European system ofintegrated social protection
statistics — ESSPROSMANUAL AND USER GUIDELINESMSAT NA TUIAS LCST IACNADLGUIDELINES

2022 edition

European system of integratedsocial protection
statistics — ESSPROSMANUAL AND USER GUIDELINES 2022 edition

Manuscript completed in October 2022

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Theme: Population and social conditions
Collection: Manuals and guidelines

PDF: ISBN 978-92-76-58596-1 ISSN 2315-0815 doi: 10.2785/883901 KS-GQ-22-013-EN-N

Content

Content
Part 1: ESSPROS: General principles and core system ......................................... 5
1 Introduction to the ESSPROS System .......................................................................................... 6
2 The conventional definition of social protection ....................................................................... 10
2.1 Introduction ........................................................................................................................ 10
2.2 General definition .............................................................................................................. 10
2.3 Further explanation............................................................................................................ 11
3 Accounting structure and classifications in the core system .................................................. 16
3.1 Introduction ........................................................................................................................ 16
3.2 Delimitations of the Core System ...................................................................................... 16
3.3 The accounting structure ................................................................................................... 17
4 Definition and grouping of social protection schemes ............................................................. 19
4.1 The statistical unit .............................................................................................................. 19
4.2 Grouping of Social protection schemes ............................................................................. 20
5 Receipts of social protection schemes ....................................................................................... 27
5.1 Introduction ........................................................................................................................ 27
5.2 Types of receipts ............................................................................................................... 27
5.3 Classification of institutional sectors from which receipts originate ................................... 32
6 Expenditure of social protection schemes ................................................................................. 36
6.1 Introduction ........................................................................................................................ 36
6.2 Types of expenditure ......................................................................................................... 36
7 Social benefits, main classifications ........................................................................................... 39
7.1 Classification by function ................................................................................................... 39
7.2 Classification by type ......................................................................................................... 42
7.3. Means-testing ................................................................................................................... 44
8 Accounting conventions .............................................................................................................. 46
8.1 Introduction ........................................................................................................................ 46
8.2 The principles of exhaustiveness and consistency............................................................ 46
8.3 Valuation............................................................................................................................ 46
8.4 Time of recording and the accounting period .................................................................... 49
8.5 Netting and consolidation .................................................................................................. 49
8.6 Recognising the principal party ......................................................................................... 50
9 The rest of the world ..................................................................................................................... 51
9.1 Transactions with the rest of the world .............................................................................. 51
9.2 The definition of residence ................................................................................................ 51

Part 2: Classification of benefits in the core system ............................................ 54
1 Introduction ................................................................................................................................... 55
2 Social benefits in the Sickness/health care function ................................................................ 57
2.1 Introduction ........................................................................................................................ 57

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Content

2.2 Description of the types of benefit ..................................................................................... 59
2.3 Further guidance ............................................................................................................... 60
3 Social benefits in the Disability function .................................................................................... 61
3.1 Introduction ........................................................................................................................ 61
3.2 Description of the types of benefit ..................................................................................... 62
3.3 Further guidance ............................................................................................................... 63
4 Social benefits in the Old age function ....................................................................................... 65
4.1 Introduction ........................................................................................................................ 65
4.2 Description of the types of benefit ..................................................................................... 66
4.3 Further guidance ............................................................................................................... 68
5 Social benefits in the Survivors' function ................................................................................... 70
5.1 Introduction ........................................................................................................................ 70
5.2 Description of the types of benefit ..................................................................................... 71
5.3 Further guidance ............................................................................................................... 71
6 Social benefits in the Family/Children function ......................................................................... 72
6.1 Introduction ........................................................................................................................ 72
6.2 Description of the types of benefit ..................................................................................... 72
6.3 Further guidance ............................................................................................................... 73
7 Social benefits in the Unemployment function .......................................................................... 75
7.1 Introduction ........................................................................................................................ 75
7.2 Description of the types of benefit ..................................................................................... 76
7.3 Further guidance ............................................................................................................... 77
8 Social benefits in the Housing function ...................................................................................... 78
8.1 Introduction ........................................................................................................................ 78
8.2 Description of the types of benefit ..................................................................................... 78
8.3 Further guidance ............................................................................................................... 79
9 Social benefits in the function Social exclusion not elsewhere classified ............................. 80
9.1 Introduction ........................................................................................................................ 80
9.2 Description of the types of benefit ..................................................................................... 81
9.3 Further guidance ............................................................................................................... 81
Appendices ....................................................................................................................................... 83
APPENDIX I: The ESSPROS questionnaire detailed classification ....................................... 84
APPENDIX II: Qualitative information by scheme and detailed benefit ................................. 108
APPENDIX III: Methodology of the module on pension beneficiaries ................................... 113
APPENDIX IV: Methodology of the module on net social protection benefits (restricted
approach) .............................................................................................................................. 143
APPENDIX V: Differences between the ESSPROS and the national accounts (ESA 2010) 155
APPENDIX VI: The classification of various government disbursements ............................. 158
APPENDIX VII: The treatment of taxes and social contributions payable on benefits .......... 161

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Introduction

1

PART 1:ESSPROS: GENERAL PRINCIPLES AND
CORE SYSTEMESSPROS Manual and user guidelines — 2022 edition

5

Introduction to the ESSPROS system

11Introduction to the
ESSPROS System

1

EU Treaties identify the promotion of social protection and the development of the economic
and social cohesion of the Member States as tasks of the Union. In order to monitor the
progress of these tasks, the European Commission needs access to detailed and up-to-date
information on the organisation, current standing and developments of social protection in theMember States and beyond.

2

The European System of integrated Social PROtection Statistics (ESSPROS) was developedin the late ‘70s by Eurostat jointly with representative of the Member States of the European
Union in response to the need for a specific instrument of statistical observation of social
protection in the EC Member States.

3

The first ESSPROS methodology was published in 1981. In 1993, Eurostat undertook ageneral revision of the ESSPROS, in close co-operation with the Members States. TheESSPROS Manual 1996 was the outcome of this revision process.

4

In April 2005, Eurostat proposed to introduce a legal basis for the ESSPROS project. The
legal basis was proposed as a Regulation of the European Parliament and the Council (1)(frame Regulation) supplemented by Commission Regulations (2) implementing in particular:
ESSPROS core system (including qualitative information by schemes and detailed benefits),
the module on pension beneficiaries and the pilot data collection on Net social protection
benefits.

5

Simultaneously, an update of the ESSPROS Manual 1996 was undertaken because it wasnecessary to adjust its structure in order to incorporate some methodological clarifications.
The ESSPROS Manual published in 2008 did not contain significant changes in respect to1996 version, but mainly adjustments in the definitions and classifications. The first two partsof the Manual deal with the Core System. It consists of a stable, annually collected set of data

(1) Regulation (EC) No 458/2007 of the European Parliament and of the Council of 25 April 2007 on the European system of integratedsocial protection statistics (ESSPROS) published in OJ L113, 30.04.2007, p.3.
(2) Commission Regulation (EC) No 1322/2007 of 12 November 2007 implementing Regulation (EC) No 458/2007 of the European
Parliament and of the Council on the European system of integrated social protection statistics (ESSPROS) as regards the appropriate
formats for transmission, results to be transmitted and criteria for measuring quality for the ESSPROS core system and the module on
pension beneficiaries published in OJ L294, 13.11.2007, p.5.
Commission Regulation (EC) No 10/2008 of 8 January 2008 implementing Regulation (EC) No 458/2007 of the European Parliamentand of the Council on the European system of integrated social protection statistics (ESSPROS) as regards the definitions, detailed
classifications and updating of the rules for dissemination for the ESSPROS core system and the module on pension beneficiaries
published in OJ L5, 09.01.2008, p.3.

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Introduction to the ESSPROS system

1on the receipts and expenditures of social protection schemes in the European Union.
Supplementary sets of statistical information (modules), whose subjects were determined on
the basis of the needs expressed, were introduced by the EP and Council ESSPROSRegulation: the module on Pension beneficiaries and the module on net social benefits. At thetime of updating the manual, as the module on pension beneficiaries had already beenplanned, the methodology was added to the text. The second module, on net social benefits,
was to be developed

6

A pilot data collection on net social protection benefits was launched in year 2008, and an EU
synthesis report revealed positive results for a large majority of pilot studies. The report waspresented to the Task Force (TF) on net social benefits in November 2009. All TF members
agreed that the report provided the requisite backing for moving towards a full data collection.
In the 2010 Working Group (WG) on Social Protection Statistics a Gentlemen's agreement
was set up in order to collect data on the module for years 2007, 2008 and 2009 on a
voluntary basis according to the so-called restricted approach.

Two Commission Regulations implementing the full net data collection were approved in year
2011 (3). As the methodology on the module on the net social protection benefits (restricted
approach) was finalised at the same time, an update of the ESSPROS Manual wasundertaken in order to include this new methodology. On the other hand, a pilot study on the
net social benefits according to the so-called enlarged approach was launched at end of 2010.

The 2011 edition of the Manual is equivalent to the previous version but complemented by themethodology on the module on net social protection benefits (restricted approach) finalised
during the work on the pilot data collection.

The ESSPROS Manual is the reference document in the four Commission Regulations
implementing the EP and Council ESSPROS Regulation. It contains all detailed definitions
and classifications.

Concurrently, an extended Manual (or the "ESSPROS Manual and user guidelines") was
produced in 2012. Its nature is serving as a User's Guide for compiling and using ESSPROS.
The "ESSPROS Manual and user guidelines" contains in addition examples and further
explanations. These specific items will be updated if necessary.

The 2019 edition of the ESSPROS Manual and user guidelines was produced after
methodological amendments and clarifications to the Manual were agreed by the 2017
Working Group on Social Protection Statistics in regards to the following topics:Capital transfers(3) Commission Regulation (EU) No 263/2011 of 17 March 2011 implementing Regulation (EC) No 458/2007 of the European Parliamentand of the Council on the European system of integrated social protection statistics (ESSPROS) as regards the launch of full datacollection for the ESSPROS module on net social protection benefits published in OJ L71, p. 4
Commission Regulation (EU) No 110/2011 of 8 February 2011 implementing Regulation (EC) No 458/2007 of the European
Parliament and of the Council on the European system of integrated social protection statistics (ESSPROS) as regards the appropriate
formats for transmission, the results to be transmitted and the criteria for measuring quality for the ESSPROS module on net social
protection benefits published in OJ L34, p.29..

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Introduction to the ESSPROS system




7

1

Standard retirement age
Re-routed social contributions.

The objectives of ESSPROS are to provide a comprehensive and coherent description ofsocial protection in the Member States:covering social benefits and their financing;geared to international comparability;
harmonising with other statistics, particularly the national accounts, in its mainconcepts.

8

ESSPROS, the integrated system of social protection statistics, provides a coherent
comparison between European countries of social benefits to households and their financing.
Social benefits are transfers to households, in cash or in kind intended to relieve them fromthe financial burden of a number of risks or needs.

9

The risks or needs of social protection refer to the ESSPROSS functions that arecomprehensive, but do not include education unless it is a support to indigent families withchildren. The functions are disability, sickness/health care, old age, survivors, family/children,
unemployment, housing and social exclusion.

10

Social benefits are made through collectively organised schemes by government and/orcollective agreements. The schemes do not necessarily refer to institutions, although they arein many cases. These schemes can be defined solely for ESSPROS as a classification ofschemes exists, where schemes are grouped by criteria. All schemes that are solely based on
individual arrangements or where simultaneous reciprocal agreements exist are not regarded
as social protection.

11

The scheme concept of social protection is straightforward as it starts from the point of view ofthe beneficiaries and therefore differs from other concepts that concentrate on institutional
units spending or budgetary costs. The schemes are defined nationally according to the
ESSPROS framework.

12

There are links with National Accounts, although there is not a complete conceptual match
between the ESSPROS system and National Accounts. Particularly, the achievement of
ESSPROS is its accounting structure similar to the National Accounts (benefits and theirfinancing) at the level of the statistical unit of ESSPROS system (the scheme). There is also alink to the risks or needs to social benefits in the National Accounts.

13

Whereas the Core system corresponds to the standard information on social protection
receipts and expenditures, the modules contain supplementary statistical information on
particular aspects of social protection. Each module has its own methodology and is based ona particular Commission regulation. The introduction of any additional modules shall require
extensive preliminary consultations with the Eurostat Working Group on Social Protection
Statistics and shall require a specific EP and Council Regulation.

14

The subjects covered by the modules were determined on the basis of the needs expressedby the Commission and the Member States. Currently included in ESSPROS are modules thatcover:ESSPROS Manual and user guidelines — 2022 edition

8

Introduction to the ESSPROS system1

the number of pension beneficiaries;
net social protection benefits, i.e. the influence of fiscal systems on social protection
by the taxes and social contributions paid on benefits by beneficiaries and theextent to which social benefits are provided in the form of tax rebates or tax
reductions. At the moment this module is implemented via the restricted approach inorder to maintain the scope of the Core System.

SCHEMATIC REPRESENTATION OF THE FULL ESSPROSModule widening the scope of the core system
Net social benefits

CORE SYSTEM(quantitative+qualitative)

Links with National Accounts

Module with supplementary information
Number of pension beneficiaries

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The conventional definition of social protection

2

2

The conventional
definition of social
protection

2.1 Introduction
15

There is no universally accepted definition of the scope of social protection, nor does there
exist one that suits all purposes (including the compilation of statistics). It is therefore
necessary to formulate a conventional definition of the scope of social protection which meets
as well as possible the needs of social policy analysis and data collection on an international
level. This chapter begins with a general definition, relevant to both the Core system of the
ESSPROS and its modules, that is further explained and specified for use in the Core systemin the following paragraphs.

