Social protection statistics - social benefits


Data from November 2019.

Planned article update: November 2020.

Highlights

In 2017, the total expenditure on social protection benefits in the EU amounted to EUR 4 131 billion, or 26.8 % of GDP.

In 2017, some 46 % of total expenditure on social protection benefits in the EU was for the old age and survivors function, followed by the sickness/health care function with almost 30 %.

During the period 2008-2017, the fastest expansion in expenditure on social protection benefits was recorded for the housing and social exclusion function, while the lowest rate of growth was for the unemployment function.

Expenditure on social protection benefits, 2017

This article presents statistics relating to expenditure on social protection benefits in the European Union (EU), European Free Trade Association (EFTA) and enlargement countries. These statistics are collected through the European system of integrated social protection statistics (ESSPROS).

Full article

Expenditure on social protection benefits by function

In 2017, the total expenditure on social protection benefits in the EU-28 amounted to EUR 4 131 billion, which was equivalent to 26.8 % of gross domestic product (GDP). An analysis by function reveals that the highest levels of expenditure in the EU-28 were recorded for the old age and survivors function (largely composed of pensions), which accounted for close to half (45.8 %) of the total expenditure on social protection benefits in 2017. The next highest share, accounting for almost three tenths (29.6 %) of the EU-28’s expenditure on social protection benefits, was for the sickness/health care function, while each of the remaining four functions (shown in Table 1) accounted for single-digit shares. Among these, the highest proportion was recorded for the family/children function (8.7 % of total expenditure on social protection benefits), followed by disability (7.6 %), unemployment (4.4 %) and housing and social exclusion (4.0 %).

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Table 1: Expenditure on social protection benefits by function, 2017
Source: Eurostat (spr_exp_sum)

In France, the level of expenditure of social protection benefits was almost equal to one third of GDP

There were considerable variations between EU Member States with respect to their levels of expenditure on social protection benefits relative to GDP. In 2017, this ratio peaked at 31.7 % in France, while shares of more than 30.0 % were also recorded in Denmark and Finland (30.9 % and 30.1 % respectively). At the other end of the range, the ratio of expenditure on social protection benefits relative to GDP was 14.1 % in Romania, 14.3 % in Ireland, 14.4 % in Lithuania and 14.6 % in Latvia; relatively low ratios (in the range of 15-20 %) were also recorded in Estonia, Malta, Bulgaria, Slovakia, Czechia, Hungary, Cyprus and Poland (see Figure 1). It is important to take into consideration these overall ratios of expenditure in the different EU Member States when analysing the relative shares of different functions in total expenditure.

Figure 1: Expenditure on social protection benefits, 2017
(%, relative to GDP)
Source: Eurostat (spr_exp_sum)

More than three fifths of all expenditure on social protection benefits in Greece was accounted for by benefits for old age and survivors

As noted above, benefits for old age and survivors accounted for the highest share of EU-28 expenditure on social protection benefits in 2017, at 45.8 %. This pattern of the old age and survivors’ function recording the highest share of total expenditure was repeated in each of the EU Member States except for Ireland where the sickness/health care function was the largest. Indeed, there were nine Member States where at least half of their total expenditure on social protection benefits was directed to the old age and survivors function, with a peak of 62.8 % in Greece, followed by Portugal (58.3 %), Italy (57.8 %), Romania (56.3 %), Cyprus (55.9 %), Poland (54.1 %), Malta (52.6 %), Spain (51.6 %) and Austria (50.0 %). These relatively high shares of expenditure on benefits for old age and survivors may, in some cases, be linked to population ageing (and its related costs): for example, at the start of 2018, people aged 65 years and over accounted for 22.6 % of the total population in Italy, 21.8 % of the total in Greece and 21.5 % of the total in Portugal — these were the three highest shares in the EU. Among the non-member countries, a majority of the expenditure on social protection benefits in Turkey (61.2 %) and Serbia (55.7 %) was also accounted for by the old age and survivors function, although it is interesting to note that less than 1 in 10 of the Turkish population was aged 65 and over (8.5 %; at the start of 2018).

By contrast, there were four EU Member States where the old age and survivors function accounted for less than 40.0 % of the total expenditure on social protection benefits in 2017: Luxembourg, Denmark and Germany all recorded shares within the range of 38.0-40.0 %, while the lowest share, by far, was recorded in Ireland (33.6 %). This may, at least in part, be linked to the structure of the Irish population: as of 1 January 2018, people aged 65 years and over accounted for just 13.8 % of the total number of inhabitants in Ireland, compared with an EU-28 average of 19.7 %, while the next lowest shares among the Member States were recorded in Luxembourg (14.3 %) and Slovakia (15.5 %).

