What will change in 2023 for residents and cross-border workers

After a year 2022 marked by the outbreak of the energy crisis and the marked rebound in the inflation rate2023 will begin with a series of measures intended to limit the soaring cost of living in Luxembourg.

Thus, the tripartite decided in September to unblock more than one billion euros to lower inflation by four percentage points and land at a rate of 2.6%.

Energy prices under control

In order to achieve this, the energy prices will be capped. For gas, they cannot exceed 15% of the 2022 level. The measure is limited until December 31, 2023 but also concerns – retroactively – the last three months of 2022.

As for electricity, its cost will be stabilized for the whole year at the level of 2022 provided that the consumption of the household does not exceed 25,000kWh per year.

VAT down

Another flagship measure of the tripartite, the reduction in the VAT rate ofa percentage point is intended to curb inflation. In the case of fuels, however, it should be noted that the change to 16% VAT will coincide with the €5 increase in the CO2 tax.

Indexations and revaluations under the tree

On the income side, a few adjustments are on the horizon, starting with the automatic salary indexation. The first is looming for the first quarter, the second in April constitutes the postponement of the July 2022 tranche and the third is looming for the end of the year, according to Statec’s central scenario.

It should be noted that the mechanism compensating for the postponement of the July 2022 tranche, energy tax credit (CIE), is expected to end alongside the triggering of linked indexing.

Alongside these three increases of 2.5% each, employees who receive the social minimum wage will see their income increase by 3.2% from the 1is January. As for retirees, they will see their pension increase by 2.2% on the same date. In both cases, the 2.5% index brackets will also raise the income level of the beneficiaries.

A little less obstacles to telework

As for cross-border workers, they will have the possibility of working up to 34 days a year outside Luxembourg while remaining taxed there, at least for those who live in France et in Belgium. German residents retain the cap of 19 days per year.

Health boosts

In the health register, 2023 coincides with the arrival of full reimbursement and without age limit for contraception ways. Until then limited to 80% of the amount and reserved for those under 30, the measure therefore extends and concerns not only the contraceptive pill but also emergency, intra-uterine devices (IUDs), diaphragms (spermicides in combination), cervical caps (spermicides in combination) as well as male and female condoms. The only condition to benefit from this full reimbursement by the CNS: to have a medical prescription. Note that the services of the eSanté agency are also called upon to increase this year.

The end of gas boilers

In the real estate chapter, new constructions will now be without gas boiler. “Heat pumps will become the benchmark technology”, said the Minister of Energy Claude Turmes (the Greens) last spring.

Finally, all dwellings must be equipped with smoke detectors from 1is January. An informed resident is worth two.

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