2.2 General definition
16

Social protection encompasses all interventions from public or private bodies intended torelieve households and individuals of the burden of a defined set of risks or needs, provided
that there is neither a simultaneous reciprocal nor an individual arrangement involved.
The list of risks or needs that may give rise to social protection is, by convention, as
follows (4):
1. Sickness/Health care
2. Disability
3. Old age
4. Survivors
5. Family/children
6. Unemployment
7. Housing
8. Social exclusion not elsewhere classified.

(4) There are a number of differences between the ESSPROS and the national accounts in the list of risks or needs giving rise to social
benefits. The most important one is that the national accounts include the need "Education". See Appendix I.

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The conventional definition of social protection

2

2.3 Further explanation
2.3.1 TYPES OF INTERVENTION
17

The word intervention in the definition should be understood in its broadest sense to cover thefinancing of benefits and related administration costs, as well as the actual provision of
benefits.

18

Benefits granted within the framework of social protection can take many forms; however, in
the Core system, they are limited to:(i) cash payments to protected people(ii) reimbursements of expenditure made by protected people(iii) goods and services directly provided to protected people.

2.3.2 PROVISION BY PUBLIC AND PRIVATE BODIES19

The condition that the intervention must come from public or private bodies excludes from thedefinition of social protection all direct transfers of resources between private households orindividuals in the form of gifts, help to relatives and so on, even if their purpose is to protect therecipient from the risks or needs listed in paragraph 16.
For practical reasons, small-scale, informal and incidental types of support such as whiprounds, Christmas collections, ad-hoc humanitarian aid and emergency relief in the event of
natural disasters, which do not require regular management and accounting, are also excluded
from the definition.

19A Generally, the bodies most frequently intervening are:

social security funds;
central, state and local government agencies;
autonomous and self-administered pension funds;
insurance companies: in Denmark the pension funds running labour market
pensions can delegate the administration of these pensions to insurancecompanies; mutual benefit societies;
 public or private employers providing benefits to their current and former employees
directly;
 private welfare and assistance institutions: for instance, the Red Cross, thePortuguese religious foundation Casa Misericordia and the (Roman Catholic)charitable organization Caritas.

2.3.3 THE RISKS OR NEEDS20

The list of risks or needs given in paragraph 16 has two purposes. On the one hand it restricts
the scope of social protection to the areas which are felt to be most relevant in the European
context. On the other hand, it is a tool for producing comparable statistics where theinstitutions, regulations and social traditions of the Member States diverge widely. The various
risks and needs define the primary purposes for which resources and benefits are provided,
irrespective of legislative or institutional structures behind them. In this context, it is customary
to use the term functions of social protection.

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The conventional definition of social protection

212Functions are defined in terms of their end-purpose, not in terms of given branches of social
protection or pieces of legislation. For instance, the benefits granted by a pension fund cannot
simply be classified in their entirety under the Old age function, as some benefits may havethe purpose to relieve the beneficiary from needs related to the death of a breadwinner (which
belong to the Survivors function) or to the loss of the physical ability to engage in economic
and social activities (which are to be classified under the Disability function).
The ESSPROS applies the functional breakdown exclusively to social protection benefits, andnot to receipts. It is recognised, in fact, that a single type of receipts can be used to financebenefits under several different functions.

22

Paragraph 110 briefly describes the functions distinguished in the ESSPROS. Part 2 of theManual contains a detailed specification of the types of benefits covered by each function andgives further guidance to their interpretation.

2.3.4 ABSENCE OF A SIMULTANEOUS RECIPROCAL ARRANGEMENT23

The conventional definition of social protection stipulates that the intervention does not involvea simultaneous reciprocal arrangement. This should be conceived as excluding from the scopeof social protection any intervention where the recipient is obliged to provide simultaneously
something of equivalent value in exchange. For instance, interest-bearing loans granted tohouseholds are not social protection because the borrower commits himself to paying interestand to refund the capital sum (5). Likewise, the portion of the full cost of health care and otherprovisions that beneficiaries are required to meet personally falls outside the field of social
protection.
This does not preclude that social protection benefits may be conditional on some action to beundertaken by the beneficiary (such as taking part in a vocational training programme),
provided that this action does not have the character of salaried work or sale of services.

24

The principle that the intervention should not involve a simultaneous reciprocal arrangement isparticularly important for distinguishing social protection provided directly by employers to
employees from the flows which make up gross wages and salaries.

24A Any expenditure by employers for the employees' benefit that can reasonably be regarded ascompensation for work is not considered a social benefit. Examples are:








25

cost of living allowances, local allowances and expatriation allowances;
allowances for transport to and from work;
payments made by employers to their employees under saving schemes;
free housing or housing allowances to active employees;crèches for the children of employees;
holiday pay for official and annual holidays;
sports, recreation and holiday facilities for employees and their families.

However, where the reciprocal arrangement from the employee is not simultaneous, theexpenditure is classified as social protection. For example, retirement and survivors' pensions
paid by an employer, free housing to retired employees and so on are social benefits (even if
the right to the benefit arises from the previous period of service with the employer, that is,work during active life being the reciprocal arrangement). Following the same reasoning, thecontinued payment of wages and salaries while an employee is unable to work during(5) Still, if the loan is interest-free or granted at an interest rate well below the current market rate for social protection reasons, theamount of interest waived qualifies as a social benefit.

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The conventional definition of social protection

2

sickness, maternity, disability, redundancy and so on is classified as social protection provided
by the employer.
26

Furthermore, in line with national accounts’ definitions, social protection does not include
expenditure by employers which is to their own benefit as well as to that of their employees
because it is necessary for the employers' production process.

26A Examples are allowances for or reimbursement of travelling expenses incurred by theemployees in the course of their duties, medical examinations required by the nature of thework and accommodation provided at the workplace that cannot be used by the employees'
households, such as cabins and dormitories.
27

In practice, therefore, social protection provided directly by employers to their employees islimited to:(i)the continued payment of normal, or reduced, wages and salaries during periods ofabsence from work as a result of sickness, accident, maternity etc.;(ii)

the payment of statutory special allowances for dependent children and other family
members;(iii)

health care which is not related to the nature of the work.

2.3.5 THE EXCLUSION OF INDIVIDUAL ARRANGEMENTS
28

Social protection excludes all insurance policies taken out on the private initiative of individuals
or households solely in their own interest. For instance, the payment of a capital sum or anannuity to the holder of a private life insurance policy is not considered to be social protection.

29

This rule should not be interpreted as meaning that all individual policies are excluded fromsocial protection. When social protection is provided by the employer in the form of insurance,
it is sometimes allowed, or even required, that the policies be taken out in the names of theindividual participants.

30

Nor does this rule imply that all collective contracts must be classified as social protection.
Insurance policies that are taken out collectively with the sole purpose of obtaining a discount,
as for example, a joint sickness policy covering a group of people travelling together, are notclassified as social protection.

31

An insurance policy is included in the scope of the ESSPROS if it is based on social solidarity,
whether or not it is taken out on the initiative of the person insured. An insurance policy isbased on the principle of social solidarity if, as a matter of policy, the contributions charged are
not proportional to the individual exposure to risk of the people protected (6).

31A Types of insurance that are often based on the principle of social solidarity are:

schemes which are established specifically for persons belonging to the same profession ortrade;



insurance offered by mutual benefit societies;

government-based voluntary schemes open to certain categories of households, such as small
businessmen or other low income groups. This is sometimes referred to as opting in.

(6) This definition pertains exclusively to insurance schemes. The principle of social solidarity is also applied elsewhere and is, forinstance, a feature of all non-contributory schemes.

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The conventional definition of social protection

32

2

It is noted that social solidarity is a sufficient, but not necessary, condition for an insurance
scheme to be classified as a scheme of social protection. Specifically,(i) where by law or by regulation certain groups of the population are obliged to participate in adesignated insurance scheme, or;(ii) where employees and their dependents are insured as a consequence of collective wage
agreements, the insurance is included in the scope of the ESSPROS even if it is not basedon the principle of social solidarity.

32A Difficult borderline cases arise from the so-called contracting out, where the law allows people
to leave the general scheme managed by the social security fund and acquire protection
through other channels. The simple fact that coverage is compulsory by law (although noparticular scheme is specified) or that an insurance policy replaces a government scheme, is
not sufficient reason to classify it as social protection. In these instances, the criterion of social
solidarity can be a useful guide.
If the alternative chosen is a company scheme, a professional scheme, a scheme establishedby a trade union or another kind of mutual benefit scheme, cover is presumed to be based on
the principle of social solidarity. These cases, therefore, fall within the scope of the ESSPROS.
When a person contracting out of a social security fund or a company scheme takes out anindividual policy with a commercial insurance company the case should be examined
individually, as the principle of social solidarity may still apply. The Appropriate Personal
Pension Schemes in the United Kingdom are an example.

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The conventional definition of social protection

2

OVERVIEW OF THE CORE SYSTEMSCHEMESGrouped by characteristics:• government-controlled versus not governmentcontrolled• compulsory versus non-compulsory• contributory versus general versus special• basic versus supplementary

EXPENDITURE

RECEIPTS
By economic type:

By economic type:• social contributions• general government contributions• transfers from other schemes• other receipts

By sector of origin:• Corporations• General government• Households• Non-profit institutions• Rest of the world• social benefits• administration costs• transfers to other schemes• other expenditure

By function:• Sickness/Health care
• Disability• Old age
• Survivors• Family/Children• Unemployment• Housing• Social exclusion
n.e.c.

ESSPROS Manual and user guidelines — 2022 edition

By type:• Cash benefits:•Periodic•Lump sum• Benefits in kind
By characteristic:• Means-tested• Non meanstested

15

Accounting structure and classification in the core system33

Accounting structure andclassifications in the coresystem

3.1 Introduction
33
This chapter provides an overview of the Core system of the ESSPROS. It introduces a
number of concepts and classifications which will be discussed further in the following chapters, andin Part 2 of the Manual.

3.2 Delimitations of the Core System
34
There are three essential differences between the Core system and the full ESSPROS.
Firstly, as stated in paragraph 18, the Core system deals only with social protection given in the formof cash payments, reimbursements and directly provided goods and services to households andindividuals. Secondly, the statistical description is confined to receipts and expenditures of social
protection schemes. Finally, the Core takes only distributive transactions into account.

35
The social protection scheme is a unit specially defined for the ESSPROS, and must be
clearly distinguished from legal entities or other types of statistical units in common use. Chapter 4
will define a scheme as a distinct body of rules, supported by one or more institutional units,
governing the provision of social benefits and their financing. The scheme should be as specific as
possible as to the risk or need for which protection is provided and the categories of people
protected, without being so small that it becomes impossible to draw up an account of receipts andexpenditures.

The schemes are characterised according to the following five criteria:(i)Which unit takes the main decisions?

(ii)

Is membership of the scheme enforced by government?

(iii)

Are entitlements to benefits conditional on the payment of contributions?

(iv)

Is the scheme protecting the full population or only particular sections of it?

(v)

What is the level of protection provided by the scheme?

All relevant definitions are contained in chapter 4.

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Accounting structure and classification in the core system

36

3

The Core system records receipts and expenditures of social protection schemes, but
only in the form of:(i)distributive transactions, whether current or capital;(ii)

administration costs charged to the scheme.

Any receipts or expenditures relating to production activities (for instance, the productionof administration services or of goods and services for direct provision to beneficiaries)
are excluded. Likewise, no financial transactions by the scheme (such as the issue of aloan or bonds) are recorded.
36A Capital transfers require the acquisition or disposal of an asset, or assets, by at least oneof the parties to the transaction. Whether made in cash or in kind, they result in acommensurate change in the financial, or non-financial, assets shown in the balance
sheets of one or both parties to the transaction.
Capital transfers is a concept used in national accounts, which can be sub-divided into
three sub-categories:

Capital taxes refer to exceptional taxes on assets owned or transferred. An example
that is potentially relevant to ESSPROS could be a one-off tax on property assets
owned and put at the disposal of a scheme by the institutional unit supporting it —e.g. a tax on the increase in value of land or property affected by changes in land
use or planning regulations.



Investment grants refer to transfers to finance the acquisition of fixed assets (buildings,
transport equipment, machinery, etc.). For example, money transferred to a social
housing organisation to facilitate purchase of additional accommodation is a capitaltransfer in cash.

Other capital transfers refer to redistribution of savings or wealth. Examples include
transfers to cover accumulated or exceptional losses and transfers made tocompensate for the impact of a natural disaster.

ESSPROS includes transactions that fulfil the definition of a capital transfer (and fall within
any of the sub-categories identified above) where these also meet the definitions of thetypes of expenditure and receipts of social protection schemes laid out in this manual.
It is important to note that, in general, ownership of assets is associated with theinstitutional units running a social protection scheme rather than the scheme in its own
right. ESSPROS only covers capital transfers that relates to assets put at the disposal of
the scheme by the institutional units running them — i.e. those granted specifically for the
purpose to finance or provide social protection.

3.3 The accounting structure
37

There are various ways of presenting the main categories of receipts and expenditures ofsocial protection schemes. The most straightforward method is by listing them one under
the other, beginning with receipts, as in Table A below.

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Accounting structure and classification in the core system

3

Table A: Transaction categories of social protection schemes in the Core system
Receipts
12
34Social contributions
General government contributions
Transfers from other schemes
Other receipts

Expenditure
12
3
4

Social benefits
Administration costs
Transfers to other schemes
Other expenditure38

The description of receipts and expenditures of social protection schemes is the subjectof chapters 5 and 6 respectively.

39

Social benefits are a main focus of the ESSPROS. They are broken down by function(see paragraphs 20 to 22) and by type (the form in which the protection is given). The
classification of social benefits by type contains two levels: an aggregate level whichallows cross-functional analysis (e.g., benefits in cash and in kind, see section 7.2) and adetailed level which defines categories usually only relevant to one function (i.e., old age
pensions, unemployment benefits). Part 2 of the Manual contains a detailed description of
the various benefit categories.