More than one third of the total expenditure on social protection benefits in Ireland, Germany, Malta, Slovenia, Croatia and the Netherlands was accounted for by benefits for sickness/health care

In 2017, the second highest level of EU-28 expenditure on social protection benefits was for sickness/health care, which accounted for almost three tenths (29.6 %) of total expenditure. This pattern was repeated in all but one of the EU Member States, with Ireland the only exception as its level of expenditure on sickness/health care was higher than that for old age and survivors as noted above. The share of sickness/health care in total expenditure on social protection benefits ranged from highs of 39.2 % in Ireland and 35.0 % in Germany down to lows of 18.3 % in Cyprus, 20.3 % in Greece and 21.3 % in Denmark.

Benefits for family/children averaged 8.7 % of total EU-28 expenditure on social protection benefits in 2017. This share ranged from a high of 15.3 % in Luxembourg down to a low of 4.2 % in the Netherlands. In a majority (17) of the EU Member States, family/children accounted for the third highest level of expenditure among the six different functions that are shown in Table 1 (behind old age and survivors and sickness/health care).

A similar analysis for the disability function reveals that in 2017 the highest shares of total expenditure on social protection benefits were recorded in Denmark (16.5 %) and Estonia (11.6 %), while shares of more than 10.0 % were also recorded in Sweden, Luxembourg and Croatia. This function had a much smaller share of total expenditure in Malta (3.5 %), Cyprus (4.4 %) and Slovenia (4.8 %). The average share of disability benefits within the total expenditure on social protection benefits was 7.6 % across the whole of the EU-28, while in eight of the EU Member States the disability function accounted for the third highest level of expenditure among the six different functions that are shown in Table 1.

EU-28 expenditure on unemployment as a share of total expenditure on social protection benefits equated to 4.4 % in 2017. This share ranged from 8.8 % in Ireland and 7.7 % in Spain to less than 2.0 % in Hungary, Poland and the United Kingdom, with a low of 0.5 % recorded in Romania. Ireland and Spain were also the only EU Member States to report that expenditure on unemployment accounted for the third highest level of total expenditure on social protection benefits among the six different functions shown in Table 1 (behind old age and survivors and sickness/health care).

Some 4.0 % of the EU-28’s expenditure on social protection benefits in 2017 was accounted for by housing and social exclusion. The relative weight of housing and social exclusion in total expenditure on social protection benefits was considerably higher in Cyprus (9.1 %), Denmark (7.4 %), the Netherlands (6.9 %) and the United Kingdom (6.7 %). Cyprus was the only EU Member State to report that housing and social exclusion accounted for the third highest level of total expenditure on social protection benefits among the six functions shown in Table 1 (behind old age and survivors and sickness/health care). By contrast, in Portugal and Poland less than 1.0 % of total expenditure on social protection benefits was used for housing and social exclusion.

It is revealing to compare the difference between the highest and lowest shares of total expenditure for each of the social protection functions. While the highest proportion of expenditure on old age and survivors (in Greece) was 1.9 times as high as the lowest proportion (in Ireland), this was the lowest ratio recorded for any of the six different social protection functions. The corresponding ratios between the highest and lowest shares were 2.1 for the sickness/health care function (Ireland compared with Cyprus), 3.7 for family/children (Luxembourg and the Netherlands) and 4.7 for disability (Denmark compared with Malta). However, the biggest differences were recorded for the housing and social exclusion function where the share in Cyprus was 11.8 times as high as the share in Poland and the unemployment function, where the highest proportion of total expenditure was recorded in Ireland which was some 18.9 times as high as the share recorded in Romania.

Developments for social protection benefits in constant prices

The development of EU-28 expenditure on social protection benefits over the period covering 2008-2017 reveals that total expenditure on all functions rose, on average, by 1.6 % per year; this analysis is based on data using constant 2010 prices (in other words, it is presented in real terms).

