The reform of social security coordination within the European Union has cleared a key step towards adoption, after a majority of member states approved the compromise text in Brussels on Wednesday.
The agreement, negotiated last week under the Cypriot Council Presidency, now awaits a final vote in the European Parliament, which is expected before or shortly after the summer recess, followed by formal adoption at ministerial level.
Luxembourg voted against the proposal, alongside a minority of member states, but was unable to block its passage. According to diplomatic sources, 21 of the 27 EU countries supported the deal.
The reform addresses the coordination of social security systems, in particular the treatment of cross-border workers. Under the new rules, responsibility for unemployment benefits will shift to the country of last employment.
This means that the member state where a cross-border worker was most recently employed will be required to cover unemployment benefits for a period of up to six months.
For Luxembourg, where more than 200,000 cross-border commuters work – representing approximately 47% of the workforce – this change is expected to have a significant budgetary impact.
Labour Minister Marc Spautz estimated during a parliamentary debate that the additional annual cost could reach €200 million. While reiterating the economic importance of cross-border workers, he indicated that the government’s priority would now be to ensure efficient implementation and limit potential abuse
Luxembourg unemployment rate stable as job vacancies rise
Transition period and administrative implications
The compromise EU text includes provisions recognising Luxembourg’s specific situation. The country will benefit from a transition period of up to seven years before the rules are fully applied.
During this period, the government is expected to scale up the capacities of the national employment agency, Adem, which will be tasked with supporting unemployed cross-border workers under the new framework.
Spautz also said that Luxembourg intends to use the transition phase to strengthen control mechanisms, in cooperation with neighbouring countries including Belgium, France and Germany.
“The new rules will strengthen social protection for mobile workers, improve access to social benefits and align them with social security,” said Roxana Minzatu, EU Commissioner for Social Affairs, following the vote. “They will make it easier for companies to provide cross-border services, including through the use of digital tools.”
“The new rules will also improve cooperation between national authorities by optimising the exchange of information, introducing clearer procedures and deadlines, and providing new tools to prevent and combat fraud, abuse and errors,” Minzatu added.
Independent workers still in limbo on access to unemployment benefits
(This article has first been published on the Luxemburger Wort. AI translated, with editing by Lucrezia Reale.)