40

The ESSPROS contains extensive classifications of both schemes and transactions ofschemes, covering the many ways in which social protection is organised within theEuropean Union.

40A It is noted that certain categories may not be relevant to some Member States. For
example, while some government-controlled schemes are controlled by both central andlocal government units in Spain or Italy, they are all dominated by central government in
Denmark. Similarly, taxes earmarked for social protection are found in Belgium, Greece,
France, Luxembourg, Portugal and United Kingdom but, for time being, are non-existentin many other countries.

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4

Definition and grouping ofsocial protection schemes

4.1 The statistical unit
41

The Core system presents data on benefits provided, and their financing, as expenditures andreceipts of the units that are responsible for providing social protection.
This method has a number of advantages. Firstly, the statistical information can be structured
in a single accounting framework covering both the provision of social protection and its
financing. Secondly, the data can easily be grouped according to the main characteristics ofthe providing units, making it easier to compare and analyse the ways in which the Member
States organise their systems of social protection. Thirdly, the method allows to exploit in a
coherent way the administrative files of the Member States, which are reliable and low-costsources of statistical data (7).

42

The statistical unit in the ESSPROS is called social protection scheme. It is defined as follows:
A social protection scheme is a distinct body of rules, supported by one or more institutional
units, governing the provision of social protection benefits and their financing.
This definition calls for further clarification:

43

(i)

Social protection schemes should at all times meet the condition that it must be
possible to draw up a separate account of receipts and expenditures.

(ii)

Preferably, social protection schemes are chosen in such a way that they provide
protection against a single risk or need and cover a single specific group of
beneficiaries.

Social protection schemes are concerned exclusively with redistribution and not withproduction. They are supported by institutional units and are not themselves institutional units.
Some institutional units support social protection schemes as their main activity; for example,
social security funds, pension funds, welfare funds or mutual benefit societies. Others run
social protection schemes only as a subsidiary activity; for example, employers, insurancecompanies or trade unions.

(7) A full understanding of social protection, however, requires information that cannot be exclusively obtained from the administrative
files of the providing units. For example, when no administrative data are available on benefits provided by employers in the form ofcontinued payment of wages in case of sickness, information can be gathered from labour cost surveys.

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Goods and services provided in kind to beneficiaries are considered to be produced by theinstitutional unit (or units) which support the scheme in question, or else to be purchased fromother institutional units.
Institutional units can support more than one social protection scheme, when they administerand provide very diverse types of social benefits. On the other hand, a single social protection
scheme can be supported by several institutional units, where each is responsible for, say, aspecific geographic region, group of enterprises or category of workers.
44

The body of rules referred to in this definition may be established de jure, by virtue of laws,
regulations or contracts, or de facto, by virtue of administrative practice. De facto schemes
are, for example, set up by employers to provide their employees with extra-legal benefits,often topping up benefits provided by existing basic schemes.

45

A separate account of receipts and expenditures means the availability of a full and itemised
set of records on resources and uses during the accounting period. Such account of receipts
and expenditures may be derived directly from administrative sources or else be constructedby means of estimation.
It should be noted that the resources of some schemes include imputed receipts. This isparticularly the case with government social assistance schemes (which are financed implicitly
through imputed government contributions) and non-autonomous schemes run by employers(which draw on imputed employers' contributions).

46

The conventionally agreed list of risks or needs - the social protection functions - is given inparagraph 16 above.
The wish to define schemes in such a way that they provide protection against a single risk orneed for a single specific group of beneficiaries could produce a multitude of units. The
tendency to fragmentation, however, is kept within boundaries by the need to be able tocompile information on both receipts and expenditures for each scheme. In practice, therefore,
many schemes provide benefits which come under several functions.

47

In several Member States, a specialised agency is set up for the financing of public social
protection and the distribution of resources among the institutional units which are responsible
for the granting of benefits. In such cases, a fundamental choice has to be made whether to:(i)

combine the financing and provision of benefits in a single social protection scheme,
or:

(ii)

distinguish several schemes of social protection, among which one that finances theothers through transfers between schemes.

It is recommended to choose the second option, as this provides more opportunities foranalysing the structure of social protection.

4.2 Grouping of Social protection schemes
4.2.1 NO SINGLE CLASSIFICATION
48

The ESSPROS does not contain a single classification of schemes, but instead defines anumber of characteristics which can be freely combined to produce different groupings ofschemes as required by analysis.

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For instance, schemes managed by social security funds are usually both government controlled (ref. 11) and contributory (ref. 31). The categories are defined on the basis of (i) thetype of unit which takes the essential decisions, (ii) the existence or absence of a legal
obligation, (iii) the way entitlements are established, (iv) the scope of the scheme, (v) the levelof protection provided. For each of these criteria, the schemes are allocated to the groupwhich agrees with their predominant character. This implies that each scheme is classified into
one single category per criterion.

Table B: Overview of categories of social protection schemes
Criterion

Categories of schemes

1. Decision-making

11 Government-controlled schemes
111
Central government schemes and social
security funds
112State and local government schemes
12 Not Government-controlled schemes
121
Schemes for employees
1211
Contractual1212
Non-contractual
122
Other
not
Government-controlled

schemes
2. Legal enforcement

21 Compulsory schemes
22 Non-compulsory schemes
221
Schemes available by law
222
Other non-compulsory schemes

3. Establishment of entitlements 31 Contributory schemes
32 Non-contributory schemes
4. Scope

41 Universal schemes
42 General schemes
43 Special schemes
431
Schemes for public servants
432
Schemes for the self-employed
433
Other occupational schemes
434
Other schemes

5. Level of protection

51 Basic schemes
52 Supplementary schemes

4.2.2 DECISION-MAKING
49

Decision making refers to the unit that takes the most important decisions: the level ofbenefits, the terms on which they are paid and the ways in which the scheme is financed.
Schemes may be government-controlled or not government-controlled.

50

Government-controlled schemes (ref. 11) consist of social protection schemes which arecontrolled by government.

The definition of general government is given in paragraph 92. Controlled implies that the

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government takes all the principal decisions about the level of benefits, the terms on which
they are paid and the ways in which the scheme is financed. It is not sufficient to classify ascheme as government-controlled simply because the government has a formal (butunexercised) right to determine the policy of a given scheme or the scheme's managers havean obligation to submit certain decisions for broad approval to the public authorities.

Government-controlled social protection is usually established by law or regulation. It includes
all schemes that provide protection to public servants on the same lines as that provided to thegeneral population by government-controlled schemes, but excludes schemes thatgovernment may set up in its role of employer and which have no government-controlledcounterparts in the private sector. These schemes are classified as not government-controlled
schemes for employees.

50A Examples of government-controlled schemes are:




51

52

non-contributory schemes set up by government to meet its general social
responsibility, such as an income support scheme for destitute people or a rent benefit
scheme;schemes run by social security funds;
schemes originally established in the private sector and for which the government haslater assumed responsibility.

Government-controlled social protection may be further subdivided by level of government
into:
(i)

Central government schemes and social security funds (ref. 111),(ii)

State or local government schemes (ref. 112).

Not government-controlled schemes (ref. 12) are all social protection schemes which are notcontrolled by government in its role of public authority.

52A The following types of schemes are usually not government-controlled: schemes run by non-profit institutions (mutual benefit societies, friendly societies,
institutions co-administered by the social partners and so on); schemes administered by commercial insurance companies;
 non-autonomous schemes run by employers maintaining separate reserves in theirbalance sheets to cover their liability to pay benefits in the future (book reserves).
Included here are funded schemes which government may have set up in its role ofemployer (see paragraph 50 above, 3rd sentence); non-autonomous schemes run by employers without maintaining segregated funds,
including unfunded schemes which government may have set up in its role of employer.
In the national accounts, the first three types of schemes are referred to as private funded
schemes; the latter is called unfunded employers' schemes. The last two types taken together
make up the category non-autonomous employers' schemes.
53

The ESSPROS sub-classifies not government-controlled schemes into not governmentcontrolled schemes for employees and other not government-controlled schemes.
Not government-controlled schemes for employees (ref. 121) are social protection schemesorganised (but not necessarily run) by employers for their employees, former employees andtheir dependants. Two groups are distinguished:(i)Contractual not government-controlled schemes for employees (ref. 1211) provide
social protection decided via bargaining between the social partners (employers and

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employees). The terms of such schemes are fixed by collective agreement and cannot
be unilaterally changed by employers;(ii)

Non-contractual not government-controlled schemes for employees (ref. 1212)
provide social protection to employees at the discretion of the employer.

Other not government-controlled schemes (ref. 122) are all not government-controlled
schemes other than those organised by employers for their employees, former employees
and their dependants. They may be organised, for instance, for the general public or specificgroups such as the self-employed.

4.2.3 LEGAL ENFORCEMENT
54

Legal enforcement refers to the rules laid down by legislation concerning the membership of
the protected people. Membership of a social protection scheme may be compulsory or
non-compulsory.
In the framework of the ESSPROS the concepts compulsory and voluntary are interpreted
from the point of view of the people protected.

55

Compulsory schemes (ref. 21) are social protection schemes where membership is madecompulsory by the government.

55A Compulsory schemes may include both schemes established by law or regulation and thoseestablished by convention or collective agreement between employers and employees ormembers of the same profession and subsequently made obligatory by the government.
56

non-compulsory schemes (ref. 22) are all social protection schemes where membership is notmade compulsory by government.
Two subgroups of non-compulsory schemes are distinguished separately:(i) Schemes available by law (ref. 221) consists of schemes established by law or
regulation and available for voluntary membership to specific groups such as lowincome self-employed workers, or people who choose to remain protected after aperiod of compulsory cover comes to an end);(ii) The other subgroup consists in the other non–compulsory schemes (ref. 222).

4.2.4 ESTABLISHMENT OF ENTITLEMENTS
57

Establishment of entitlements refers to the basis on which the protected person is eligible forbenefits: conditional or not conditional on payment of contributions.

58

Contributory schemes (ref. 31) are social protection schemes that require the payment ofcontributions, by the protected persons or by other parties on their behalf, in order to secureindividual entitlement to benefits.

58A Contributory schemes are sometimes referred to as social insurance schemes.
By convention, all non-autonomous schemes that employers run in favour of their employees,
former employees and their dependants are classified as contributory schemes.
59

Non-contributory schemes (ref. 32) 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.

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59A Many non-contributory schemes give benefits only after a means-test. Non-contributory
schemes which do not require a means-test include national health services and family
allowance schemes instituted in several Member States.

4.2.5 SCOPE OF THE SCHEME
60

Scope of the scheme refers to the part of the population which is protected (the whole
population, all or the majority of workers or specific sections of the population).

61

Universal schemes (ref. 41) are schemes which apply to the whole population, implying that all
residents or nationals, irrespective of their socio-professional status, are eligible to receive
social benefits upon materialisation of specific risks or needs.

61A Examples of universal schemes are: the national health services of Denmark, Italy, Spain,
Cyprus, the United Kingdom and health insurance in Slovakia and Poland; the universal
pension schemes in Denmark (Folkepension) and the Netherlands (Algemene Ouderdoms
Wet), the state pension scheme in Latvia and the tax financed pension scheme in Sweden(guarantee pension - a part of the general pension system); the child allowance schemes
supported by the government: "CNAF" in France, some child and family allowance schemes in
Latvia, family support in Hungary, housing subsidies in Malta, "Kinderbetreuungsgeld" inAustria (since 2002), the Parental insurance scheme in Sweden and social welfare in
Slovenia.
62

General schemes (ref. 42) are those which apply to the totality or the preponderance of theeconomically active population.

62A Typical examples are the Irish general old age pension scheme, the general invalidity scheme
for private sector employees in Italy, the National Health Insurance scheme and the schemes
Income pension fund and Premium pension fund (parts of the general pension system) in
Sweden, the Employment fund in Lithuania, Old-age pension scheme in Slovakia, the healthinsurance in the Czech Republic and the insurance scheme against occupational diseases
and accidents at work in Latvia.
63

Special schemes (ref. 43) are schemes designed to protect a specific, restricted section of the
population.

63A Some special schemes are directed, for instance, at certain categories of workers, such as
railway employees, farmers or clergymen. Schemes which cater for specific groups defined byother criteria include, for example, schemes for war victims or immigrants.
Schemes which protect particular sections of the population occur in all Member States, where
they vary widely in institutional and financial structure.
64

The ESSPROS defines four separate sub-groups of special schemes.
Schemes for public servants (ref. 431) are those reserved for established and acting public
servants, other members of general government staff and officials of public corporations
insofar as they have official status under public law.
Schemes for the self-employed (ref. 432) are schemes set up to provide protection for the selfemployed and their dependants.
Other occupational schemes (ref. 433) are schemes created for certain categories of workers
on the basis of occupation or profession, other than special schemes for public servants andthe self-employed.
Other schemes (ref. 434) groups all remaining special schemes.

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4.2.6 LEVEL OF PROTECTION
65

Level of protection refers to whether social protection schemes offer a basic or a
supplementary level of protection.
Various criteria are used for classifying, including some of the distinctions defined earlier inthis chapter, so that interpretations may vary slightly from country to country. The following
paragraphs explain the concepts in current use rather than try to provide standard definitions
for international comparison.

66

Basic schemes (ref. 51) are social protection schemes that guarantee a basic level ofprotection.
A basic level of protection means the lower level of protection (based on the number of yearsof contributions/work and/or residency), without it being strictly understood as the level ofresources allowing only the minimum socially acceptable standard of living. Basic old age
schemes, for instance, typically guarantee either a flat-rate pension and/or a limited
percentage of former earnings which may or may not be, supplemented by other provisions. In
respect of medical care, basic schemes can either take charge of the lowest class of healthcare or compensate for only a specific fraction of its cost.

