Social protection in Malta is sixth lowest in the EU, and decreasing

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Noel Grima

For all the boasting about GDP growth and surpluses, social protection in Malta is one of the EU’s lowest, Eurostat has found.

Social protection in Malta in 2015 stood at 17.5% of GDP. In 2014 it was 18.3% and in 2010 it was 19.3%.

The average social protection in the EU is 29% and lower than Malta there are only Ireland (16.7%), Estonia (16.4%), Lithuania (15.6%), Latvia (14.9%) and Romania (14.6%).

Since 2010, social protection expenditure in the European Union has increased slightly, from 28.6% of GDP in 2010 to 29.0% in 2015.

In 2015, the two main sources of funding of social protection at EU level were social contributions, making up 54% of total receipts, and general government contributions from taxes at 43%.

The EU average continued to mask major disparities between Member States. In 2015, social protection expenditure represented at least 30% of GDP in France (34%), Denmark and Finland (both 32%), Belgium, the Netherlands, Austria and Italy (all 30%).

In contrast, social protection expenditure stood below 20% of GDP in Romania and Latvia (both 15%), Lithuania and Estonia (both 16%), Ireland (17%), Malta, Bulgaria and Slovakia (all 18%) as well as in the Czech Republic (19%).

These disparities reflect differences in living standards, but are also indicative of the diversity of Nasdaq +35.00 6,875.08 CAC 40 +24.26 5,411.08 national social protection systems and of the demographic, economic, social and institutional structures specific to each Member State, Eurostat said.

On average in the EU, old age & survivors’ benefits accounted for 45% of total social benefits in 2015 and made up the major part of social protection benefits in nearly all Member States.

The share of old age and survivors benefits in the total was Nikkei 225 -82.56 22,866.17 IBEX 35 -41.50 10,265.30 highest in Greece (65%), Italy and Portugal (both 58%), Romania and Cyprus (both 55%), while it was lowest in Ireland (33%), Luxembourg and Germany (both 39%), the United Kingdom (41%) and Belgium (42%).

Sickness/health care and disability benefits accounted for 37% of total social benefits on average in the EU in 2015.

Amongst Member States, the share of these benefits ranged FTSE 100 +22.57 7,475.83 from 26% in Cyprus and Greece to over 40% in Croatia (46%), Germany and the Netherlands (both 43%), the United Kingdom (41%) and Slovakia (40%).

Family and children benefits accounted for slightly less than 9% of total social benefits on average in the EU in 2015, unemployment benefits for 5% and housing and social exclusion benefits for 4%.

The share of family benefits in the total ranged from 4% in the Netherlands to almost 16% in Luxembourg.

Unemployment benefits varied between less than 1% in Romania and 12% in Ireland, and housing and social exclusion benefits from less than 1% in Greece, Estonia, Portugal and Italy to 8% in Cyprus and 7% in both Denmark and the United Kingdom.

With regards to Malta, 6.7% of total social benefits go to family and children, rather lower than the 8.6% spent by the EU average. Other countries spend more – UK with 9.6%, Luxembourg with 15.5% and even Hungary with 12%.

Spending on unemployment benefits takes up 3% of the total social benefits while the EU average is 4.8%. There are countries where unemployment benefits are lower percentage-wise than Malta – 0.7% in Romania, and 1.6% in Hungary, but in Belgium unemployment benefits take up no less than 10.7% of the total social benefits. The countries with the highest unemployment in the EU, Greece and Spain, spend 4.0% and 9.0% respectively.

While as regards sickness, healthcare and disability, Malta is very near to the EU average – 36.6% of the total spend as against the 37.3% of the EU average, Malta then spends more than the EU average on old age and survivors, 51.2% as against the 45.2% EU average.

Finally, as regards housing and social exclusion Malta spends less than the EU average – 2.5% as against 4.1%.