There were two EU Member States where total expenditure on social protection benefits fell during the period under consideration: the biggest contraction was recorded in Greece, where expenditure fell on average by 1.8 % per year while the reduction in expenditure in Hungary (down 0.6 % per year) was less marked (note there is a break in series); there was also a reduction in Serbia (down 0.5 % per year). By contrast, the highest growth rate between 2008 and 2017 was registered in Bulgaria, where expenditure on social protection benefits rose by an average of 3.6 % per year in real terms; the next highest rates of change were recorded in Malta (3.5 % per year), Poland (3.4 % per year) and Luxembourg (3.1 % per year). Among the non-member countries, there was a much faster expansion in social protection expenditure in Turkey (up 6.0 % per year).

Between 2008 and 2017, EU-28 expenditure on sickness/health care rose by an average of 1.7 % per year

The various developments observed over time in relation to expenditure on the different social protection functions reflects a range of issues, including: the overall health of each economy, changes in the level of demand for specific benefits, demographic developments, and the focus/aim of political reforms with respect to social protection legislation.

Across the whole of the EU-28, the highest growth rate for expenditure on social protection benefits during the period 2008-2017 was recorded for housing and social exclusion, where expenditure rose, on average, by 1.8 % per year. The next highest rates of change were recorded for the old age and survivors function, sickness/health care function and for the family/children function (all 1.7 % per year). By contrast, the lowest rate of change was recorded for unemployment (0.3 % per year).

Greece was the only EU Member State where the level of expenditure on old age and survivors fell (in real terms) between 2008 and 2017, down on average by 0.7 % per year. By contrast, there were five Member States where expenditure on sickness/health care fell during the period under consideration: among these, Greece once again recorded the lowest rate of change, with expenditure falling on average by 4.9 % per year. There was a higher number of Member States reporting a decline in their level of expenditure for the remaining social protection functions, with expenditure on family/children benefits falling in nine (different) Member States, unemployment benefits falling in 10, housing and social exclusion benefits falling in 11, while expenditure for disability benefits fell in 12. Note that reductions in expenditure may reflect lower demand for specific social benefits: for example, if the level of unemployment falls then it is likely that the level of expenditure on this function also declines.

During the period 2008-2017, Hungary recorded the largest reduction — among the EU Member States — in its level of expenditure on social benefits for disability (down 5.0 % per year, although it should be noted that there is a break in series), Cyprus for its level of expenditure on social benefits for family/children (down 4.1 % per year) and Romania for its levels of expenditure on social benefits for unemployment (down 8.5 %) as well as housing and social exclusion (down 5.2 % per year).

Table 2: Average annual growth rate of expenditure on social protection benefits, 2008-2017
(%)
Source: Eurostat (spr_exp_sum)

Social protection benefits in cash and in kind

Expenditure on social protection benefits may take a variety of different forms in terms of its delivery. Payments may be made in cash, paid out either at regular intervals or as lump sums, or alternatively may take the form of benefits in kind. In a similar vein, some governments choose to target certain benefits by making them means-tested (dependent upon different income levels), whereas other payments might be made to the whole of a (sub)population, for example, a winter fuel allowance (for heating) paid to all elderly persons.

Figure 2 shows that in 2017 almost two thirds (64.7 %) of the total expenditure on social protection benefits in the EU-28 was made in the form of cash payments. The share of cash benefits in total expenditure on social protection benefits peaked at 79.6 % in both Greece and Cyprus, while cash benefits also accounted for more than three quarters of total expenditure in Poland and Italy. At the other end of the range, cash benefits accounted for less than 60.0 % of the total expenditure on social protection benefits in Denmark (56.4 %) and Sweden (52.6 %), where the highest shares of benefits in kind were recorded.

Figure 2: Expenditure on social protection benefits in cash and in kind, 2017
(% of total expenditure on social protection benefits)
Source: Eurostat (spr_exp_fto)

Across the whole of the EU-28, the ratio between means-tested and non means-tested cash benefits was heavily skewed in favour of the latter. In 2017, the value of cash benefits that were not means-tested was 7.4 times as high as that for cash benefits that were means-tested. This pattern of less means-tested benefits than not means-tested benefits was repeated in all of the EU Member States and was particularly notable among the Baltic Member States, as well as in Czechia, Sweden and Bulgaria.

In 2017, more than one third (35.3 %) of the total expenditure on social protection benefits in the EU-28 was composed of benefits in kind. The vast majority of these were made up of not means-tested benefits in kind (30.3 % of total expenditure), leaving 5.0 % attributed to means-tested benefits in kind. The level of expenditure on not means-tested benefits in kind was systematically higher than the level of expenditure on means-tested benefits in kind in each of the EU Member States.