66A Basic schemes are often those on which the greatest number of people rely on for protection.
As a rule, universal schemes and schemes protecting all workers or employees are basic. In
some cases, a person may be entitled to benefits from more than one single basic scheme.
For instance, if an employee has worked in the private sector for a number of years before
becoming a public servant, he or she may eventually be entitled to old age pensions from two
different basic schemes.
66B Many basic schemes are characterised by a high degree of social solidarity (see paragraph 31
above). In certain countries this has resulted in a system of transfers in which schemes with afavourable ratio of contributors to beneficiaries support schemes in which this ratio is lessfavourable.
66C Finally, the government has a major influence on basic schemes, as these are usually either
government-controlled schemes or compulsory not government-controlled schemes.

67

Supplementary schemes (ref. 52) are social protection schemes that:

top up cash benefits granted by the basic scheme, or;

extend the coverage of the basic scheme, or;

replace the basic scheme where conditions for entitlement to the basic scheme are notfulfilled.

67A Examples are schemes that provide a percentage of former income on top of the basic
pension and sickness insurance schemes that take charge of the cost of medical care notcovered by the basic scheme.
67B Schemes for specific groups of the working population, such as occupational or professional
schemes, are normally supplementary. However, where the law allows an occupational or
professional scheme to replace the universal scheme (for instance, in some public service
schemes, or generally in the case of contracting out), it is treated a basic scheme.
67C Although many supplementary schemes are non-compulsory, the fact that membership tosome schemes (for example contractual schemes for employees) is made obligatory by apublic authority does not prevent their classification as supplementary. Examples are the old
age schemes AGIRC and ARRCO in France.

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67D For studying pension schemes, the pillars' classification is often used, but not universally. This
classification distinguishes tree pillars: first pillar schemes are collective compulsory schemes,
second pillar schemes are collective voluntary schemes, and third pillar schemes areindividual voluntary schemes. Basic and supplementary schemes are sometimes referred toas first pillar and second pillar schemes, but this classification is not always accurate anddepends on a national approach. Third pillar consists of individual arrangements that are notpart of social protection in the definition of the ESSPROS.

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Receipts of social protection schemes

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5

Receipts of social
protection schemes

5.1 Introduction
68

The ESSPROS Core system classifies receipts of social protection schemes by type andorigin. The type indicates the nature of, or reason for, a payment; the origin specifies theinstitutional sector from which the payment is received.

69

When a single type of receipts finances benefits in different functions, it is difficult to tell whatfraction of the receipts pays for which benefit and, therefore, for which function. This is themain reason why social protection schemes cannot always meet the requirement to provide
protection against a single risk or need (see paragraph 46 above).

5.2 Types of receipts
Table C: Classification of receipts of social protection schemes by type1

Social contributions
11
Employers' social contributions
111
Actual employers' social contributions
112
Imputed employers' social contributions
12
Social contributions by the protected persons
121
Employees
122
Self-employed persons
123
Pensioners and other

2

General government contributions
21
Earmarked taxes
22
General revenue

3

Transfers from other schemes
31
Social contributions re-routed from other schemes
32
Other transfers from other schemes

4

Other receipts
41
Property income
42
Other

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70

5Social contributions (ref. 1) means the costs incurred by employers on behalf of theiremployees or by protected persons to secure entitlement to social benefits.

70A See also the convention included in paragraph 79 B regarding social contributions received bycompulsory universal social protection schemes.
70B It is noted that the fact that social contributions have been paid by or for a particular person
may not be the sole condition to make that person eligible to social benefits when the social
risk or need materialises. Other conditions may include a minimum period of affiliation, aminimum loss of earning capacity, availability to actively search for work or follow vocational
training, etc.
71

Employers' social contributions (ref. 11) are the costs incurred by employers to secure
entitlement to social benefits for their employees, former employees and their dependants.

71A Employers' social contributions are an indirect component of compensation of employees (thedirect component being wages and salaries). Generally they are related to employees'
earnings, but are sometimes assessed by reference to other criteria. Employers' social
contributions may be actual or imputed; they can be paid by resident or non-resident
employers.
72

Employers' actual social contributions (ref. 111) are payments made by employers to insurers
to secure entitlement to social benefits for their employees, former employees and theirdependants.
The term insurers includes:(i)social security funds;(ii)
non-profit institutions running contributory schemes (such as autonomous pension
funds);(iii) commercial insurance companies;(iv) employers running non-autonomous schemes and maintaining segregated reserves intheir balance sheets for that purpose.

73

Employers' imputed social contributions (ref. 112) are the costs incurred by employers by
granting social benefits or by promising social benefits payable in future, to their employees,
former employees and their dependants, (i) without involving an autonomous insurer, and; (ii)without maintaining segregated reserves for that purpose in their balance sheets.

73A Employer's schemes without segregated reserves are frequently (but not exclusively) run bygovernment institutions. The payment of certain benefits directly by employers does notdetract from their social character, and consistency requires that the financing of thesebenefits be recorded as imputed receipts.
74

The valuation of employers' imputed social contributions may pose problems if the associatedbenefits are due in future (old age pensions, for example). In principle, the net current value ofsuch promised future benefits must be determined.

74A In the case of mature schemes, for the sake of simplicity, the value of employers' imputedsocial contributions may be estimated as the value of benefits provided in the current period
less any employees' contributions to the scheme. For instance, if, during a particular
accounting period, an employer is promising his or her employees future pensions, the valueof the imputed employers' contributions may be estimated as the value of pensions actually
paid by the employer to retired employees in the current accounting period, less any paymentsthat existing employees make to the employer in order to maintain their pension rights.
75

Social contributions paid by protected persons (ref. 12) are payments made by individuals andhouseholds to social protection schemes in order to obtain or keep the right to receive social
benefits.

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75A Social contributions paid by protected persons may be deducted at source from pay-rolls orcollected separately. They may be collected jointly with personal income tax, as in the
Netherlands.
75B There are important differences between the ESSPROS' and National accounts' definitions ofcontributions of protected persons. These are further explained in Appendix V.
75bis Social contributions which are the liability of the protected persons but withheld at source by
the social protection scheme and transferred to other social protection schemes on behalf ofprotected persons are recorded as social contributions paid by protected persons in the
ESSPROS data on receipts of the recipient scheme.
76

Social contributions paid by protected persons are broken down by category into:(i)Social contributions paid by Employees (ref. 121);(ii)
Social contributions paid by Self-employed persons (ref. 122);(iii) Social contributions paid by Pensioners and other persons (ref. 123).

76A These categories refer to the circumstances in which a person contributes to the social
protection scheme and not to the person's wider circumstances. For instance, someone
receiving an old age pension may still pay employees' social contributions (ref. 121) through afull-time or part-time job.
77

General government contributions (ref. 2) consists of:
(i)
(ii)

the cost to general government of running government-controlled non-contributory
schemes, and;financial support provided by general government to other resident social protection
schemes.

77A Class (i) includes, for instance, government expenditure on government-controlled schemesthat guarantees a certain minimum income to all residents of the country in question and thecost of providing goods and services to indigent households as a matter of public assistance.
Class (ii) includes, among others, unrequited payments made by government to government
and not government-controlled social protection schemes to contribute to the cost of benefits
provided by these schemes, supporting their administration costs or covering deficits incurred
over current or previous accounting periods. Also included here are capital transfers in theform of extraordinary payments by government designed to increase the actuarial reserves ofsocial protection schemes and the proceeds of lotteries which government puts to their use.
77B Both current and capital transfers are included (see §36A). A clear distinction should be madebetween transfers that institutional units running a scheme receive in their capacity ofadministrators of social protection schemes and transfers which they receive in othercapacities. The former result in assets owned and made available to the scheme by theinstitutional units, meaning that they are granted specifically to finance social protection
and are thus recorded as general government contributions. The latter result in assets
owned but not made available to the scheme by the institutional units and are thus notrecorded in ESSPROS. For example, investment grants provided to an institutional unit
specifically for the purpose of delivering social housing through a social protection scheme
are included, but investment grants provided to an institutional unit for the purpose of
construction in general are excluded.
77C General government contributions do not cover actual or imputed contributions which general
government makes to secure benefits to its own employees, former employees and theirdependants (these are classified as Employers' social contributions). Also excluded are

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donations that general government social protection schemes make to other social protection
schemes (these are classified as Transfers from/to other schemes) (8).
77D If, for budgetary reasons, the government takes money out of the reserves of governmentcontrolled social protection schemes, the relative amount of this capital transfer is accounted
as negative General government contributions for those schemes.
78

The category of General government contributions is broken down into Earmarked taxes andGeneral revenue.

79

Earmarked taxes (ref. 21) are the proceeds from taxes and levies which, by law, can be used
only to finance social protection.

79A The essential difference between earmarked taxes and compulsory social contributions is thatsocial contributions are paid to secure personal entitlement to the benefits, whereas
earmarked taxes secure no such rights.
79B By convention all periodic payments by protected persons, or for protected persons by theiremployers, into compulsory universal schemes are classified as social contributions (ref. 1) if
levied as a function of income, payroll, or the number of employees.
79C All kinds of taxes may be earmarked for social protection financing.
80

General revenue (ref. 22) are general government contributions from sources other thanearmarked taxes.

81

Transfers from other schemes (ref. 3) means unrequited payments received from other social
protection schemes. These are broken down in two categories.

82

Re-routed social contributions are payments that a social protection scheme makes on its own
behalf to another scheme in order to maintain or accrue the rights of its protected people tosocial protection from the recipient scheme. Even if such payments only involve one
transaction from one scheme to another, the ESSPROS records the following two flows ofequal value:(i)in the expenditure of the paying scheme, the amount of transfers to other schemes
made on its own behalf for the benefit of protected people (Social contributions rerouted to other schemes; see paragraph 104);(ii)

in the receipts of the recipient scheme, social contributions paid by the paying
schemes on their own behalf for the benefit of protected people (Social contributions
re-routed from other schemes ref. 31).

82A On a national level, re-routed social contributions recorded in the receipts of social protection
schemes are held to balance out with re-routed social contributions recorded as expenditure ofschemes, except for possible transactions with the Rest of the World.
82B An example of re-routed social contributions occurs when an unemployment benefit
scheme pays social contributions to the sickness scheme for the benefit of its beneficiaries.
Note that the transfer of funds relating to an insured person moving from one scheme toanother is outside the scope of the ESSPROS Core system. Such transactions result in no net
change in either the funds available or the liability to deliver social protection and are therefore
financial and not distributive transactions (see §36).

(8) See also Appendix VI, which contains an overview of the classification of various government disbursements.

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582bis Social contributions which are the liability of the protected persons but are withheld at sourceby the social protection scheme and transferred to other social protection schemes on behalfof protected persons are recorded in the ESSPROS data on receipts as social contributions
paid by protected persons (see paragraph 75bis) and not as re-routed social contributions.
83

Other transfers from other schemes (ref. 32)
An example of other transfers from other schemes is contributions in the form of a capitaltransfer made by one scheme to reduce the deficit of another.

83A Transfers from/to other schemes exclude:(i)payments for delivery of goods or services (there is a quid pro quo);(ii)

the transfer associated with the movement of funds linked to an insured person
switching from one scheme to another. This transaction is not recorded in the

ESSPROS core system (see §82B);(iii)

social contributions that social protection schemes pay on their own behalf for the
benefit of their beneficiaries to other social protection schemes. These are recorded

as re-routed social contributions from/to other schemes (see §82);(iv)

payments made by the government acting in its capacity of public authority rather thanas an administrator of social protection schemes. Such payments are classified as
General government contributions;(v)

payments between schemes as a consequence of transactions carried out by one
scheme on behalf of the other, for example, when a lower government scheme acts
as an intermediary for a central government scheme. These payments are not shown,because the ESSPROS only records transactions in the accounts of the principaltransactors. See paragraphs 137 to 139;(vi)

unrequited payments that resident social protection schemes receive from/pay to nonresident schemes. As the latter belong to the sector Rest of the World (see chapter 9),
which is defined as a grouping of units without any characteristic functions andresources, they are not identified separately. The payments in question will therefore
be classified as Other receipts.

83B On a national level, transfers to and from other schemes are held to balance out, as for each
item of expenditure classified as a transfer between schemes there should be a corresponding
receipt in the same category and of the same amount.
84

Other receipts (ref. 4) means miscellaneous receipts of social protection schemes. They arebroken down into receipts of property income and other.

85

Property income (ref. 41) is the income receivable by the owner of a financial asset or atangible non-produced asset in turn for providing funds to, or putting the tangible nonproduced asset at the disposal of, another institutional unit.
In practice, it refers mainly to actual interest and dividends. Receipts from property income
also include any entrepreneurial income, such as the proceeds from the exploitation of
dwellings, credited to the scheme by the institutional unit that runs it. Note that, as social
protection schemes by definition do not undertake production activities, they cannot
themselves generate entrepreneurial income.

86

The category Other (ref. 42) groups miscellaneous receipts not otherwise attributable, such asproceeds of collections (mainly gifts from households), net proceeds from private lotteries,

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Receipts of social protection schemes

5claims on insurance companies and large gifts such as legacies in the form of capitaltransfers from the private sector.
This category does not include any direct payments made by beneficiaries towards the cost ofsocial benefits in kind by way of cost-sharing. Such payments are receipts of the institutional
units that sell these goods and services and not of social protection schemes.

5.3 Classification of institutional sectors
from which receipts originate
Table D: Classification of institutional sectors from which receipts of social
protection
schemes originate
1

2

All resident institutional units
11

Corporations (non-financial and financial)

12

General government
121
Central government
122State and local government
123
Social security funds

13

Households

14

Non-profit institutions serving households

Rest of the world

87

The definitions of the institutional sectors from which the receipts of social protection schemes
originate are the same as those for the national accounts.

