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Social protection statistics - family and children benefits

Data extracted in February 2020.

Planned article update: March 2022.

Highlights

In 2017, the EU-27 spent just over EUR 300 billion on family/children benefits, amounting to 2.3 % of GDP.

In 2017, expenditure on family/children benefits in the EU-27 was equivalent to 8.6 % of all expenditure on social benefits.

EU expenditure on family/children benefits rose by 40.6 % in real terms between 2000 and 2017, despite a decline of 7.3 % in the number of children aged less than 18.

Expenditure on family/children benefits, 2017

Social protection benefits are transfers, in cash or in kind, made to relieve households and individuals of the burden of one or more social risks or needs. This article presents statistics on social protection benefits intended to address the risks and needs associated with family and children. The data are collected annually through the European system of integrated social protection statistics (ESSPROS).

Full article
Figure 1: Expenditure on family/children benefits, 2017
(% of GDP)
Source: Eurostat (spr_exp_sum)

Family/children expenditure in 2017

In 2017, expenditure across the EU-27 on family/children benefits was EUR 301 billion, which was 2.3% when expressed relative to GDP. The level of spending varied between EU Member States, ranging from highs of 3.4 % in Denmark and 3.3 % in Germany and Luxembourg down to lows of 1.1 % in Romania and 0.9 % in Malta (see Figure 1).


Similar variations were observed in the non-member countries for which data are shown in Figure 1, as expenditure on family/children benefits relative to GDP ranged from 3.2 % of GDP in Norway down to 0.9 % in North Macedonia; Bosnia and Herzegovina and Turkey were below this range (0.5 %).

In 2017, expenditure on family/children benefits in the EU-27 amounted to 8.6 % of total expenditure on social benefits. The relative importance of family/children benefits varied between EU Member States, accounting for 15.3 % of all expenditure on social benefits in Luxembourg, with double-digit shares also recorded in Poland, Estonia, Hungary, Germany, Denmark, Latvia, Bulgaria and Sweden. At the other end of the range, less than 5.0 % of total expenditure on social benefits in Portugal and the Netherlands was devoted to family/children benefits (see Figure 2). Among the non-member countries, the share of family/children benefits in the total expenditure on social benefits ranged in 2017 from 11.6 % in Norway down to 2.6 % in Bosnia and Herzegovina.

Figure 2: Expenditure on family/children benefits, 2017
(% of expenditure on social benefits)
Source: Eurostat (spr_exp_sum)

The proportion of expenditure on social benefits allocated to family/children benefits does not necessarily provide an ideal basis for comparison between countries because it is impacted by the amounts spent on all other functions, which are in turn affected by a vast array of socioeconomic factors. For example, expenditure on unemployment-related benefits is linked (among other factors) to the state of the labour market, while expenditure on old-age pensions is linked (among other factors) to the demographic structure of the population. In the case of expenditure on family/children benefits, there is liable to be some link with fertility rates and the share of children within the population.

A more meaningful comparison of expenditure levels for family/children benefits might be to consider expenditure per child, in other words, the level of expenditure for each resident aged less than 18. This comparison may be made in euro terms or alternatively in purchasing power standard (PPS) terms to eliminate price differentials between countries (see Figure 3). Note that the demography data used in the section refer to the average number of inhabitants aged less than 18 years.

Figure 3: Expenditure on family/children benefits per child, 2017
(EUR and PPS per child)
Source: Eurostat (spr_exp_sum) and (demo_pjan)

EU-27 expenditure on family/children benefits in 2017 amounted to an average of 3 795 PPS per child, but varied considerably across the EU Member States. The average level of expenditure on family/children benefits was exceptionally high in Luxembourg (11 518 PPS per child) where relatively high levels of spending are directed to non means-tested family-related benefits (note this figure is likely to significantly overestimate the true level of expenditure per child as a significant proportion (over a quarter) of these benefits are provided to non-residents). Elsewhere in the EU, the level of expenditure on family/children benefits in 2017 ranged from 7 595 PPS per child in Germany down to 1 147 PPS per child in Romania. Among the non-member countries shown in Figure 3 the highest level of expenditure was in Norway (6 444 PPS) while the lowest was in Turkey (348 PPS). In making this comparison, users need to be aware that the figures for some countries may be overstated because the expenditure includes amounts paid out with respect to dependent children aged 18 or over and/or relatives other than children.