Means-tested benefits

Across the EU-28, means-tested benefits accounted for 11.8 % of all expenditure on social protection benefits in 2017. A relatively high share of this expenditure was made in relation to the housing and social exclusion function. Among the EU Member States, the share of means-tested benefits in total expenditure on social protection benefits reached a high of 36.3 % in Denmark, while a relatively high share was also recorded in Ireland (27.4 %); their shares were considerably higher than in the remaining Member States, as the third highest share was 16.7 %, recorded in the United Kingdom. At the other end of the range, means-tested benefits accounted for less than 5.0 % of the total expenditure on social protection benefits in 12 of the Member States, with the lowest shares recorded in Latvia (1.0 %) and Estonia (0.8 %). Means-tested benefits also accounted for less than 5.0 % of the total expenditure on social protection benefits in Serbia (4.9 %), Norway (3.3 %), Bosnia and Herzegovina (2.7 %) and North Macedonia (2.1 %; 2016 data).

Figure 3: Expenditure on means-tested social protection benefits, 2017
(% of total expenditure on social protection benefits)
Source: Eurostat (spr_exp_fto)

Data sources

The statistics presented in this article were collected from national statistical authorities and/or ministries of social affairs. Most of the data were compiled from administrative sources. For more detailed information, please refer to:

The European system of integrated social protection statistics (ESSPROS) was jointly developed in the late 1970s by Eurostat and representatives of the EU Member States in response to the need for a specific statistical instrument for the observation of social protection issues.

ESSPROS is a common framework which enables international comparisons of administrative data on national social protection systems. It provides a coherent comparison of social protection benefits for households and their financing across European countries.

ESSPROS is composed of a core system and a set of modules. The modules contain supplementary statistical information on particular aspects of social protection, essentially they relate to the number of beneficiaries of social protection pensions and to net social protection benefits. On the other hand, the core system contains data that have been collected by Eurostat since 1990, namely:

  • quantitative data — social protection expenditure and receipts by scheme (a distinct body of rules, supported by one or more institutional units, governing the provision of social protection benefits and their financing);
  • qualitative data — metadata for the different schemes and detailed social protection benefits.

The receipts for social protection schemes may be classified according to type and origin:

  • the type gives the nature of, or the reason for, a payment — social contributions, general government contributions, transfers from other schemes, and other receipts;
  • the origin specifies the institutional sector from which the payment is received — all resident institutional units (corporations, general government, households, non-profit institutions serving households) and the rest of the world.

The expenditure of social protection is classified by type, indicating the nature of, or the reason for, the expenditure:

  • social protection benefits;
  • administrative costs;
  • transfers to other schemes; and,
  • other expenditure.

Social protection benefits are transfers to households, in cash or in kind, that are designed/intended to relieve households of the financial burden of a number of different risks/needs that are classified as functions. The following list of functions is identified within ESSPROS:

  • old age and survivors;
  • sickness/healthcare;
  • disability;
  • family/children;
  • unemployment;
  • housing and social exclusion.


Tables in this article use the following notation:

Value in italics     data value is forecasted, provisional or estimated and is therefore likely to change;
: not available, confidential or unreliable value;

Context

The organisation and financing of social protection systems is the responsibility of each of the EU Member States. The models used in the Member States are therefore somewhat different from each other. The EU institutions play a coordinating role to ensure that people who move across borders continue to receive adequate protection; they seek to promote actions among the Member States to combat poverty and social exclusion as well as to reform social protection systems on the basis of policy exchanges and mutual learning. This policy is known as the social protection and social inclusion process, which underpins the Europe 2020 strategy and plays an important role as the EU seeks to become a smart, sustainable and inclusive economy. The Europe 2020 strategy set targets (among others) to lift at least 20 million people out of the risk of poverty and social exclusion and to increase the employment rate for the population aged 20-64 to 75 %. The European Commission provides support to help reach these targets through flagship initiatives, including the European platform against poverty and social exclusion and the New skills agenda for Europe. Furthermore, the European Commission provides guidance to Member States to assist them in modernising their welfare systems through the social investment package.

The European pillar of social rights sets out a number of key principles and rights to support fair and well-functioning labour markets and welfare systems; it forms part of the policy developments related to a deeper and fairer economic and monetary union (one of 10 European Commission priorities for the period 2015-2019). The pillar contains three main categories for action, one of which concerns social protection and inclusion.

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Social protection expenditure (spr_expend)
Social protection receipts (spr_receipts)
Pensions beneficiaries (spr_pension)
Net social protection benefits (spr_net_ben)