88

The institutional unit is defined as an elementary economic decision-making centre
characterised by uniformity of behaviour and decision-making autonomy in the exercise of its
principal function. A resident unit is regarded to constitute an institutional unit if it has decisionmaking autonomy in the exercise of its principal function and either keeps a complete set ofaccounts or is such that it would be possible and meaningful, from both an economic and legal
viewpoint, to compile a complete set of accounts if required.
In order to be said to have autonomy of decision in the exercise of its principal function, a unitmust:

be entitled to own goods or assets in its own right, and therefore be able to exchange
the ownership of goods or assets in transactions with other institutional units;be able to take economic decisions and engage in economic activities for which it isheld to be directly responsible and accountable at law;be able to incur liabilities on its own behalf, to take on further obligations orcommitments and to enter into contracts.

A complete set of accounts means accounting records covering all economic and financialtransactions carried out during the accounting period, as well as a balance sheet of assets andliabilities.

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Receipts of social protection schemes

5Households are held to always enjoy autonomy of decision in respect of their principal function
and must therefore be regarded as institutional units, even though they do not keep acomplete set of accounts.
89

Institutional sectors are aggregations of institutional units on the basis of similar economic
behaviour.

90

The category All resident institutional units (ref. 1) groups all institutional units that are resident
in the country. The principles of residence are set out in Chapter 9.

91

The sector Corporations (ref. 11) consists of institutional units whose distributive and financialtransactions are distinct from those of their owners, whose principal activity is the production of
goods and services and which are market producers.
Included in this sector are co-operatives, limited liability partnerships and quasi-corporations(that is, market producers without independent legal status that have an economic andfinancial behaviour different from that of their owners, implying that the de facto relationshipwith their owners is one of a corporation to its shareholder).
Corporations may run social protection schemes in their role as insurance companies or by
operating non-autonomous schemes for the benefit of their employees. They secure benefits
for their employees by paying actual or imputed employers' social contributions.

92

93

The sector General government (ref. 12) consists of:(i)all the resident distinct types of legal entities established by political processes whichhave legislative, judicial or executive authority over other institutional units within agiven area, to the extent that their main output consists of collective services orindividual goods and services which are provided free or at prices which cover lessthan 50% of production costs;(ii)

resident non-profit institutions that provide most of their output to other institutional
units free or at prices which cover less than 50% of their production costs and that arecontrolled and financed by the type of units mentioned in (i);(iii)

all resident social security funds, that is, institutional units whose principal activity is toprovide social benefits and which fulfil each of the following criteria:
 by law or by regulation certain groups of the population are obliged to participate
in the scheme or to pay contributions;
 government is responsible for the management of the institution in respect of
the settlement or approval of the contributions and benefits independently fromits role as supervisory body or employer.

The sub-sector Central government (ref. 121) covers all general government institutional unitsof type (i) above whose authority extends over a whole national territory and all units of type(ii) they control and finance.
The sub-sector State and local government (ref. 122) covers all general government
institutional units of type (i) mentioned above whose authority is restricted to a part of thenational territory and all units of type (ii) they control and finance. State (regional) governments
occur in countries with federal constitutions such as Belgium, Germany, and Austria.
The sub-sector Social security funds (ref. 123) combines all general government units of type(iii) irrespective of the geographical area in which they are active (9).

(9) The ESSPROS does not define the concept of "social security scheme". Social security funds are institutional units that may run
schemes with widely diverging characteristics.

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Receipts of social protection schemes

5

Within the framework of social policy, general government usually runs a variety ofcontributory and non-contributory schemes. It may also grant current and capital transfers toother institutional units, in particular non-profit institutions, to finance and support the social
protection schemes they administer. Government secures benefits for public servants and its
other employees by paying actual employers' social contributions.
Normally, it will also provide certain social benefits directly to its employees.
Finally, government may provide social protection through other channels (such as by granting
fiscal benefits and paying subsidies to market producers), but with the exception of payabletax credits (see paragraph 112bis) these are not recorded in the Core system of the
ESSPROS.
94

The sector Households (ref. 13) covers individuals or groups of individuals as consumers andpossibly also as entrepreneurs producing market goods and non-financial and financial
services provided that, in the latter case, the corresponding activities are not those of separate
entities treated as quasi-corporations (10). It also includes individuals or groups of individuals
as producers of goods and non-financial services for exclusively own final use.
Households as consumers are defined as all resident small groups of persons, not necessarily
related, who share the same living accommodation, who pool some, or all, of their income andwealth and who consume certain types of goods and services collectively, mainly housing andfood.
Domestic employees living on the employer's premises do not belong to the employer's
institutional household. Persons living permanently or for a very long time in an institution andhaving no or little autonomy of action or decision in economic matters are treated as
belonging, together, to a single institutional household, that is, a single household. Examples
are members of religious orders living in monasteries, long-term patients in mental hospitals,
prisoners serving long sentences and old people living permanently in retirement homes.
In modules based on micro data, the sector Households may be sub-sectored according tocriteria such as the composition of the household, the level and largest source of its income
and the type of area in which the household has its accommodation.
Households appear in the system as recipients of social benefits and contributors to social
protection schemes by paying employers' contributions (if they are market producers or
employers of paid domestic staff) and social contributions paid by the protected person.

95

The sector Non-profit institutions serving households (ref. 14) consists of all resident non-profit
institutions that provide most of their output to households free or at prices which cover lessthan 50% of their production costs, except those which are controlled and mainly financed bygovernment authorities. Their principal resources, apart from those derived from occasionalsales, are derived from voluntary contributions in cash or in kind from households in theircapacity as consumers, from payments made by General government and from property
income. (Compare the definition of General government in paragraph 92 (ii)).
Many social protection schemes are run by Non-profit institutions serving households. In theirrole as employers, they may pay actual employers' social contributions or provide social
benefits directly to the employees working in these institutions.

96

The category Rest of the World (ref. 2) consists of all non-resident institutional units.

(10) The transactions of quasi-corporations are recorded in the sector Corporations.

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5

The ESSPROS covers the transactions of the Rest of the World only insofar as they relate toresident social protection schemes. Examples are social contributions paid by non-resident
households into resident social protection schemes. The definition of residence is given in
Chapter 9.

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Expenditure of social protection schemes

6

6

Expenditure of social
protection schemes

6.1 Introduction
97

The expenditure of social protection schemes is classified by type, which indicates the natureof, or reason for, the expenditure.

98

The ESSPROS distinguishes four main categories of expenditure. The first is expenditure onsocial benefits, that is, resources which are transferred to beneficiaries in the form of cash or
goods and services. The description of this type of expenditure is one of the main aims of the
ESSPROS; Part 2 of the Manual is entirely devoted to the description of the various types ofsocial benefits. The second category of expenditure relates to administration costs charged tothe scheme. The third and fourth categories deal with transfers to other schemes andmiscellaneous expenditure.

6.2 Types of expenditure
Table E: Classification of expenditure of social protection schemes by type99

1

Social benefits

2Administration costs

3

Transfers to other schemes
31
Social contributions re-routed to other schemes
32
Other transfers to other schemes

4

Other expenditure
41
Property income
42
Other

Social benefits (ref. 1) consists of transfers, in cash or in kind, by social protection schemes tohouseholds and individuals to relieve them of the burden of a defined set of risks or needs.
The conventionally agreed list of risks or needs - functions - is given in paragraph 16 above.

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Expenditure of social protection schemes100

6

In the Core system, social benefits refer exclusively to cash payments, reimbursements anddirectly provided goods and services. These are all direct benefits in the sense that they areadvantages that imply an equivalent rise in the (adjusted) disposable income of thebeneficiaries.

100bis Collective services are services for collective consumption that are provided simultaneously
to all members of the community or all members of a particular section of the community (e.g.
all households living in a particular region). In ESSPROS social benefits refers only to goods
and services for individual consumption and therefore excludes collective services.
100A Social benefits may be passive, that is, trying to make up for a loss suffered through thematerialisation of a social risk or need; or active, that is trying to avoid or find a remedy for aparticular social risk or need.
100B Cash benefits may be granted as flat-rate amounts or be determined as a function of thebeneficiary's needs, (previous) earnings, social contributions paid and so forth. In the latter
case, various thresholds and ceilings may be applied. Benefits in the form of reimbursements
and directly provided goods and services normally depend on the beneficiary's needs.
Sometimes the beneficiary is required to make a contribution towards the cost of provisions in
kind (such payments are not classified as social protection expenditure).
100C Chapter 7 of this Part contains the main features of the classifications of social benefits andparagraphs 122 through 131 describe the principles for their valuation. Part 2 of this Manual
describes the various types of social benefits in detail.
101

Resident social protection schemes may provide social benefits to both resident and nonresident protected people. Conversely, resident households and individuals may receive social
benefits from non-resident schemes.
These latter benefits are not recorded in the accounts, as they do not relate to resident social
protection schemes (see chapter 9).

102

Administration costs (ref. 2) means the costs charged to the scheme for management andadministration thereof.

102A Administration costs include outgoings on registration of beneficiaries, collection ofcontributions, administration of benefits, inspection, reinsurance, financial management andgeneral overheads (see paragraph 130 on the valuation of administration costs).
102B The Core system does not require a breakdown of administration costs.
102C Administration costs exclude:(i)the costs of health care and other individual goods and services produced by theinstitutional unit supporting the scheme for provision to beneficiaries. These costs,
including those of administrative services necessary to produce the goods andservices, are classified as Social benefits in kind (see paragraph 124 on the valuationof benefits in kind produced by the institutional unit supporting the scheme);(ii)

outlays on goods and services bought from market producers for provision tobeneficiaries, also classified as Social benefits in kind (see paragraph 123);(iii)

payment of interest on loans taken up by the scheme; these are all classified as Other
expenditure, under property income;(iv)

compensation of public administration employees responsible for general supervisionand social policy in a broad sense. As these employees are not directly and expressly
involved in running social protection schemes, their salaries are not recorded in the
ESSPROS.

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Expenditure of social protection schemes

6102D For simplicity, administration costs are not recorded when they form an inseparable part ofinternal running costs (intermediate consumption) of the institutional unit which runs thescheme. This will apply to all unfunded employer's schemes, and possibly to certain public
assistance and funded employers' schemes. However, estimates of the administration costs
involved may be provided in additional tables.
103

Transfers to other schemes (ref. 3) means unrequited payments made to other social
protection schemes. These are broken down in two categories.

104

Re-routed social contributions are payments that a social protection scheme makes on its own
behalf to another scheme in order to maintain or accrue the rights of its protected people tosocial protection from the recipient scheme. For a more detailed explanation, see paragraph82.

104bis Re-routed social contributions to other schemes are broken down by function of social
protection which should be completed on the basis of the function of the qualifying benefit
and not the final purpose of the contribution. For example, contributions for health carepaid by an unemployment scheme for the benefit of persons receiving an unemployment
benefit are reported in the unemployment function and not sickness/health care.
105

Other transfers to other schemes
An example of other transfers payable to other schemes is the transfer of funds (capitaltransfer) made by one scheme to reduce the deficit of another.

105A For a more detailed explanation, see paragraph 83A.
105B On a national level, other transfers to and from other schemes are held to balance out, as foreach item of expenditure classified as a transfer between schemes there should be acorresponding receipt in the same category and of the same amount.
106

Other expenditure (ref. 4) means miscellaneous expenditure by social protection schemes.
These are broken down into payment of property income and other expenditure.

107

Property income (ref. 41) is the income payable by the owner of a financial asset or a tangible
non-produced asset in turn for providing funds to, or putting the tangible non-produced asset
at the disposal of the scheme via the institutional unit supporting it.

107A In practice, this item usually refers to actual interest payable by the scheme to banks and othercreditors in respect of loans taken up.
108

The category Other (ref. 42) includes all miscellaneous payments not attributable elsewheresuch as the payment of taxes on income or wealth. Capital repayments on loans are notincluded here; these are financial transactions which fall outside the scope of the Core system.

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Social benefits, main classifications

7
109

7

Social benefits, mainclassifications

In the Core system, social benefits are classified by function and by type. The function of asocial benefit refers to the primary purpose for which social protection is provided, irrespectiveof legislative or institutional provisions (see paragraphs 16 and 17). The type of benefit refers
to the form in which the protection is provided.

7.1 Classification by function
110

Eight functions of social protection are distinguished in the ESSPROS (see Table F).

Table F: Definitions of the functions of social protection
Function

Brief description

1. Sickness/Health care

Income maintenance and support in cash in connection with physicalor mental illness, excluding disability. Health care intended to maintain,
restore or improve the health of the people protected irrespective of
the origin of the disorder.

2. Disability

Income maintenance and support in cash or kind (except health care)in connection with the inability of physically or mentally disabled people
to engage in economic and social activities.

3. Old age

Income maintenance and support in cash or kind (except health care)in connection with old age.

4. Survivors

Income maintenance and support in cash or kind in connection withthe death of a family member.

5. Family/children

Support in cash or kind (except health care) in connection with thecosts of pregnancy, childbirth and adoption, bringing up children andcaring for other family members.

6. Unemployment

Income maintenance and support in cash or kind in connection with
unemployment.

7. Housing

Help towards the cost of housing.

8. Social exclusion not else- Benefits in cash or kind (except health care) specifically intended towhere classified
combat social exclusion where they are not covered by one of theother functions.