Otherwise, further methodological issues may need to be taken into account when comparing data on family/children benefits between countries, such as:

  • Supplements: benefits recorded in other functions of social protection may include supplements for dependent children. In principle, such supplements should be split from the main benefit and reported separately but this is often difficult in practice so the supplements are instead reported along with the main benefit and therefore in the family/children function. For example, a range of periodic cash benefits related to disability, old-age, survivors and unemployment may include supplements for dependent children that are not reported in the expenditure of the family/children function. As a result, countries that implement a universally available family/child allowance and do not use supplements may appear to have a higher level of expenditure than countries which implement a more restricted family/child allowance and rely on supplements to top-up the income levels of families confronted by other risks/needs. Note that supplements related to housing represent an exception in that they are, by convention, always recorded in the housing function of ESSPROS, irrespective of the type of benefit to which they relate. Housing supplements to family/child allowances are therefore not included in the expenditure on family/children benefits.
  • Benefits provided through the fiscal system: with the exception of payable tax credits, family/children benefits provided through the fiscal system are not taken into account in the data. For example, non-payable tax credits and higher tax free allowances provided to those with dependants may reduce taxes paid by recipients but are not taken into account in the expenditure recorded by the ESSPROS core system.

Family/children expenditure between 2000 and 2017

EU-27 (excluding Bulgaria and Croatia) expenditure on family/children benefits (in constant price terms) rose by 40.6 % between 2000 and 2017 (see Figure 4), despite a decline of 7.3 % in the number of children aged less than 18 years. The increase in the level of expenditure for family/children benefits was slightly higher than the increase recorded for all social benefits (up overall by 39.9 %) during the same period.

Figure 4: Developments for expenditure on social benefits, family/children benefits and GDP and population aged less than 18 years, EU-27, 2000-2017
(index, 2000=100)
Source: Eurostat (spr_exp_sum), (nama_10_gdp) and (demo_pjan)

The rising level of EU expenditure on family/children benefits was underpinned by increases for all of the EU Member States for which data are available (incomplete data for Bulgaria and Croatia). During the period from 2000 to 2017, the level of expenditure on family/children benefits more than doubled (in constant price terms) in Latvia, Cyprus, Italy and Estonia, while it rose more than five-fold in Poland.

EU-27 (excluding Bulgaria and Croatia) expenditure (in constant price terms) on family/children benefits rose progressively every year between 2000 and 2010, increasing overall by 23.4 % during this period. There was a modest reduction in the level of expenditure in both 2011 and 2012 (perhaps influenced by the global financial and economic crisis). However, expenditure resumed an upward path as of 2013 and this pattern continued through to 2017.

Composition of family/children expenditure

Distribution by type of benefit

Just over three fifths (61.7 %) of expenditure on family/children benefits in the EU-27 in 2017 were disbursed in the form of periodic cash benefits, just over one third (36.1 %) as benefits in kind and a relatively small share (2.2 %) as lump-sum cash benefits (see Figure 5).

Figure 5: Expenditure on family/children benefits by type, 2017
(% of expenditure on family/children benefits)
Source: Eurostat (spr_exp_ffa)

In 2017, periodic cash benefits constituted the majority of expenditure on family/children benefits in all but four of the EU Member States: in Denmark, Spain, Sweden and Finland, a higher level of expenditure was recorded for benefits in kind than for periodic cash payments. Lump-sum benefits accounted for less than 5 % of expenditure on family/children benefits in all but four Member States — Greece (39.6 %), Cyprus (23.5 %), Ireland (7.2 %) and France (6.5 %). In Cyprus, for example, over 90 % of these lump-sum payments relate to financial assistance for families with limited resources whose children are in education [1].

Among non-member countries, periodic cash benefits were the main component of expenditure for family/children benefits in 2017 in North Macedonia, Bosnia and Herzegovina, Switzerland, Serbia and the United Kingdom, while benefits in kind were most prominent in Iceland, Norway and Turkey. Lump-sum benefits accounted for more than 5 % of expenditure on family/children benefits only in Serbia (12.6 %) and Bosnia and Herzegovina (6.8 %).

Distribution by detailed benefit type

Considering expenditure across the detailed benefit classification provides further insight into the composition of expenditure on family/children benefits (see Figure 6).

