On social protection expenditure in Latvia in 2008

19.11.2009

According to ESSPROS methodology* expenditure for social protection in Latvia in 2008 constituted LVL 1.991 mln or 12.3% of gross domestic product (GDP), according to the data of Central Statistical Bureau. But in 2007, in turn, expenditure for social protection comprised LVL 1621 mln or 11.0% of the GDP.

Compiled information on expenditure for social protection in the European Union is available until the year 2007. In the Baltic States expenditure for social protection over the GDP are the lowest: in Latvia – 11.0 %, in Estonia – 12.5%, in Lithuania – 14.3 %. In European Union this indicator on average comprised ** 26.2 % of GDP.

Structure of social security income in 2008 was as follows:social contributions – 66.0 %, state and local government budget funding – 33.8 % and other income – 0.2 %.

Social protection expenditure in Latvia according to ESSPROS classification (mln LVL)

 

2006

2007

** 2008

Cost increase in 2008 over 2007, %

mln LVL

%

Costs for social security - total

1 371.5

1 621.3

1 990.8

100.0

+ 22.8

Of which by function:

     

Sickness/health care

386.8

468.3

561.4

28.2

+ 19.9

Disability

96.9

109.6

146.5

7.4

+ 33.7

Old age

613.3

707.8

875.7

44.0

+ 23.7

Survivors

28.9

32.0

38.9

1.9

+ 21.6

Family/children

134.8

172.9

220.7

11.1

+ 27.6

Unemployment

49.2

51.3

63.1

3.2

+ 23.0

Housing

10.9

18.5

27.6

1.4

+ 49.2

Social exclusion

13.8

16.6

18.2

0.9

+ 9.6

Administrative costs

26.5

30.7

37.9

1.9

+ 23.5

Other expenditure***

10.5

13.5

*** 0.7

0.0

- 94.8


Out of the total expenditure in 2008 benefits and allowances paid in cash comprised 70.0 %, but allowances and benefits paid in kind constituted 30.0 %.

Expenditure for social protection in Latvia in 2008 was dominating for persons at retirement age (ESSPROS function "old age'')– LVL 876 mln or 44.0 % of total expenditure for social protection. 93.5 % of this expenditure were for old-age pensions – LVL 819 mln. Additionally to old-age pension in the function ''old age'' expenditure includes also service pension, home care for elderly, as well as, other allowances and benefits.

Second largest expenditure group was formed by costs of health care (ESSPROS function ''sickness'') – LVL 561 mln or 28.2 % of total expenditure for social security.This expenditure includes state funding for outpatient and hospital health care, expenditure on sickness benefits, as well as local government benefits and allowances to cover the expenditure of the health care, etc.

Expenditure related to support of family and children in 2008 constituted LVL 221 mln or 11.1 % of total expenditure, thus forming the third largest expenditure group. This expenditure includes costs for state benefits for families and children, expenditure for social care institutions for children, local government allowances for families with children, as well as, other support. Compared to 2007 in this expenditure group there was noticeable growth of expenditure (27.6%). It may be explained with the fact that since 2008 parent allowance was granted, as well as expenditure on health care institutions for children and other allowances rose.

Expenditure related to disability was the fourth largest group of expenditure for social protection. In this expenditure group the second largest growth of expenditure was observed – 33.7%. And that, in turn, may be explained with the fact that there was expenditure on new state allowance (benefit for disabled person, who needs care), as well as with the increase of the expenditure on disability pension and other allowances and benefits.

ESSPROS function ''housing'' includes expenditure for social flats/social houses, as well as, local government housing benefits. In the ESSPROS section ''housing'' there was the highest growth of expenditure in 2008, if compared to 2007 - increase of 49.2%. It may be related with the increase of funding for the extraordinary allowance for the tenants of denationalised dwellings due to the moving out of the living space, as well as of the expenditure on benefits for local government flats.



*) Every year in European statistics system harmonized data on social protection expenditure is compiled and published accordingly to ESSPROSS (European system of integrated social protection statistics) methodology developed by Statistical Office of the European Communities (Eurostat). In Latvia data compilation on social security accordingly to ESSPROS was started in 2004. Data on social security expenditure can be found on home page of the CSB. Information provided by different state institutions is used for data compilation.
**) Provisional data
***) There was a reduction of the expenditure in the ESSPROS function ''other expenditure'' - 94.8%. It may be explained with the fact that in 2008 repayment of the disability, maternity and illness special purpose budget loan into the general budget was not made any more.




Prepared by Living Standard’s Statistics Section
Baiba Zukula
Tel. 67366847