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110A Compilers of the statistics are encouraged to analyse the characteristics of the benefit, itseligibility criteria, and the reasons for which it is granted. In some cases, the benefit will have a
purpose that corresponds to a single function of social protection. In this case, data are directly
allocated to that function.
However, in others, the benefit will have a purpose that corresponds to multiple functions – i.e.
it is a multifunction benefit. The purpose of such benefits may correspond either to multiple
functions within the scope of social protection (see §110) or to a combination of functions
within and outside the scope of social protection. In these cases, it is necessary, whereconceptually possible, to split the data for the benefit into components having separate
objectives11 that can each be treated separately – i.e. either allocated to a single relevant
function in a manner that accurately reflects the extent to which the component addresses theassociated risks and needs of social protection or, if it addresses risks or needs outside thescope of social protection, excluded completely. This split is of key importance as it is the only
way of ensuring that the scope of the data and its breakdown by function is comparable
between countries, bearing in mind that countries differ considerably in the institutionalorganisation of their social protection systems. The exceptional circumstances under which a
split may not be applied for practical reasons despite being conceptually possible are outlined
under §110G.
110B The functional classification of a benefit is always determined by its purpose. It should not be
determined by: the main field in which the scheme operates. For instance, an Old age pension
scheme can grant benefits that should be classified under the Survivors or
Family/children functions.
 the personal situation of its recipient: for example, a widow may receive an
unemployment benefit or a retired person may be given a housing benefit.
 purposes it serves other than the one for which it is formally intended: this is known as
blurring of objectives. For practical reasons, ESSPROS does not normally correct for
implicit substitution. Examples are disability benefits granted in times of highunemployment as an alternative to unemployment benefits. However, if substitution is
explicit in the eligibility criteria, the benefit is allocated to the function it serves and not
to its official function. For example, ESSPROS classifies early retirement benefits
explicitly granted for labour market reasons under the Unemployment function.
 the type of goods or service provided: particular types of goods and services may be
granted in connection with several functions, depending on the purpose. One such
example is home care.
Placing a given social benefit under the correct function is not always easy. Problems arise inparticular for multifunction benefits.
110C When it is conceptually possible to split a multifunction benefit into components having
separate objectives, expenditure should be split according to the amounts granted in relation
to different risk/needs. Each part should then either be allocated to the relevant function within
ESSPROS or, if it addresses a risk/need outside the scope of ESSPROS, excluded
completely.
110D When it is not possible to split a multifunction benefit into components, expenditure should beallocated to a single function. In order to do so, apply the first appropriate approach from thefollowing list (in descending order): Dominant function: Assess if the benefit has a “dominant” function – i.e. if one of theobjectives has a higher priority than the other(s). This assessment should consider not

11 Further guidance on how to assess whether it is conceptually possible to split a benefit into components having separate objectives isprovided in the “Compendium of methodological clarifications”.

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Social benefits, main classifications

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only the objectives of the benefit and what key social issue(s) it is attempting to address
but also the eligibility criteria and the explicit/implicit targeting of the benefit12. If a dominantfunction can be identified, then all expenditure should be allocated to that function. If thatfunction is outside the scope of ESSPROS, then it should be excluded completely.
 Guidance in the ESSPROS Manual: In absence of a dominant function, check if there is any
specific guidance in part 2 of the ESSPROS Manual on how to proceed. If such guidanceexists, then follow that guidance.
 Order of specialisation: In absence of a dominant function and specific guidance in the
ESSPROS Manual, and where a benefit corresponds only to ESSPROS functions,
expenditure should be allocated to the most specialised function of those covered. The
order of specialisation (high to low) is as follows: Sickness/Health care (health care),Housing, Old age, Disability, Survivors, Unemployment, Sickness/Health care (cashbenefits), Family/children, and Social exclusion not elsewhere classified. For example, inthe case of a housing benefit provided only to large families, all expenditure should bereported to the housing function, which is more specialised.
Note that where the benefit corresponds to functions both within and outside the scope of
ESSPROS, the order of specialisation cannot be applied. Instead, the benefit should beanalysed in detail and any relevant guidance in the “Compendium of methodologicalclarifications” should be used to identify the most appropriate function to which all the
expenditure should be allocated. If that function is outside the scope of ESSPROS then it
should be excluded completely.

110E In either case, both the treatment applied and the justification for it should be documented inassociated qualitative information/metadata.
110F In the case that a benefit or component of a benefit of a scheme is excluded because it
addresses a function which is outside the scope of ESSPROS, the corresponding receipts ofthe scheme should be reduced accordingly.
110G This approach should be applied at all times, using actual data to produce a breakdown where
possible or, if necessary, using appropriate estimation methods. Exceptionally, in the case of abenefit for which the total value represents an insignificant proportion of any of the functions
that it covers (i.e. <5%), and where the cost of developing a split outweighs the added value ofthe information, then the benefit can be allocated to a single function following guidance in§110D in relation to benefits that cannot be split into components.
110H In case of benefits which include supplements, the benefit always consists of two types ofcomponent. A main benefit, provided to all beneficiaries, and supplements, which are provided(in addition to the main benefit) only to beneficiaries meeting additional conditions.
Supplements may be discretely defined and added to the value of the main benefit (e.g.
irrespective of the value of the main benefit, a supplement of x is paid in case of situation 1, yin case of situation 2, etc.) or expressed as a higher rate (e.g. irrespective of the value of themain benefit the supplement increases the base amount by x% in case of situation 1, y% incase situation 2, etc.). In the former case the value of the supplement is fixed for each situationwhilst in the latter case it may vary according to the value of the main benefit.

12 The use of the implicit targeting of a benefit to determine the dominant function may appear at odds with the fact that ESSPROS does
not normally correct for implicit substitution. However, this does not result in implicit substitution as the objectives of the benefit, andassociated functions, will have already been identified on the basis of explicit characteristics of the benefit prior to the assessment of
the dominant function.

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Supplements are components whose objectives differ from those of the main benefit in thesense that they share the objectives of the main benefit but supplement these with additional
objectives. Only those whose additional objectives intend to serve a function other than thatserved by the main benefit should be considered multifunction benefits and treated as such inaccordance with §110D, with the additional objectives of the supplement being treated as
dominant over those of the main benefit. Any supplements whose additional objectives intend
to serve the same function of the main benefit are not considered, according to §110A,
multifunction benefits and should be reported together with the main benefit.
Note that supplements are not to be confused with benefits provided by supplementary
schemes. Benefits provided by supplementary schemes serve to top up, extend the coverageof or replace benefits provided by a basic scheme (see chapter 4.2.6). In contrast to
supplements, they are distinct from the benefits they intend to enhance and are provided by aseparate scheme. Further, they normally belong in the same function and detailed
classification as the benefits they intend to enhance.

7.2 Classification by type111

The classification of social benefits by type is on two levels: firstly a concise generalclassification which in principle applies to all functions, and secondly a more detailed
classification where the items are only relevant to one or a limited number of functions. This
chapter presents the general classification; the definitions of the categories on the detailed
level are contained in Part 2 of this Manual.
Table G: General classification of social benefits by type1

Social benefits
11

Cash benefits
111
Periodic112
Lump sum12

Benefits in kind

The general definition of Social benefits is given in paragraph 99 above.
112

A cash benefit (ref. 11) is a benefit:(i) paid in cash, and;(ii) that does not require evidence of actual expenditure by the recipients.
Benefits that require evidence of actual expenditure by the beneficiaries are reimbursementsthat the System classifies as Benefits in kind (ref. 12).

112bis Cash benefits include payable tax credits, which may also be known as non-wastable or
refundable tax credits. Payable tax credits are benefits delivered through the fiscal system thatare paid irrespective of any tax liability and may therefore be granted to non-taxpayers. The
part of any payable tax credit in excess of any tax liability is always paid directly to thebeneficiary in cash. The part that offsets any tax liability may also be paid directly in cash orreceived as a fiscal benefit – i.e. reduced liability to pay tax.
112ter Irrespective of the delivery method, the full value of a payable tax credit (cash and fiscal
parts) is treated as a cash benefit in ESSPROS. The only exception is in the case that the tax

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credit is provided to reimburse the recipient in whole or in part for certified expenditure, when
the full value of the credit is treated together with other forms of reimbursement as a benefit inkind (see paragraph 115A). The treatment of payable tax credits in ESSPROS is consistent
with the approach applied in national accounts where payable tax credits are treated asgovernment expenditure (and not as reduced tax revenues).
113

Periodic cash benefits (ref. 111) are cash benefits paid at regular intervals, such as each
week, month or quarter.

114

Lump sum benefits (ref. 112) are cash benefits paid on a single occasion or in the form of a
lump-sum.

114A Examples are maternity benefits, redundancy lump-sums and very small pensions that, forconvenience, are paid as a single amount. Exceptionally such benefits may give rise to morethan one payment; for example maternity benefits in Luxembourg are paid in three
instalments.
115

Benefits in kind (ref. 12) are benefits granted in the form of goods and services.

115A They may be provided by way of reimbursement or directly. Reimbursements are benefits inthe form of payments that reimburse the recipient in whole or in part for certified expenditureon specified goods and services. Directly provided benefits are goods and services granted
without any pre-financing by the beneficiary. They may be produced by the institutional unit orunits which administer the social protection scheme, or be purchased from other producers.
This distinction is important for the valuation of the benefit (see paragraphs 123 and 124).
115B Contributions made by a recipient towards the cost of directly provided goods and services(cost-sharing) are not part of the value of social benefits. These contributions are not recordedin the ESSPROS as they are considered to be consumption expenditure by households (seealso paragraph 125).
115C Sometimes it is difficult to establish whether certain payments that government units make to,or for the benefit of, producer units should be classified as Social benefits in kind. The
following rules may help in such situations:(i)Current unrequited payments made by general government to resident social
protection schemes are classified as Transfers to other schemes or General
government contributions depending on whether the payment is made on behalf of ageneral government scheme or not.
(For example: government transfers to a non-profit organisation that provides free, ornearly free, home help services to sick and disabled people.)(ii)

Current unrequited payments by general government made to producers to:

(iii)



influence their levels of production;

influence their prices irrespective of the units that acquire the output;

enable the factors of production to receive adequate remuneration, areclassified as Subsidies, which are not recorded in ESSPROS.

Payments by general government to market producers to cover in whole or in part thecost of goods and services provided directly and individually to households whichhave a legal right to them are classified as directly provided Social benefits in kind if
the payments fall under one of the social protection functions.
Examples follow: the Danish government payments to independent medical
practitioners for medical care provided under the national health system andgovernment payments to retirement homes to the benefit of people that have a legal
right to care in such homes; the Swedish local government payments to private healthcare institutions providing, by contract with County Councils, health care or dental
care, and the local government payments to private entrepreneurs providing, by

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contract with municipalities, social care for elderly, disabled, children, measures forchildren and young people living outside their household or institutional measures for
adult alcohol and drug abusers; the Austrian state and local government payments toretirement and nursing homes.
(iv)

Current payments by general government to market producers to enable them toreduce the price of products for specific groups of individuals or households
previously defined. These payments are classified as directly provided Social benefits
in kind if they fall under one of the social protection functions.
Examples are government payments to social housing corporations and government
payments to transport companies to provide reduced fares for the elderly. TheESSPROS also places government payments to hospitals to reduce the price of
health care in this category, even though it may be argued that they have strong
characteristics of case (ii) above.

(v)

Payments made by government to social protection schemes to secure benefit rights
for employees of an enterprise that has applied for a moratorium) are considered tobe:loans where the enterprise may be expected to refund the payments, or;transfers to enterprises where government renounces the right to refunds, or;

so-called other volume changes in financial assets, in case of bankruptcies.

The ESSPROS does not record these flows as social expenditure of government, and thevalues of these payments only appear as Actual employers' contributions paid by enterprises.
Appendix VI contains a more complete overview of the classification of various government
disbursements.

7.3. Means-testing
116

Social benefits are broken down between means-tested and non means-tested benefits.

117

Means-tested social benefits are social benefits which are explicitly or implicitly conditional on
the beneficiary's income and/or wealth falling below a specified level.

117A This specified level is not necessarily uniquely defined at the national level; it may change fromscheme to scheme and may even differ between various types of benefit provided by a single
scheme. Usually, the specified level takes account of the beneficiary's family composition.
117B Although most means-tested benefits are targeted at low income households, some may bedirected at wider sections of the population. For example, certain schemes in the Netherlands,
Italy, Latvia, Portugal, Romania, Slovakia and Spain provide means-tested housing and/or old
age or social support benefits to households that cannot be regarded as being indigent.
117C In principle, means-tested benefits may be granted under all functions. They are particularlycommon, however, in the functions Housing and Social exclusion not elsewhere classified.
117bis Means-tested social benefits refer to benefits where entitlement is explicitly or implicitly
conditional on the beneficiary's income/wealth. This covers cases where income/wealth isused to determine (1) only entitlement or (2) both entitlement and amount. The latter caserefers to a benefit that is degressively linked to income/wealth and reduced to zero as income
rises, the point at which the amount tapers to zero being the level of income/wealth at which
there is no entitlement. Benefits where income/wealth is used to determine only the amount ofbenefit received (i.e. degressively linked to income/wealth but only to a certain minimum levelso that there is always some entitlement) are not considered to be means-tested.

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Social benefits, main classifications

7

117ter Implicit conditionality in the case of means-tested benefits refers to rules that do not directly
reference a beneficiary’s income/wealth but either reference situations that imply previous
testing of income/wealth (e.g. the benefit is only available to persons already in receipt ofanother means-tested benefit such as income support) or reference characteristics of theindividual that may be considered a proxy for income/wealth (e.g. homelessness or refugee
status).

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Accounting conventions

8

8

Accounting conventions

8.1 Introduction
118

This chapter discusses a number of general accounting conventions. It deals with theprinciples of exhaustiveness and consistency, valuation, time of recording and the accounting
period, netting and consolidation and the recognition of the principal party to transactions.

8.2 The principles of exhaustiveness andconsistency
119 All transactions that fall within the scope of the ESSPROS must be recorded in the accounts.
The principle of exhaustiveness is of primary importance for the international comparability ofsocial protection data.
120

Special attention should be given to schemes that provide considerable benefits in terms of
aggregate value, but for which there are little administrative data (such as unfunded company
early retirement schemes and continued payment of wages and salaries by employers during
sickness).
If available sources do not provide clear data, appropriate estimates must be made. This could
be done by comparison with similar schemes for which sufficient information is available.