Figure 6: Expenditure on family/children benefits by detailed benefit type, EU-27, 2017
(% of expenditure on family/children benefits)
Source: Eurostat (spr_exp_ffa)

ESSPROS distinguishes four types of periodic cash benefits: (1) income maintenance in the event of childbirth; (2) parental leave; (3) family/child allowance; (4) other periodic cash benefits. Family/child allowances were by far the most important type, accounting for 41.8 % of EU-27 expenditure on family/children benefits in 2017, thus explaining why periodic cash benefits are the most important form of disbursement. Indeed, family/child allowances were the most important type of benefit in 15 of the EU Member States, with their share of total expenditure peaking in Ireland (82.8 % of all disbursements).

Similarly, ESSPROS distinguishes four types of benefit in kind: (1) child day care; (2) accommodation; (3) home help; (4) other benefits in kind. Child day care, which accounted for 21.7 % of EU-27 expenditure on family/children benefits, was the most important type of benefit in kind and the second most important benefit overall (after family/child allowances). Child day care accounted for the largest portion of total expenditure on family/children benefits in six of the EU Member States (Denmark, Sweden, Spain, Finland, Slovenia and Croatia). "Other benefits in kind", like for example leisure centres or price reductions for children, were also relatively important, accounting for close to 10 % of total expenditure on family/children benefits in the EU-27.

Lastly, lump-sum cash benefits can be broken down into three detailed benefit types: (1) birth grants; (2) parental leave benefits; (3) other lump sum cash benefits. None of these are particularly significant in terms of their contribution to EU-27 expenditure on family/children benefits as they each accounted for shares that were less than 2.0 % in 2017.

Distribution by application of means-testing

In the EU-27, just under one third of all expenditure on family/children benefits was associated with means-tested benefits in 2017 (see Figure 7). There were no means-tested benefits in Estonia, Luxembourg, Finland or Sweden. By contrast, means-tested benefits accounted for more than two thirds of all expenditure on family/children benefits in Portugal, Greece and Cyprus. There was also a wide variation among non-member countries, with 86.7 % of family/children benefits subject to means-testing in Turkey compared with just 2.4 % in North Macedonia.

Figure 7: Expenditure on means-tested family/children benefits, 2017
(% of expenditure on family/children benefits)
Source: Eurostat (spr_exp_ffa)

Composition of family/children expenditure between 2000 and 2017

Distribution by type of benefit

In the EU-27 (excluding Bulgaria and Croatia), expenditure on family/children benefits (in constant price terms) increased for two of the three forms of disbursement during the period from 2000 to 2017 (see Figure 8). Expenditure rose at a relatively rapid pace for benefits in kind, up 90.2 % overall during the period under consideration, while there was also an increase in the level of expenditure for periodic cash benefits (up by 24.0 % overall). By contrast, developments for lump sum cash benefits fluctuated considerably: initially expenditure across the EU-27 was reduced, it then grew at a rapid pace to reach a peak in the aftermath of the global financial and economic crisis, before falling at a fast pace in 2010 and 2011 and then remaining at a relatively low level for the next five years. Despite the level of expenditure on lump sum cash benefits recovering somewhat in 2016 and 2017, their overall value remained 6.2 % lower in 2017 than in 2000.

As noted, expenditure on lump sum cash benefits followed a fluctuating pattern of development. This resulted, at least in part, from the relatively small overall level of expenditure, with substantial changes for the EU aggregate often reflecting a specific change in benefits in one of the Member States. For example, the rise in expenditure between 2003 and 2004 and the subsequent fall in 2006 were primarily driven by changes in expenditure in France — at first, an increase in expenditure on birth grants and other lump sum benefits, then a decline in expenditure for other lump sum benefits. Similarly, the rise between 2006 and 2009 and subsequent fall between 2009 and 2011 may be linked primarily to changes in expenditure for birth grants in Spain.

Figure 8: Developments for expenditure on family/children benefits at constant prices by type of disbursement, EU-27, 2000-2017
(index, 2000 = 100)
Source: Eurostat (spr_exp_ffa) and (nama_10_gdp)

Based on information that is available for 25 of the EU Member States (incomplete data for Bulgaria and Croatia), the contribution of benefits in kind to overall expenditure on family/children benefits rose over the period from 2000 to 2017 from 26.6 % to 36.1 % (in current price terms). By contrast, the relative contribution of periodic cash benefits and lump sum cash benefits declined (from 70.0 % to 61.7 % and from 3.4 % to 2.2 % respectively). As such, the increased level of expenditure for benefits in kind accounted for 47.8 % of the total increase (in current price terms) in expenditure on family/children benefits between 2000 and 2017.

