Social Protection Expenditure reduces to 19.1% of GDP in 2016

Social Protection Expenditure reduced slightly in 2016, according to the the results of the Social Protection Survey, which is based on the principles and rules determined by the European System of Integrated Social PROtection Statistics (ESSPROS)

According to the survey published Wednesday by the statistical Service of Cyprus, social protection expenditure in Cyprus, as a percentage of the GDP, reached 19.1% in 2016, compared to 19.9% in 2015, which corresponds to Euros 3,530.3 million in 2016, compared to Euros 3,532.3 million in 2015.

The majority of the social protection benefits that were provided to beneficiaries in 2016 (85%), were non-means tested benefits. Specifically, this accounts for Euros 2,936.7 million in 2016. In most cases, the beneficiaries, having made cash contributions to various insurance funds (e.g. the Social Insurance Fund), gain the right to benefits, without their income being a criterion. In other words, the majority of social protection benefits are not explicitly or implicitly conditional on the beneficiary’s income and/or wealth falling below a specified level. Furthermore, the majority of the benefits in 2016 were cash benefits (Euros 2,769.5 million), whereas benefits in kind constituted only 19.9% of the total of social protection benefits (Euros 686.5 million). As regards cash benefits, 90.1% (Euros 2.494,5 million) were provided periodically, for example pensions and other benefits, whereas lump sum benefits constituted 9.9% of the cash benefits.

The most significant Social Protection Expenditure functions were those of old age and sickness/healthcare, which combined, constituted 67.3% of the social protection benefits for 2016 (compared to 67.4% in 2015). The largest share of old age benefits (which comprise both cash benefits, i.e. periodic pensions and benefits, and lump sum benefits, as well as old age benefits in kind like housing, provision of assistance in carrying out daily tasks and other benefits in kind), concerns periodic pensions which amounted to Euros 1,569.5 million and which constituted 93.2% of the total old age benefits. It is worth noting, that the Euros 1,524.1 million of the periodic pensions that were granted to beneficiaries in 2016, were non-means tested, i.e. without verification of the recipients’ financial situation.

There was an increase in the expenditure of the function of sickness/healthcare in 2016, which amounted to Euros 641.0 million (compared to Euros 606.5 million in 2015), the function of survivors with expenditure amounting to Euros 258.6 million in 2016 (compared to Euros 252.0 million in 2015), the function of family/children which amounted to Euros 244.3 million in 2016 (compared to Euros 241.0 million in 2015) and the function of disability with Euros 145.2 million in 2016 (compared to Euros 123.6 million in 2015). On the contrary, a decrease in expenditure was recorded in the function of old age, which amounted to Euros 1,683.7 million (compared to Euros 1,717.4 million in 2015) as well as in the function of unemployment which amounted to Euros 191.5 million (compared to Euros 215.9 million in 2015). Expenditure on the functions of housing and social exclusion for 2016, remained at about the same level as in 2015.

The Social Insurance Scheme is the largest provider of social benefits in Cyprus with benefits of Euros 1,423.0 million in 2016, representing a 40.3% share of the total benefits. The contribution of the scheme of Other Governmental Social Protection is also significant, with Euros 645.7 million which represents a share of 18.3% of the total benefits. Then follows the scheme of the Central Government Health Services with Euros 465.9 million and a 13.2% share, the Civil Service Social Protection with Euros 426.5 million and a 12.1% share and the semi-autonomous Social Insurance Institutions with Euros 224.3 million and a 6.4% share. Smaller rates were recorded in the remaining schemes.

Source: Cyprus News Agency