121

At all times, consistency must be ensured in the accounts. For example, if a certain type of
benefit is entered in the accounts, the relevant financing transactions must be included under
the receipts of social protection schemes. Another example is expenditure on Transfers toother schemes which must have, somewhere in the system, the same value as the receipts
from Transfers from other schemes.
Finally, the recorded transactions of all the individual social protection schemes should add up
exactly to the national totals.

8.3 Valuation
122

The ESSPROS values transactions at current exchange value, that is, the value at which flows
and stocks are, or could be, exchanged for cash. In certain cases, when it is not possible toestablish current exchange valued, goods and services are valued at their production cost.

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Accounting conventions

8

Normally, most social protection transactions are cash flows whose valuation does not poseany difficulties. The valuation of social benefits in kind directly provides to households is moredifficult.
123

124

If a scheme buys goods and services for provision to its beneficiaries from producer units, thesocial benefit is valued at the actual price agreed by the two parties. There should be no, or
only a relatively small, time lag between the time of purchase by the scheme and the time of
supply to the beneficiaries.
When this is not the case, the prices originally paid may no longer represent the real value ofthe benefits in kind provided. Under these circumstances, the benefits should, in principle, bevalued at the price that the same or similar goods and services would fetch on the market atthe time they are supplied to the beneficiaries.
If the institutional unit that manages the scheme produces the goods and services itself, there
are two possibilities. If the institutional unit is a market producer ( 13), the benefits in kind arevalued at the current market price for the same type of goods or services.
If the providing unit is a non-market producer (14), the benefits in kind are valued as the sum of
the costs incurred in their production and supply to the beneficiaries, that is, the sum of:
(i)
(ii)
(iii)
(iv)

Intermediate consumption (15)Compensation of employees (16)Consumption of fixed capital (17)Other taxes on production less other subsidies on production (18).

Other categories of costs, such as interest costs, are not taken into account. The element
Compensation of employees refers exclusively to personnel involved in the provision of social
benefits. So, for example, the salaries of doctors and nurses of State hospitals are included,
but the salaries of personnel in the Ministry of Health are excluded because they produce
collective rather than individual services.
125

Any portion of the full cost of goods and services which is met personally by the beneficiary is
excluded from the value of social benefits in kind. The share paid by the beneficiary ishousehold consumption expenditure - not social expenditure. It is a receipt for the producer ofthe goods and services in question, not a receipt for the scheme.

126

To summarise:social benefits produced by market producers are valued at the price that the same
goods and services fetch on the market minus the share paid by the beneficiaries
themselves to the scheme;(13) A "market producer" is a unit that produces goods and services and whose production costs are for 50% or more covered by income
from sales. Private non-profit institutions and government units may be market producers. All private producers other than non-profit
institutions are classified as market producers by convention.
(14) I.e., a private non-profit institution or a public unit whose production costs are for 50% or less covered by income from sales.
(15) Intermediate consumption is the value of goods and services consumed as inputs in the production process, excluding fixed assets
whose consumption is recorded as consumption of fixed capital (see ESA 2010 §3.88).
(16) Compensation of employees is the total remuneration, in cash or in kind, payable by an employer to an employee in return for work
done during an accounting period. Compensation of employees is made up of the following components: Wages and salaries andEmployers' social contributions (see ESA 2010 §4.02).
(17) Consumption of fixed capital represents the amount of fixed assets used up during the period under consideration as a result of
foreseeable economic obsolescence and normal wear and tear, including a provision for losses of fixed assets as a result of normal
accidental damage. Its value may deviate considerably from the values calculated via normal business depreciation methods or as
allowed for taxation purposes, especially when there is inflation (see ESA 2010 §3.139).
(18) Other taxes on production (ESA 2010 § 4.22) consist of all taxes that enterprises incur as a result of engaging in production,
independent of the quantity or value of the goods and services produced or sold. Other subsidies on production (ESA 2010 § 4.36)
consist of subsidies except subsidies on products which resident producer units may receive as a consequence of engaging in
production.

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

127

social benefits produced by non-market producers are valued at the cost of production
and supply minus the share paid by the beneficiaries themselves to the scheme.
If retirement homes, social housing corporations and similar are financed solely by thegovernment, it would be more convenient to estimate the value of these services on the basisof the actual government transfers to the scheme providing them, rather than according to theprinciples above. In the case this approach is applied, the following two conditions must be
observed:
(i)

(ii)

only that part of the government transfer that is used as actual social benefits should betaken into account, excluding any contributions towards other expenditure of the scheme
in the form of administration costs, transfers to other schemes or other expenditure.
For example, if the government contributes a lump sum to allow a scheme to provide
vocational training to unemployed for a single year and this amount includes amounts to
be used for the administration of the training as well as the actual costs of the training
programmes, then the amount intended for the administration costs should be deductedwhen estimating the value of the vocational training to be reported as benefits in kind.
where transfers are intended to cover expenditure on benefits spanning several
accounting periods, amortisation should be applied to distribute it across the periods
during which the benefits are provided.
For example, if the government contributes a substantial lump-sum to allow a scheme
to invest in its real estate and enable it to provide social housing during multiplereference periods (capital transfer in the form of an investment grant to be treated asgovernment contribution), this amount should be distributed between each of theaccounting periods during which the social housing funded by the transfer is provided
using amortisation. This will provide a more accurate reflection of the market price of the
housing services provided during the applicable accounting periods.

128

Social benefits in the form of interest-free or low-interest loans are valued at the amount ofinterest waived by the scheme in comparison with the current market value.

129

The Core system records social benefits without any deduction of taxes and other obligatory
levies payable on benefits by beneficiaries.

129bis Taxes and social contributions which are the liability of the protected persons but withheld atsource by the social protection scheme and transferred to the collection authority (either tax
authorities or another social protection scheme) on behalf of protected persons are recorded
as part of expenditure on social benefits of the scheme that withholds the taxes andcontributions.
130

With regard to the valuation of administration costs (see paragraphs 102 through 104), it isimportant to distinguish between the types of units which administer the schemes. If thescheme is run by a commercial insurer, for instance a life insurance company, administration
costs are valued by the actual fees that the commercial insurer charges (plus any othermanagement costs incurred by the scheme, such as attendance fees for the board ofgovernors). If the scheme is managed by government units or non-profit institutions,administration costs are valued at the sum of the costs incurred in administering the scheme(that is, intermediate consumption, compensation of employees, consumption of fixed capitaland taxes on production and imports less subsidies; see paragraph 124).
For reasons of simplicity, the value of administration costs is not imputed when such costs
form an inseparable part of intermediate consumption of the institutional unit that runs thescheme. This is the case for all unfunded employer's schemes and possibly for certain
government-controlled non-contributory schemes and funded employers' schemes.

131

Transactions denoted in foreign currency are converted into their value in local currency at therate prevailing when they are entered in the accounts. The midpoint between the buying andselling rate should be used, and any service charge must be excluded.

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8.4 Time of recording and the accounting
period132

In principle, all transactions are recorded on an accrual basis, that is, at the time the events
which create the related claims and liabilities occur.
For instance, employer's contributions are recorded at the time the work that gives rise to theliability to pay the contributions is done. Social benefits in cash are recorded at the time thebeneficiaries obtain the right to receive them. Reimbursements are recorded at the time thehousehold makes the relevant purchase. Other types of benefits in kind should normally berecorded at the times the goods are transferred or the services provided.
Social contributions are recorded in the Core system net of the part unlikely to be collected(when assessment/declaration data are used).
If social contributions data are collected from cash receipts, it is recommended to time adjust
them by estimating the average difference between the time the work that gives rise to theliability to pay the contributions is done and the cash receipt, if such difference exists.

133

In theory the accounting period can refer to any period of time. For their own purposes, thecountries may prefer periods that coincide with administrative years or intervals during which
the scales for social benefits and contributions remain unchanged. However, for the purposeof international comparisons, the calendar year seems the most appropriate accounting
period. The transactions recorded in the ESSPROS must therefore refer to the calendar
year (19).

8.5 Netting and consolidation
134

Netting occurs when the values of certain transactions arising in both receipts and expenditureare cancelled out against each other, leaving only a net balance shown either under receipts
or expenditure. Otherwise, the recording is said to be gross.

135

The ESSPROS recommends gross recording; for instance, interest received and interest paidby a scheme must not be offset against each other.
However, the ESSPROS does not record separately any transaction which corrects an earlier
erroneous or unauthorised one. In that case, the value of the rectifying transaction is netted
against the value of the previous transaction, as if neither had taken place. Examples ofrectifying transactions are the refund of overpaid social contributions and the repayment ofbenefits granted in error.
If the government claims excess reserves of government-controlled social protection schemes,
this is recorded under (negative) General government contributions for those schemes.

136

Consolidation refers to the mutual cancellation of transactions among schemes in the samegroup, for example, among resident government-controlled schemes or among the whole ofschemes operating in the country. The ESSPROS recommends not to use consolidation in its
accounts.

(19) If it proves impossible to make the required adjustments, the data for a financial year should be presented for the calendar year inwhich the greater part of the financial year falls.

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8.6 Recognising the principal party
137

When a unit carries out a transaction on behalf of another unit, the transaction is recorded onlyin the accounts of the unit on whose behalf the transaction is made. Some service charge may
appear in the accounts of the unit serving as intermediary.

138

In some cases it is not clear on whose behalf a transaction is carried out. For instance, in casethe central government makes payments to a lower government in order to enable theprovision of social benefits at a local level, who is running the social protection scheme, thecentral government or the local one? The answer is important, both in order to avoid double
counting in the System and for classifying all transactions correctly.
The general rule in such circumstances is that the unit which is dealing directly with thehouseholds must be held to be running the scheme. In the example given above, this implies
that local government is running the scheme, which is (partially) financed by contributions from
central government.
The only exception to this rule is when the unit dealing directly with the households has no
authority whatsoever over the terms of the benefits (for example, level of benefit or eligibility).
In this case, that unit is held to be acting on behalf of another unit. In the example above, thecentral government payment would then be recorded as a social benefit, and no transactions
would be recorded for the local government unit.

139

If the local government receives social contributions that it passes on to central government,
the general rule is again that the unit directly dealing with the contributors is held to receive thesocial contributions on its own behalf, except when it has no authority whatsoever over theterms under which the contributions must be made.

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The rest of the world

9

9

The rest of the world

9.1 Transactions with the rest of the world
140

The completion of the European Union internal market means that in many areas, including
social protection, transactions with the Rest of the World are gaining in importance.
The Rest of the World is a grouping of units without any characteristic functions andresources; it consists of non-resident units insofar as they are engaged in transactions withresident institutional units, or have other economic links with resident units.

141

The ESSPROS records transactions with the Rest of the World only insofar as they are carriedout between resident social protection schemes and non-resident units.
In the receipts of a social protection scheme, transactions with the Rest of the World canconcern the categories Social contributions and Other receipts. Examples of the former aresocial contributions paid by non-resident households or by non-profit institutions serving
households. However, no breakdown by sector of origin is required in respect of receipts ofsocial protection schemes from the Rest of the World. In the expenditure, transactions with theRest of the World can concern the categories "Social benefits" and "Other expenditure".

9.2 The definition of residence
142

The concept of residence in the ESSPROS is the same as used in the fifth edition of the
Balance of Payments Manual of the International Monetary Fund (IMF) and the national
accounts. The main definitions are summarised here.

143

An institutional unit is considered to be resident in a country when there exists some location dwelling, place of production or other premises - within the territory of that country on, or from,which the institutional unit engages and intends to continue to engage for at least one year in
activities and transactions on a significant scale. The territory of a country consists of thegeographic space administered by a national government within which persons, goods andcapital circulate freely. It includes the airspace, territorial waters and so on under thejurisdiction of the country and also clearly demarcated areas of land located in other countries
which are used by government with the formal political agreement of the host country.
Examples are embassies, consulates, military bases and scientific stations. Similar areas
within its own borders used by foreign governments and international organisations whose
members are national states are excluded.

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The rest of the world

9

Social protection schemes
144

Social protection schemes have the same residence as the institutional units that manage
them.
This rule implies that Member States should report on social protection schemes which are run
by local offices of foreign insurance companies. By the same token, the Member State's
reports should exclude any social insurance schemes run by foreign branches or subsidiariesof that Member State's insurance companies.
Social protection schemes which are financed by means of development aid are considered tobe resident of the developing countries in which they operate.

Corporations
145

Corporations are resident in the country where they are engaged in the production of goods
and services on a significant scale, or where they own land or buildings located there.
When a corporation maintains a branch, office or production site in another country in order toengage in a significant level of production over a long period of time but without creating a
subsidiary corporation for that purpose, the branch, office or site is considered to be a resident
institutional unit of the country in which it is located.

General government
146

The legal entities established by political processes as having legislative, judicial or executive
authority over other institutional units are resident in the country in which they havejurisdiction. Social security funds and government non-profit institutions are resident in the
country where they are located.
International organisations whose members are national states, such as the European Unionor the North Atlantic Treaty Organisation, are not considered resident in any country, including
those in which they are located or conduct their affairs.

Households and individuals
147

Households are resident in the country where their principal common accommodation is
located. All individual members of a household have the same residence. If the members of ahousehold live in different countries for more than one year, that particular institutional
household is split into two or more households resident in different countries. The residence ofhouseholds and individuals is therefore not determined by nationality or legal status, but by
normal location.
Some specific rules are:cross-border workers are resident in the country in which their households have theirprincipal accommodation;



travellers, visitors and seasonal workers remain residents of their home country,
provided they return to that country within one year;

students remain residents of their country of origin however long they study abroad,provided they do not start a family in the host country;

employees of international organisations are residents of the country in which they are
expected to have their abode for one year or more;

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The rest of the worldon the other hand, military personnel, diplomats and other public servants whom agovernment posts abroad have the same residence as the employing government
however long they stay abroad in this capacity;

locally recruited staff of overseas military bases, embassies, consulates and so on are
residents of the country in which they live.

