IS THE 500+ CHILD BENEFIT PROGRAMME OVERGENEROUS? POLISH SOCIAL PROTECTION EXPENDITURE ON BENEFITS AND SERVICES FOR FAMILIES WITH CHILDREN COMPARED WITH OTHER MEMBER COUNTRIES OF THE EU AND OECD
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The recent introduction of cash family benefit programme “500+” ignited debate on the desired levels of expenditure on family benefits and of overall social protection expenditure in Poland. The objective of the paper is to inform this debate through comparing levels of family benefit expenditure in Poland with the levels in other European Union and OECD countries. Analysis of the available data shows that Polish overall gross social protection expenditure – measured as its ratio to GDP – is significantly lower than the EU average and, after 2000, has been declining slightly (while EU average of this ratio has tended to increase). Expenditure on oldage, survivors’, and disability pensions is (as a percentage of GDP) not much lower than the EU average (although, after taking into account the impact of direct taxation, the difference between expenditure levels in Poland compared to other countries becomes much greater). At the same time, expenditure on health, unemployment, and family benefits has over the last 15 years been at significantly lower levels than levels prevailing in a majority of EU countries. Until 2015, family benefit expenditure in Poland was – as a percentage of GDP – significantly lower than the EU average. Expenditure on cash benefits in 2012 was 0.7%, which was a decline from 1% of GDP in 2000 and much less than the EU average of 1.6%. Since 2013, cash family benefit expenditure has been increasing faster than GDP, surpassing 0,8% of GDP in 2015. The introduction of 500+ more than doubled the expenditure to GDP ratio so that in 2016 it was 1.85% of GDP and one can estimate that in 2017, expenditure on all types of cash family benefits will surpass 2% of GDP. As expenditure on non-cash aspects of family benefits (benefits in kind like kindergartens and tax breaks for children) are not much lower in Poland than the EU average, programme 500+ raises overall social protection expenditure on family and children to about 3% of GDP which is slightly over the EU average but still lower than several higher spending countries in this area – UK, Scandinavian countries, France or Belgium for example. One has to bear in mind that imitations of data quality and availability and differences between countries both in terms of policy instruments used by social protection systems and differences of the extent to which various social benefits are affected by direct and indirect taxation, require caution when drawing conclusions from above comparison of expenditure levels.
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