Division 1.4.1 Social benefitsF1

Social benefits are defined as current transfers received by households during the income reference period and intended to relieve them of the financial burden of certain risks or needs, made through collectively organised schemes, or outside such schemes by government units and non-profit institutions serving households.

Social benefits include the value of any social contributions and income tax payable on the benefits by the beneficiary to social insurance schemes or to tax authorities.

To be classed as a social benefit, a transfer must meet one of two criteria:

• coverage is compulsory (under a law, regulation or collective bargaining agreement) for the group in question,

• it is based on the principle of social solidarity (i.e. if it is an insurance-based pension, the premium and entitlements are not proportional to the individual exposure to risk of the people protected).

Social benefits are broken down into:

1. (1)

   Family/children-related allowances (HY050G);

2. (2)

   Housing allowances (HY070G);

3. (3)

   Unemployment benefits (PY090G);

4. (4)

   Old-age benefits (PY100G);

5. (5)

   Survivors’ benefits (PY110G);

6. (6)

   Sickness benefits (PY120G);

7. (7)

   Disability benefits (PY130G);

8. (8)

   Education-related allowances (PY140G);

9. (9)

   Social exclusion allowances/benefits not classified elsewhere (HY060G).

Social benefits are classed as means-tested or non-means-tested benefits, and as contributory or non-contributory.

Contributory schemes are social protection schemes that require the payment of contributions, by the protected persons or by other parties on their behalf, in order to secure individual entitlement to benefits.

Non-contributory schemes are social protection schemes in which eligibility to benefits is not conditional on the payment of contributions by the protected persons or by other parties on their behalf.

Means-tested social benefits are social benefits which are explicitly or implicitly conditional on the beneficiary’s income or wealth, or both, falling below a specified level.

Non means-tested social benefits are social benefits which are not conditional on the beneficiary’s income or wealth, or both, falling below a specified level.

Social benefits do not include:

• benefits paid from schemes into which the recipient has made voluntary payments only, independently of his/her employer or government (which are included under ‘Pensions from individual private plans (other than those covered under ESSPROS)’ (PY080G)).