Luxembourg

In Luxembourg, the foreign population represents 44% of total population and is on average younger than Luxembourgish nationals. Yet, the share of expats in the 65+ population drastically decreases since migrant and cross-border workers tend to return to their country of origin when they retire. This leads to a particularly favourable demographic context for Luxembourg’s health insurance system given that the percentage of insured elderly people aged 65+ only represents about 10% of the total insured population. As a result, Luxembourg enjoys a moderate old-age dependency ratio compared to other EU countries. In the period 2013-2060, it is expected that the old age dependency ratio measured as the percentage of 65+ people compared with the 20-64-year-old population will rise from 22.2% (EU-28: 29.9%) to 38.9% (EU-28: 55.3%).

Over the same period, the share of 80+ in the Luxembourgish population is expected to grow from 3.9% to 7.8% (EU-28: 5.1%-11.8%), i.e. to more than double with most of the growth happening before 2045. At the same time, the share of people 85+ will expand by more than a factor 2 from 1.7% to 4.5% (EU-28: 2.3%-7.0. In 2012, the elderly population aged 65+ amounted to 14% of the total population.

Life expectancy for men and women at age 65 is projected to rise from 18.8/22.1 years (EU-27: 18.1/21.6) in 2018 to 22.4/26.1 years (EU-27: 22.4/25.6) in 2060.From 2010 to 2018 healthy life expectancy at 65 for both men and women decreased by 1.4 years and 3.6 years, respectively. (EU-27: +1.4 years/+ 1.5 years).

Under an assumption of no policy change the Ageing Report scenario suggests that public expenditure as share of GDP would rise from 1.3% to 4.1% (EU-27: 1.6%-3.1%) by 2070. The impact of a progressive shift from the informal to the formal sector of care in Luxembourg would entail an estimated increase by 271% in the share of GDP devoted to public expenditure on long-term care (128% on average for the EU27).

Luxembourg was one of the pioneering European countries in the development of an explicit pillar of long-term care (LTC) insurance. It was indeed created in 1999 and was adapted in 2005,2017 and 2018. The goal of the insurance is to provide compensation for the expenses generated through third-party assistance to perform daily living activities. This applies not only to the needs of older people, but also to the needs of people with disabilities. The system sought to bridge the growing benefit gap for long-term care services, which until its creation had been granted by health, work accident and invalidity insurances; otherwise, people had to rely largely on their own resources to finance their needs for care at home or in an institution. Its most recent iteration is applied since January 2018, even though the main principles of the original model have subsisted – giving priority to home care over residential care, and prioritising in-kind services over cash benefits. The principle of multidisciplinary assessment of dependency has also been maintained and is now integrated in the form of a new dependency scale consisting of 15 levels, plus an additional level 0 in the home care setting. Four principles continue to guide the system:

• Priority for rehabilitation measures over long-term care
• Priority for at-home care over institutional care
• Priority for in-kind services over cash benefits
• Continuity of long-term caregiving.

Affiliation to long-term care insurance is mandatory for salaried and self-employed workers and access to continuous insurance benefits is guaranteed from the first day of membership. For those without mandatory insurance, voluntary insurance is possible, for which a qualifying period of 1 year is applied.

The system’s financing is guaranteed by a 1.4% contribution of all earnings (including fringe benefits and capital) without any upper threshold from workers, the self-employed and all others with income, and a contribution from the state budget amounting to 40% of the total expenditure. The energy sector also provides a symbolic contribution. This pillar of social security is organised by the National Health Board (CNS), while a huge operational role is attributed to the CEO, the committee responsible for dependency assessment and for drawing up a care plan. Service providers are regulated by the Ministry of Family.

From the onset, the LTC insurance has sought to favour in-kind support over cash support. Having said that, cash benefits – which are only used in home care settings – remain visible and are claimed by 79% of home care beneficiaries (16% opt only for cash benefits while 63% prefer a mixed scheme). In financial terms, cash benefits are however limited to 10% of total expenditure on LTC. Some 67% of LTC expenditure goes on residential care and 33% on home care – the exact opposite of the number of beneficiaries (33% in residential care and 67% in home care). The average cost per beneficiary in residential care is four times the average cost in home care.

