If the current cap on social security contributions for health insurance had been lifted last year, the National Health Fund (CNS) would have collected an estimated €320 million more in revenue. This would have represented a 6.8% increase compared to the CNS’s total income of nearly €4.7 billion in 2023.
However, such a measure would also have financial implications for the government because it co-finances the health insurance system, meaning that an end to the contribution ceiling would have cost public finances roughly €195 million. This is partly due to the state’s share in CNS funding and the reduction in tax receipts, as higher social security contributions would be exempt from taxation.
These figures were provided by Minister of Health and Social Security Martine Deprez in her written reply to a parliamentary question submitted by Marc Baum of The Left (Déi Lénk).
The CNS ended last year with a budget deficit of around €100 million. In light of rising expenditure, working groups within the autumn Quadripartite are expected to draft measures aimed at curbing spending increases to avoid the need for higher social security contributions.
Currently, social security contributions for both health insurance and pensions are capped at five times the minimum wage. Both the Luxembourg Socialist Workers’ Party (LSAP) and The Left have floated the idea of removing this ceiling to strengthen the CNS’s finances and restore balance to the system.