Distribution by detailed benefit type

In real terms, EU-27 (excluding Bulgaria and Croatia) expenditure increased between 2000 and 2017 for all detailed types of family/children benefits except for parental leave (-69.1 %), home help (-64.3 %) [2] and other lump sum benefits (-12.3 %). In the case of the first of these it is important to note that periodic parental leave benefits increased by 25.7 % over the same period, more than compensating for the overall decline in expenditure on lump sum benefits (see Table 1). This is probably linked to the promotion of family-friendly policies and a general development towards longer periods of parental leave, which may be more effectively supported through periodic rather than lump sum payments.

Table 1: Expenditure on family/children benefits by type, EU-27, 2000-2017
Source: Eurostat (spr_exp_ffa) and (nama_10_gdp)

In absolute terms, the increase in expenditure on family/children benefits between 2000 and 2017 was primarily driven by higher levels of spending for child day care, family/child allowances, other benefits in kind, other periodic benefits and income maintenance in the event of childbirth; expenditure on these types of benefit across the EU-27 (excluding Bulgaria and Croatia) rose by an amount between EUR 11.7 billion and EUR 41.4 billion during the period under consideration, while the next highest increase was for accommodation benefits in kind (an increase of EUR 6.7 billion).

The rise in expenditure on child day care is perhaps unsurprising given that EU employment policy has strongly encouraged the importance of affordable childcare in allowing parents to work (if they want to) while raising a family. Indeed, total expenditure on child day care grew in all of the EU Member States for which data are available except Czechia (where it fell from EUR 390 000 to zero), Estonia and Ireland (where there was no expenditure on child day care benefits in either 2000 or 2017).

Distribution by application of means-testing

In 2017, means-tested benefits across the EU-27 contributed almost one third of total expenditure on family/children benefits (31.2 %), while the majority of benefits were non means-tested (68.8 %). Between 2000 and 2017, EU-27 (excluding Bulgaria and Croatia) expenditure on means-tested family/children benefits rose by 58.1 % (in real terms), while expenditure on non means-tested benefits increased by 33.8 % (see Figure 9). These overall figures hide contrasting developments, insofar as means-tested benefits tended to increase at a slower pace (than non means-tested benefits) during the period up to and including 2010. Thereafter, there was a rapid increase in the level of expenditure for means-tested benefits in the EU (through to 2017), while the level of expenditure on non means-tested benefits fell for three successive years (2011-2013) and then increased at a relatively slow pace. This change may reflect the introduction of a range of policies tightening conditionality on family/children benefits in order to reduce government spending in response to the global financial and economic crisis and/or the sovereign debt crisis.

Figure 9: Developments for expenditure on family/children benefits at constant prices by application of means-testing, EU-27, 2000-2017
(index, 2000 = 100)
Source: Eurostat (spr_exp_ffa) and (nama_10_gdp)

Data sources and availability

All data presented in this article are from the European system of integrated social protection statistics (ESSPROS), specifically the core system. These data are collected from national statistical offices and/or ministries of social affairs in each country and are generally compiled from administrative sources.

Regulation (EC) No 458/2007 of the European Parliament and of the Council provides the legal basis for the collection of this data and a series of Commission Regulations provide further specifications for the implementation of this Regulation.

Context

The organisation and financing of social protection systems is the responsibility of each of the EU Member States. Nevertheless, the European Commission provides support to help reach these targets through flagship initiatives such as the European pillar of social rights and the Europe 2020 strategy. Furthermore, the European Commission provides guidance to EU Member States to modernise their welfare systems through the social investment package.

The Europe 2020 strategy for smart, sustainable and inclusive growth set a target to lift at least 20 million people out of the risk of poverty and social exclusion and to increase the employment rate to 75 % among the population aged 20-64 years.

The European pillar of social rights is built upon 20 principles, half of which are classified under the heading of Social protection and inclusion, including principle 11 which covers childcare and support to children.

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Notes

  1. Generally, education-related expenditure is outside the scope of ESSPROS. However, benefits provided exclusively to poverty-stricken families after a means-test may be included in the family/children function on the basis that the objective is to redistribute income in favour of people with insufficient resources rather than to provide free access to education.
  2. Generally, home help includes assistance to support relatives other than children. However, home help reported in the family/children function is limited to support for children. Home help targeting old people and disabled people are reported under assistance in carrying out daily tasks in the old-age and disability functions.