead to a reduction in places. Formally, in order to receive an additional euro from the budget, providers must increase the contract price by the same one euro. However, according to Dhamen, this should not affect the final bill for parents, as the additional state support will fully compensate for the tariff increase. The maximum contribution from parents is still limited to six euros per hour.

However, price increases are not mandatory. Paolo Fiorucci, president of the Luxembourg Federation of Childcare and Education Services (FELSEA), noted that if nurseries raise their prices by less than one euro or do not change them at all, families will directly benefit from the increase in state funding. Only if the tariff increases by more than one euro will parents face a real increase in costs. According to him, many private institutions either did not raise their prices or did so minimally.

The authorities expect that families will see significant relief with the entry into force of the comprehensive Chèque-service accueil reform, scheduled for 2027. It provides for uniform billing rules: payment only for hours actually attended, a ban on fixed packages and any additional payments. The state is expected to cover about two-thirds of the costs currently borne by parents. If the legislative process goes according to schedule, the updated system will come into effect in 2027 and should significantly shift the balance of costs in favour of families.