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The European voice for informal carers

LUXEMBOURG

Towards carer-friendly societies
Demographic background

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).

Current Long-term care provision

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 and 2017. 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. The latest year for which data are available some 15% of individuals applied for this assistance. 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.

Carer-friendly policy environment

Number of carers

Data about the number of informal carers in Germany greatly varies depending on whether we use official statistics, which is outdated and clearly underestimates the prevalence of informal care – or unofficial datasets which focus on self-reported informal care provision. According to official data, around 5 million people provide informal care to a dependent person in Germany (i.e. 4% of the total population). However, the data collected through the European Quality of Life Survey (2016) shows that Germany has one of the highest rate of self-reported informal care provision at around 22% of the total population – amounting to more than 18 million carers.

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.

Social inclusion of carers, access to education and employment

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.

References
  • 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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