Although the number of beneficiaries is higher in the home care setting, more recently the number of persons in residential care has been increasing more rapidly, and this is projected to continue in the future at an accelerating rate. Although the LTC insurance for the elderly is defined at a high level of social protection, efficiency, cost containment and adequacy of care raise growing concerns among providers and trade unions.

The benefits in kind for the home care settings cover total cost and do not require co-payments by users. This is not the case for residential care, where the user also has co-payment charges specifically to cover the housing and catering costs (prix d’hébergement). While total public financing for residential care is some €204 per day per beneficiary, the prix d’hébergement is around €81. Those whose income is too low can claim complementary reimbursement from the Fond National de solidarité. While in relative terms (and in the international perspective) this co-payment is reasonable, it again makes home care more attractive. There is incidentally also a minimum threshold of 3.5 hours of care needed to be eligible for the residential care benefit.

The system gives increased attention to informal carers in order to keep the beneficiaries of LTC insurance integrated within their family. This is done by: assessing the level of assistance they give with activities of daily living and household tasks; providing respite care; and providing training. If the informal carer is no longer able to furnish assistance (for example due to a deterioration in their health), the system allows an easy switch to formal care. A reference document (référentiel des aides et soins de l’assurance dépendance) clearly defines the different support categories, and the circumstances under which LTC is granted.

Number of carers

According to a recent survey conducted by EIGE, people providing informal care in Luxembourg amount to 16 percent of the population. The ratio of men to women is equal, unlike in most Member States.

The beneficiary of LTC insurance may choose the type of care to be provided. The decision is taken jointly by the beneficiary and the State Office for the Assessment and Monitoring of the LTC insurance (Administration d’évaluation et de contrôle de l’assurance dépendance – AEC). If the AEC evaluates the proposed carer as able to perform the tasks required, benefits in-kind are replaced with cash benefits. These are paid to the beneficiary, who may then conclude a contract with the informal carer.

Recognition and definition of carers

A definition of informal carers (aidants informels) was included in the long-term care (LTC) insurance in 2005 and was clarified in 2017. A person who takes part in the provision of care on a regular basis, and at least once a week, may be recognised – under specific conditions – as an informal carer.

It may be:

• A relative or family member (partner, child or neighbour), or;
• A person who is hired in order to provide care to a dependent person and declared to the social security (in which case the cash benefit may be used to complement a salary).

The informal carer must be identified and assessed by the long-term care insurance (assurance dépendance) in order for the carer to be recognised as such and for the in-kind LTC services to be substituted by cash benefits. Once the carer is recognised, (s)he provides care services on her/his own or in collaboration with a network of care professionals (which can be selected by the care recipient).

Identification of carers and assessment of their needs

Dependent people are helped to remain in their family thanks to an increased attention to informal carers. Their contribution is indeed assessed at the start and respite care as well as annual trainings and regular follow-ups are provided. This goes hand in hand with the ambition to provide more frequent reassessment, which should guarantee a care plan that is better suited to the evolving needs of the dependent person.

Carers’ mental and physical health

The reform of the LTC insurance system from January 2018 introduced, among other things, a regular evaluation of the needs of informal carers as part of an improved control system in relation to the quality of LTC.

Training and recognition of carers’ skills

Еvaluation of informal carers has been introduced with the reform of LTC insurance in 2018. Out of the 6264 beneficiaries living at home who relied partly or totally on an informal carer at the end of 2019, 3446 (55.0 %) relied on an informal carer who had already been evaluated by the AEC. As the quality aspects of LTC insurance impose a regular re-evaluation of LTC beneficiaries, the remaining informal carers will be evaluated in the coming years (Inspection Générale de la Sécurité Sociale (IGSS), 2021).

