Social protection statistics - social benefits


Data from December 2017

Planned article update: November 2019

Highlights

In 2015, the total expenditure on social protection benefits in the EU amounted to €4 068 billion, or 27.5 % of GDP.

In 2015, close to half of the 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 %.

Expenditure on social protection benefits, 2015

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 2015, the total expenditure on social protection benefits in the EU-28 [1] amounted to EUR 4 068 billion, which was equivalent to 27.5 % 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 (45.5 %) of the total expenditure on social protection benefits in 2015. The next highest share, accounting for almost three tenths (29.9 %) 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 (8.6 % of total expenditure on social protection benefits), followed by disability (7.3 %), unemployment (4.7 %) and housing and social exclusion (4.0 %).

Table 1: Expenditure on social protection benefits by function, 2015
Source: Eurostat (spr_exp_sum) and (nama_10_gdp)

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 2015, this ratio peaked at 32.0 % in France, while shares of more than 30.0 % were also recorded in Denmark and Finland (both 31.1 %). At the other end of the range, the ratio of expenditure on social protection benefits relative to GDP was 14.3 % in Romania, 14.6 % in Latvia, 14.8 % in Lithuania, 15.6 % in Ireland and 16.2 % in Estonia; relatively low ratios of between one fifth and one sixth of GDP were recorded in Malta, Bulgaria, Slovakia, the Czech Republic, Poland (2014 data) and Hungary (see Figure 1). It is important to consider 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, 2015
(%, relative to GDP)
Source: Eurostat (spr_exp_sum) and (nama_10_gdp)

Almost two thirds 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 2015, at 45.5 %. 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. Indeed, there were 10 Member States where more than half of their total expenditure on social protection benefits was directed to the old age and survivors function, with a peak of 65.4 % in Greece, followed by Poland (59.9 %; 2014 data), Italy and Portugal (both 58.3 %), Romania (55.2 %), Cyprus (54.9 %), Malta (51.2 %), Austria (50.3 %), Latvia and Bulgaria (both 50.2 %). 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 2016, people aged 65 years and over accounted for 22.0 % of the total population in Italy and for 21.3 % of the total in Greece — these were the two highest shares in the EU. Among the non-member countries, a majority of the expenditure on social protection benefits in Turkey (60.2 %; 2014 data) and Serbia (55.9 %) 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.

By contrast, there were three 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 2015: Luxembourg and Germany each recorded shares within the range of 38.0-40.0 %, while the lowest share, by far, was recorded in Ireland (32.9 %). This may, at least in part, be linked to the structure of the Irish population: as of 1 January 2016, young people aged less than 15 accounted for more than one fifth (21.9 %) of the total number of inhabitants in Ireland, compared with an EU-28 average of 15.6 %, while the next highest shares among the Member States were recorded in France (18.5 %) and the United Kingdom (17.7 %).

More than one third of the total expenditure on social protection benefits in the United Kingdom was accounted for by benefits for sickness/health care

In 2015, the second highest level of EU-28 expenditure on social protection benefits was for sickness/health care, which accounted for almost three tenths (29.9 %) of total expenditure. This pattern was repeated in each of the EU Member States, with the sickness/health care function systematically recording the second highest share, although there was almost no difference in the levels of expenditure between old age and survivors and sickness/health care in Ireland. The share of sickness/health care in total expenditure on social protection benefits ranged from highs of 34.9 % in the United Kingdom and 34.7 % in Germany down to lows of 19.6 % in Greece and 20.2 % in Denmark.

Benefits for family/children averaged 8.6 % of total EU-28 expenditure on social protection benefits in 2015. This share ranged from a high of 15.5 % in Luxembourg down to a low of 3.9 % in the Netherlands. In a majority (16) 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 2015 the highest shares of total expenditure on social protection benefits were recorded in Denmark (13.0 %) and Croatia (12.2 %), while this function had a much smaller share of total expenditure in Malta (3.7 %) and Cyprus (3.3 %). The average share of disability benefits within the total expenditure on social protection benefits was 7.3 % across the whole of the EU-28, while in nine 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 4.7 % in 2015. This share ranged from 12.2 % in Ireland and 10.7 % in Belgium — the only EU Member States with double-digit shares — down to less than 2.0 % of total expenditure in Hungary, the United Kingdom and Poland (2014 data), with a low of 0.7 % recorded in Romania. Belgium and Spain (9.0 %) were 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 2015 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 (7.7 %), Denmark and the United Kingdom (both 7.0 %). 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 Italy, Portugal, Estonia and Greece less than 1.0 % of total expenditure on social protection benefits was used for housing and social exclusion.

It is interesting 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 sickness/health care in the United Kingdom was 1.8 times as high as the lowest proportion in Greece, 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 2.0 for the old age and survivors function (Greece compared with Ireland), 4.0 for disability (Denmark compared with Cyprus) and also 4.0 for family/children (Luxembourg and the Netherlands). However, the biggest differences were recorded for the housing and social exclusion function where the share in Cyprus was 12.9 times as high as the share in Greece and the unemployment function, where the highest proportion of total expenditure was recorded in Ireland which was some 16.7 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 2008-2015 reveals that total expenditure on all functions rose, on average, by 2.0 % per annum; this analysis is based on data using constant 2010 prices (in other words, it is presented in real terms).

