Social protection expenditure in 2005, EU27 spent 27.2% of GDP on social protection

In the EU27, social protection expenditure1 accounted for 27,2% of GDP in 2005, in the EU252 this ratio was 27,4% in 2005, compared with 27,3% in 2004 and 27,4% in 2003.

The EU27 average continued to mask major disparities between Member States. Social protection expenditure as a percentage of GDP was above 30% in 2005 in Sweden (32.0%), France (31.5%) and
Denmark (30.1%), and below 15% in Latvia (12.4%), Estonia (12.5%), Lithuania (13.2%) and Romania (14.2%).
These disparities reflect differences in living standards, but are also indicative of the diversity of national social protection systems and of the demographic, economic, social and
institutional structures specific to each Member State.

In the EU27 in 2005, expenditure on old age and survivors benefits accounted for 46% of total spending on social protection, sickness & health care benefits for 29%, disability benefits and
family & children benefits for 8% each, unemployment benefits for 6% and housing & social exclusion benefits for 4%.
This News Release is based on a report3 published by Eurostat, the Statistical Office of the European Communities.
Highest growth rates of social protection expenditure per capita in Romania, Ireland and Hungary Between 2000 and 2005, social protection expenditure per capita grew in real terms in all Member
States for which data are available. The highest average annual growth rates were registered in Romania (10.9%), Ireland (9.3%)
and Hungary (8.0%), while the lowest were found in Germany (0.2%), Slovakia (1.3%) and Austria (1.4%). The EU27 average was 2.1%.

In 2005, social protection expenditure per capita in PPS4 (Purchasing Power Standards), which eliminates price level differences between countries, was more than ten times higher in Luxembourg5
than in Romania. The highest spending in PPS per capita was recorded in Luxembourg at more than twice the EU27 average, followed by Denmark and Sweden, both at 40% above the average. The lowest
spending was found in Romania (18% of the EU27 average), Bulgaria (21%), Latvia (23%), Lithuania (26%) and Estonia (29%).
Share of social contributions in funding ranges from 29% in Denmark to 84% in Slovakia.

In 2005, the two main sources of funding of social protection at EU27 level were general government contributions from taxes, making up 38% of total receipts, and social contributions (59%).
These contributions are divided into those paid by the persons protected i.e. employees, self-employed persons and retired person (21% of total receipts) and those paid by the employers
(38%).
More than 70% of total receipts came from social contributions in Slovakia (84%), the Czech Republic (81%), Estonia (80%), Belgium and Romania (both 73%). Conversely, more than 50% of total
receipts were made up of taxes in Denmark (63%), Ireland and Cyprus (both 54%), and the United Kingdom (51%).

Social protection expenditure and funding, 2005

% of GDP

Annual
average
growth
2000-05*, %

Expenditure
per capita in
PPS
(EU27=100)

Funding of social protection:

General
government
contributions

Social
contributions

Of which from:

Other
receipts

Employers

Protected
persons***

EU27

27.2

2.1

100

38

59

38

21

3

Belgium

29.7

3.4

136

25

73

51

22

2

Bulgaria

16.1

:

21

36

61

42

18

3

Czech Republic

19.1

4.2

54

18

81

54

26

1

Denmark

30.1

2.4

140

63

29

10

19

8

Germany

29.4

0.2

124

36

63

35

28

2

Estonia

12.5

7.7

29

20

80

79

0

0

Ireland

18.2

9.3

96

54

40

25

15

6

Greece

24.2

5.2

84

31

58

36

23

11

Spain

20.8

3.2

78

33

65

49

16

2

France

31.5

2.6

132

31

66

45

21

4

Italy

26.4

1.7

102

41

57

42

15

2

Cyprus

18.2

6.1

63

54

35

20

15

12

Latvia

12.4

4.9

23

35

64

47

17

1

Lithuania

13.2

5.5

26

40

60

54

6

1

Luxembourg

21.9

5.4

213

45

51

27

24

3

Hungary

21.9

8.0

52

35

58

42

16

7

Malta

18.3

2.8

51

35

63

44

19

3

Netherlands

28.2

2.3

136

20

68

33

34

12

Austria

28.8

1.4

136

33

65

38

27

2

Poland

19.6

3.3

37

39

50

28

22

10

Portugal**

24.7

3.8

66

42

48

48

16

10

Romania

14.2

10.9

18

12

73

50

24

15

Slovenia

23.4

2.7

75

32

67

27

40

1

Slovakia

16.9

1.3

37

14

84

62

22

2

Finland

26.7

3.4

112

44

50

39

11

6

Sweden

32.0

2.7

140

48

50

41

9

2

United Kingdom

26.8

2.6

118

51

48

32

16

2

Iceland

21.7

6.0

108

33

32

26

6

35

Norway

23.9

2.8

156

56

44

30

15

0

Switzerland

29.2

2.1

146

22

60

28

32

18

: Data not available
* Average annual growth rate per capita at constant 1995 prices.
** 2004
*** Protected persons include for example employees, self-employed and pensioners.

1. Social protection expenditure and receipts are calculated in line with the methodology of the 1996 version of the ESSPROS (European System of Integrated Social Protection Statistics)
Manual. Expenditure includes social benefits, administration costs and other expenditure linked to social protection schemes. Social benefits are recorded without deduction of taxes or other
compulsory levies payable by recipients. «Tax benefits» (tax reductions granted to households as part of social protection) are generally excluded.

2. EU27 is not available before 2005.

3. Eurostat, Statistics in Focus, 46/2008 «Social Protection in the European Union», available free of charge in pdf format on the Eurostat web site.

4. The Purchasing Power Standard (PPS) is an artificial reference currency unit that eliminates price level differences between countries. Thus one PPS buys the same volume of goods and
services in all countries. This unit allows meaningful volume comparisons of economic indicators across countries.

5. Data for Luxembourg are not fully comparable since a significant proportion of benefits are paid to persons living outside the country (primarily expenditure on health care, pensions and
family benefits). Excluding these payments, expenditure would fall by approximately 15%.

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