The AEC is in charge of organising training for informal carers. However, an inspectorate report (IGSS, 2021) mentions that, in 2019, the summary of care for only 209 beneficiaries included training for the informal carer.

Social inclusion of carers, access to education and employment

Carer’s leave

Leave for family reasons (le congé pour raisons familiales): Leave for family reasons may be taken by an employee, self-employed person or apprentice who needs to stay with his/her sick child younger than 15 years of age or with his/her disabled child. Every working parent is entitled to 2 days leave per year and per child younger than 15 years of age or 4 days per year and per child benefiting from a disabled children’s allowance. The duration of this leave may be extended if the child is suffering from an extremely serious illness or deficiency (for example: cancer, illness requiring more than 2 weeks hospitalisation) and is limited to a maximum period of 52 weeks within a period of 104 weeks. The leave may be split up and taken on a part-time basis.

The period of leave for family reasons is treated as a period of sick leave and is paid by the employer at 100%. The employers’ mutual insurance scheme reimburses the employer for the total wage costs (gross salary + employers’ costs) during the period of continued pay.

Leave to accompany a dying person (le congé d’accompagnement): this is a special type of paid leave which enables an employee, a self-employed person or an apprentice with a close relative (i.e. spouse/partner, child, mother, father, sister of brother) at the terminal stage of a serious illness to take a leave of absence. The claimant (including part-time employees) is entitled to 5 days of leave (40 hours) per year and per case. This leave may be split up and may also be taken on a part-time basis. The leave ends on the date the terminally-ill person dies. The allowance during the period of leave to accompany a dying person is paid by the National Health Fund (CNS) without any income loss.

 

Flexible working time

An employer may determine a reference period during which work is subject to flexibility by implementing either a working hours plan (plan d’organisation du travail – POT) or a flexible time system (l’horaire mobile (HM)). The flexible time system allows employees to organise their daily working hours and time on an individual basis in accordance with their personal needs as long as they respect operational needs, co-workers’ reasonable needs, and the maximum work time allowed (10 hours a day and 48 hours a week).

Within the framework of this system, the employer may set:

• fixed daily working hours where the employees must be present;
• a time slot for flexible working hours that the employees are free to organise themselves;
• the number of overtime hours which can be transferred to the following reference period;
• the deadline allocated to compensate for missing working hours during the following reference period.

 

Cash benefits

Long-term care insurance (l’assurance dépendance): At home, the dependent person can divide their needs for assistance and care between professional care and informal care (by anyone who is not linked to a care network). It is indeed possible to replace a part of the assistance and care to which a dependent person is entitled by an amount of money which is meant to enable the dependent person to ask for the assistance and care of an informal carer. For a maximum of 10.5 hours per week, it is possible to replace the services provided by a professional caregiver with cash benefits at an amount of €25 per hour (i.e. €262.5 in total). These cash benefits are paid directly to the dependent person who should use them to pay an informal carer of her/his choice- usually a family member and most frequently a woman. Only activities of daily living and domestic tasks can be performed by an informal carer, whereas psychological support and counselling can only be offered by professional caregivers.

 

Pension rights

For informal carers who are not building up future pension rights from other professional activities, the LTC insurance guarantees entitlement to a pension for the period they provide informal care. The LTC insurance pays the employers and employee contributions up to the level of the minimum wage for a qualified worker. While this is an important instrument to support informal care, it is only available to one person.

• The 2021 Long-Term Care Report, Trends, challenges and opportunities in an ageing society, EC 2021
• The 2018 Ageing Report, Economic and Budgetary Projections for the EU Member States (2016-2070), EC, 2018
• ESPN Thematic Report on Challenges in Long-Term Care, Luxembourg, EC, 2018
• ESPN Thematic Report on work–life balance measures for persons of working age with dependent relatives, Luxembourg, 2016
• Joint Report on Health Care and Long-Term Care Systems and Fiscal Sustainability, EC, 2016
• Adequate social protection for long-term care needs in an ageing society, European Commission, 2014

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