Minister for Family Affairs discusses key social reforms

On Saturday, Minister for Family Affairs and Reception of Refugees Max Hahn discussed key labour and integration issues in an interview with our colleagues from RTL Radio.

Luxembourg's economy relies heavily on foreign labour, but more efforts are needed to integrate refugees, Hahn emphasised. He argued that integration should begin even before refugee status is officially granted. "People should be prepared for the working world," the minister suggested, proposing initiatives such as early access to language courses.

Each year, around 6,500 people retire in Luxembourg, while approximately 6,000 new workers enter the labour market from the education system. This leaves a significant gap in meeting the annual demand for 20,000 new workers. To address this shortfall of 13,500 positions, Hahn underscored the importance of integrating migrants into the workforce, warning that the reliance on cross-border workers is not a sustainable long-term solution.

Migration and support for residents are not opposing goals

Hahn, a member of the Democratic Party (DP), stressed that migration policies should not be seen as competing with social policies for Luxembourg residents. "Being in solidarity with people in need does not mean neglecting our own residents," he affirmed, calling for a balanced approach to migration and social support.

Expanded parental leave options

Turning to social policies, Hahn highlighted new measures introduced by the coalition government between the Christian Social People's Party (CSV) and the DP. These include a new option for parental leave, allowing parents to spread their pay over nine months instead of six, enabling them to spend more time at home with their children.

Another new measure, known as "part-time family leave," will grant parents an additional four hours of unpaid leave per week to spend with their children until they reach the age of 13.

Increased child allowance

The child allowance is set to increase, with a €26 raise for children aged six and a €56 raise for those aged twelve. Minister Hahn highlighted this measure as part of efforts to combat poverty. Additionally, he announced that recipients of the Social Inclusion Income (REVIS) will automatically receive any supplementary aids for which they qualify. This automation aims to reduce administrative delays and paperwork, streamlining the process for both beneficiaries and the administration.

Hahn also pointed to planned tax relief measures in 2025 as further evidence of the government's commitment to reducing poverty.

Expanded support for seniors

Discussing senior citizens, Hahn underscored the government's goal of ensuring that everyone can afford a place in a residential care facility if they choose. To this end, the state will provide a complementary allowance to cover costs up to the median price level, which is estimated to provide around €3,500 in aid per senior.

In addition, seniors will receive support for essential goods and a "pocket money" allowance of approximately €600. While acknowledging that these measures will increase government spending, Hahn estimated the additional costs to fall within the "single-digit million range."

Addressing pension sustainability

The minister called for a broad public debate on pension reform, stressing the importance of taking proactive measures now to avoid more drastic adjustments later. Hahn noted that discussions could involve changes to pensions or the retirement age, though no specific decisions have been made.

When asked about the transitional pension regime for civil servants employed before 1999, Hahn stated that the need for reform in this area is "certainly smaller" compared to other aspects of the pension system.

Read also: Luxembourg pension debate: Why are civil servant pensions so much higher than those of employees?