There were four 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 2.3 % per annum, while the reductions in expenditure in Hungary (-0.9 % per annum), Lithuania (-0.6 % per annum) and Croatia (-0.1 % per annum) were less marked; there was also a reduction in Serbia (-0.4 % per annum). By contrast, the highest growth rate between 2008 and 2015 was registered in Bulgaria, where expenditure on social protection benefits rose by an average of 4.2 % per annum in real terms; the next highest rates of change were recorded in Malta (3.8 % per annum) and Luxembourg (3.6 % per annum). Among the non-member countries, there was a much faster expansion in social protection expenditure in Turkey (up 5.7 % per annum; 2008-2014), while relatively high rates of growth were registered in Norway (3.8 % per annum) and Switzerland (3.6 % per annum).

Between 2008 and 2015, EU-28 expenditure on sickness/health care rose by an average of 2.2 % per annum

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 within 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 2008-2015 was recorded for the sickness/health care function, where expenditure rose, on average, by 2.2 % per annum. The next highest rate of change was recorded for the old age and survivors function (2.0 % per annum), while the rates of change for expenditure on the housing and social exclusion function (1.9 % per annum), family/children (1.7 % per annum), unemployment (1.4 % per annum) and disability (1.2 % per annum) were below the EU-28 average for total expenditure on all forms of social protection benefits.

Greece was the only EU Member State where the level of expenditure on old age and survivors fell (in real terms) between 2008 and 2015, although the average rate of change was modest at -0.1 % per annum. By contrast, there were seven 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 7.2 % per annum. There was a higher number of Member States reporting declines in their levels of expenditure for the remaining social protection functions, with expenditure on housing and social exclusion benefits and on unemployment benefits falling in nine (different) Member States, while expenditure for disability and for family/children benefits fell in 13 (different) Member States. 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 will also decline.

During the period 2008-2015, Hungary recorded the largest reduction — among the EU Member States — in its level of expenditure on social benefits for disability (-5.2 % per annum), for housing and social exclusion (-9.2 % per annum) and for unemployment (-12.0 % per annum), while the biggest reductions in social protection expenditure on family/children were recorded in Cyprus and Lithuania (respectively -6.4 % and -6.7 % per annum).

Table 2: Average annual growth rate of expenditure on social protection benefits, 2008-2015
(%)
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 paid to all elderly persons aged 75 and over.

Figure 2 shows that in 2015 almost two thirds (64.5 %) 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 82.7 % in Cyprus, while cash benefits also accounted for more than three quarters of total expenditure in Greece, Poland (2014 data) 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 the United Kingdom (58.3 %) and Sweden (52.9 %), where the highest shares of benefits in kind were recorded.

Figure 2: Expenditure on social protection benefits in cash and in kind, 2015
(% 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 2015, the value of cash benefits that were non means-tested was 9.6 times as high as that for cash benefits that were means-tested. This pattern was repeated in all but one of the EU Member States and was particularly clear among the Baltic Member States, as well as in Sweden and the Czech Republic. By contrast, the level of expenditure on means-tested cash benefits in Denmark was higher than that for non-means tested cash benefits.

In 2015, more than one third (35.5 %) 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 non means-tested benefits in kind (30.6 % of total expenditure), leaving 5.0 % attributed to means-tested benefits in kind. The level of expenditure on non 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 11.0 % of all expenditure on social protection benefits in 2015. 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 36.4 % in Denmark, while a relatively high share was also recorded in Ireland (30.2 %); their shares were considerably higher than in the remaining Member States, as the third highest share was recorded in the Netherlands, at 14.5 %. 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 13 of the Member States (data for Poland refer to 2014), with the lowest shares recorded in Latvia (1.1 %) and Estonia (0.5 %); means-tested benefits also accounted for less than 5.0 % of the total expenditure on social protection benefits in Serbia (4.6 %) and Norway (3.6 %).

Figure 3: Expenditure on means-tested social protection benefits, 2015
(% 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 institutes 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 from 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, while the EU plays a coordinating role to ensure that people who move across borders continue to receive adequate protection. The EU seeks to promote actions among the Member States to combat poverty and social exclusion, and 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 — it underpins the Europe 2020 strategy and will play an important role as the EU seeks to become a smart, sustainable and inclusive economy. The Europe 2020 strategy sets 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)



Notes

  1. Throughout this article, all references to 2015 data for the EU-28 aggregate concern estimated data. At the time of data extraction (December 2017), there was information available for the 2015 reference period for all but one of the EU Member States, namely, Poland. As such, the data presented for the EU-28 are based on sums, shares, averages and ratios that have been composed by aggregating 2015 data for 27 Member States with the 2014 data for Poland.