9

Non-profit institutions serving households
148

Non-profit institutions serving households are resident in the country under whose laws andregulations they were created and where their existence as a legal or social entity is officiallyrecognised and recorded. If a non-profit institution is engaged in charity or relief work on aninternational scale and maintains a branch for one year or more in a foreign country, thatbranch should be considered as a resident of the foreign country.

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Introduction

1

PART 2:
CLASSIFICATION OF BENEFITS IN THE
CORE SYSTEMESSPROS Manual and user guidelines — 2022 edition

54

Introduction

1

1

Introduction

Part 2 of the ESSPROS Manual (20) defines the various types of benefits classified by function ofsocial protection.
1A

This Part is intended as a guide for both collectors and users of the statistics. Collectors will be
guided, with the help of examples and detailed explanations, through the task of classifying
national benefits within a common European framework. Users will find information to assist
with comparative analysis of the data.

2

The great detail of types of benefits introduced with the present Part allows a better
understanding of the social protection systems in the Member States and permits the users of
the statistics to form groupings of benefits according to their analysis needs. Data can beanalysed by function of social protection, but also according to other criteria, for example bygrouping all the benefits paid in the transition from work to retirement. It can be said therefore
that, although this Manual groups benefits by function (that is, by their finality), the types ofbenefits have been defined in such a way that they can be easily regrouped according to othercriteria.
This introduces a great level of flexibility in the system. The user of the statistics, however,must be warned against carrying out cross-country comparisons at the level of single types ofbenefits. Such comparisons in fact can be very misleading, as the Member States may use
different types of benefits to fulfil the same objectives.
For this reason, it appears advisable to carry out cross-country comparisons at moreaggregated levels. The general classification of benefits presented in Part 1, chapter 7, which
distinguishes benefits in cash and benefits in kind, periodic benefits and benefits paid once
only (lump sums), as well as means-tested and non means-tested benefits, can be very
valuable. The tables presented in this part do not repeat these general classification
categories (except the distinction cash benefits - benefits in kind). The cross-classification of
all the benefit types presented in the Core of the ESSPROS is presented in the attachedESSPROS questionnaire (Appendix I).

3

Another aspect of flexibility introduced with the revised ESSPROS is the fact that the content
of this Part can be modified without affecting the general principles of the ESSPROS Coresystem set down in Part 1 if new types of benefits or new modes of social protection provision
emerge in the national systems.

(20) For a general description of the ESSPROS, see the introduction to Part 1 of the present Manual.

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Introduction

4

Social benefits either emerge from a purpose (wherefore?) or a reason (why?). Each function
has a definition of contents and there surely is an overlap between different functions forcertain benefits, e.g. a family or child component often exists, while benefits are granted for a
specific purpose either as a risk (unemployment) or need (old age). In these cases the more
specific function is generally preferred, e.g. unemployment instead of family/children.

5

In terms of the functional classification of benefits, the following general principles apply:all medical care is included in the Sickness/health care function, benefits in kind,irrespective of the reason why medical care is provided;no minimum or maximum age are used to define the concepts of old age in the Old age
function and of children in the Family/children functions. Therefore, data will reflect, to acertain extent, national practices.

6

An important concept to distinguish clearly between the old-age function and others is theconcept of a reference retirement age. Old age benefits are generally granted to beneficiaries
above the reference retirement age. Disability is then limited to the integration into theworkforce and early retirement benefits are only benefits paid to recipients below the reference
retirement age. The reference age is usually defined for each scheme separately according to
the standard retirement age set by the scheme, the legal retirement age of the country or, insome cases, the standard retirement age set by a scheme or schemes of reference. See §43
for further details.

7

The present Manual does not define a function for the event of occupational accidents anddiseases. Statistical data on this type of expenditure are not comparable, as they reflect thedefinition of occupational hazard adopted by each Member State in its own legislation andpractice. Furthermore, benefits provided in the event of occupational accidents or diseases
may range from sickness cash benefits to health care provision, from rehabilitation benefits todisability pensions. These benefits are covered by the functions in the Core system, where no
distinction is made as for the causes of sickness or disability.

1

However, where the risk of occupational accidents and diseases is covered by specificregulations, it is recommended to identify one or more separate schemes providing therelevant benefits. This ensures that information on the value of benefits as well as on theirfinancing will be available for those countries where specific regulations on protection against
occupational accidents and diseases exist.

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Social benefits in the Sickness/health care function

22

Social benefits in the
Sickness/health carefunction

2.1 Introduction
8

9

The Sickness/health care function covers:
cash benefits that replace in whole or in part loss of earnings during temporary inability
to work due to sickness or injury;

medical care provided in the framework of social protection to maintain, restore or
improve the health of the people protected.

The scope of cash benefits in this function is rather limited. Cash benefits that replace loss ofearnings during temporary inability to work in case of pregnancy or disability are recorded
under the Family/children or Disability functions respectively.
Benefits provided by employers in the form of continued payment of wages and salaries during
sickness are taken into account.

9A

When there are no administrative data on the value of these payments, estimates must be
based on other sources, such as labour cost surveys.

10

All medical care falls under this function irrespective of the need or risk against which it isprovided. For example, specific medical care provided to expectant mothers and disabled
persons is included here and not under the Family/children and Disability functions.
In particular, medical care covers the following goods and services used in prevention, cure or
rehabilitation:

11

Services: medical and paramedical services provided by general practitioners,
specialists and other health care personnel; laboratory tests and other examinations;dental care; physiotherapy; thermal cures; transport of sick people; preventive
treatment such as vaccinations; accommodation in the case of a stay in hospital orother medical institution. Medical services as defined here cover those provided outside
medical institutions as well as within.

Goods: pharmaceutical products; medical prosthesis (optical and acoustical aids;
orthopaedic; dental and other prosthesis); dressings and medical supplies.

Only preventive measures through which an individual benefit (for example, a medical checkup) is provided to a protected person or household fall under the Sickness function and ingeneral within the scope of ESSPROS. Preventive campaigns to alert the general public to

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Social benefits in the Sickness/health care function

2

health hazards (for example, smoking, alcohol or drug abuse) are not recorded by the
ESSPROS.
12

Health care provided within the frame of the work environment by the employer aimed at
guaranteeing safety at work or necessary for the production process of the enterprise is notincluded in the ESSPROS (see paragraph 26 of Part 1 of the Manual).

13

The way in which health care systems are organised varies considerably from one Member
State to another. Data relating to in-patient and out-patient health care are broken down into
directly provided benefits and reimbursements. A definition of the concepts of reimbursementand directly provided appears in paragraph 115, Part 1 of the Manual. Here below aredescribed more in detail the circumstances under which health care benefits should beconsidered as directly provided or as reimbursements.
There are three main patterns of health care provision:14



under the indirect system, the social protection scheme provides medical care benefits
for protected people by paying all or part of the cost of the medical care supplied by theproviders. The patient pays the medical bill, all or part of which is then reimbursed by
the social protection scheme. The benefits therefore take the form of reimbursements.



under the direct system, the institutional unit running the social protection scheme
owns, operates and controls the necessary medical facilities and employs the medical,
para-medical and administrative staff. In this system benefits are directly provided to theprotected people.

in an alternative pattern of provision, intermediate between the two above - known as
direct settlement system, the social protection scheme enters into a variety of contracts
or agreements with health care providers. The medical care is provided to thebeneficiary free or at the contractual rate (below its cost) by the providing unit (which is
not a social protection scheme). The providing unit is then reimbursed by the social
protection scheme. This type of benefit is also recorded as directly provided.

Cost sharing is an important aspect of health care provision. In these cases, the patient isrequired to meet part of the cost of medical treatment received. Various methods of costsharing exist in the Member States, for example:

the beneficiary pays either a fixed percentage of the cost of services and goods
received, or a flat rate contribution towards those goods and services;

there is a cost threshold below which medical costs must be borne by the protected
people (franchise levels);

there is a cost threshold above which medical costs must be borne by the protected
people;the patient must pay a fixed fee if he or she goes directly to a provider on a higher levelof care than the designated entry level, for example by consulting a specialist without
seeing a general practitioner first;



a defined range of goods or services is excluded from the social protection scheme.
The cost of these goods and services must be borne in full by the patient.

As the ESSPROS is intended to record the cost of social protection, and not the cost of total
medical care, any part of the full cost of medical care which is met by the beneficiary himself
under cost-sharing arrangements must be deducted from the value of the social benefit.

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Social benefits in the Sickness/health care function

2

Table A: Classification of benefits in the Sickness/health care Function
Cash benefits
Paid sick leave
Other cash benefits
Benefits in kind
In-patient health care
- Direct provision- Reimbursement
Out-patient health careof which: pharmaceutical products- Direct provision- Reimbursement
Other benefits in kind

2.2 Description of the types of benefit
2.2.1 CASH BENEFITS
15

Paid sick leave: flat-rate or earnings-related payments intended to compensate the protected
person in full or in part for the loss of earnings caused by temporary inability to work due tosickness or injury. These benefits may be paid by autonomous social protection schemes, butthey may also be provided by the employer in the form of continued payment of wages andsalaries during the period of sickness. For reasons of convenience, paid leave in case of
sickness or injury of a dependent family member (in most case a child) is also reported under
this heading.

16

Other cash benefits: miscellaneous payments made to the protected people in connection withsickness or injury. Examples are allowances for intensive care, special bonuses or allowances
for tuberculosis patients.

2.2.2 BENEFITS IN KIND
17

In-patient health care: medical care provided to protected people during a stay in hospital,
clinic, sanatorium, approved thermal therapy establishment or similar medical establishment,
including the cost of board and lodging. Normally, the patient must spend at least one night in
the establishment.

18

Out-patient health care: medical care provided to protected people in their homes (including
old peoples' homes), at the doctor's premises, or at the out-patient department of a hospital ora clinic.

19

Pharmaceutical products: a sub-category of out-patient care, consisting of all pharmaceuticalproducts prescribed, purchased or directly supplied for medical care; blood and plasma arealso reported under this heading.

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Social benefits in the Sickness/health care function

20

2

Other benefits in kind: help provided to sick or injured people, other than medical care, toassist them with daily tasks, such as home help or transport facilities.

2.3 Further guidance
20A Help for alcoholics and drug-addicts (other than medical care) is reported under the Social
exclusion n.e.c. function, not under the Sickness/health care function.
20B No distinction is made on the cause of the need for sickness/health care benefits. However,expenditure related to an occupational accident or disease should be identified in a separate
scheme where possible (see paragraph 7 in the Introduction).
20C Ministry of Health and local government authority budgets often include the category Public
Health. This may cover expenditure on a broad range of activities and commitments, many ofthem within the scope of social protection. For instance, medical care financed from publichealth budgets provided in public health centres must be reported under the Sickness/healthcare function.
However, some public health expenditure does not fall within the conventional definition ofsocial protection. For instance, preventive campaigns to alert the general public to healthhazards, and other health education and training activities, may come within a public healthbudget, but are not part of social protection.
20D When health care benefits are directly provided, it may be difficult to determine their value. For
further explanation, see paragraphs 123 through 127 of Part 1 on valuation.
20E As a result of technical progress, day care hospitalisation and hospitalisation at home are
becoming more widespread in the Member States.
Day care hospitalisation allows the provision of individual, intensive medical care during asingle day. Patients receive treatment for part of the day and for the rest of the day can remainin their usual environment. Day care covers, for instance, haemodialysis, small surgicaloperations and rehabilitation, and should not be confused with out-patient care normallyprovided by out-patient departments.
Hospitalisation at home is an alternative to conventional hospitalisation. It allows patients
whose condition does not justify removal to a hospital comparable in extent and intensity to thecare they would normally receive in hospital.
These forms of hospitalisation are intermediate between In-patient health care and Out-patient
health care, and it is recommended that they are recorded in the category In-patient healthcare, even if no night is spent in a medical establishment.

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3Social benefits in the
Disability function

3.1 Introduction
21

The Disability function covers benefits that:

provide an income to persons below reference retirement age as established in thereference scheme whose ability to work and earn is impaired beyond a minimum levellaid down by legislation by a physical or mental disability;

provide rehabilitation services specifically required by disabilities;

provide goods and services other than medical care to disabled people.

22

Disability is the full or partial inability to engage in economic activity or to lead a normal life due
to a physical or mental impairment that is likely to be either permanent or to persist beyond aminimum prescribed period.

23

Benefits excluded from the Disability Function are:

all medical care specific to disability, reported under the Sickness/health care function;

benefits provided to replace in whole or in part earnings during temporary incapacity towork due to sickness or injury, which is reported under the Sickness/health carefunction;

family allowances paid to recipients of disability benefits, which are reported under the
Family/children function;

benefits paid to the surviving dependants of disabled people, such as pensions andfuneral expenses, which are reported under the Survivors' function.

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Table B: Classification of benefits in the Disability Function
Cash benefits
Disability pension
Early retirement benefit due to reduced capacity to work
Care allowance
Economic integration of the handicapped
Other cash benefits
Benefits in kind
Accommodation
Assistance in carrying out daily tasks
Rehabilitation
Other benefits in kind

3.2 Description of the types of benefit
3.2.1 CASH BENEFITS
24

Disability Pension: periodic payments intended to maintain or support the income of someone
below the reference retirement age who suffers from a disability which impairs his or her ability
to work or earn beyond a minimum level laid down by legislation.

25

Early retirement in case of reduced capacity to work: periodic payments to persons formerly
active in the labour market (employed or not) who are below the reference retirement age but
retired due to a reduction in their ability to work stemming from a disability and are not obliged
to remain available for and seek work. These are paid in most cases to older persons andpayments normally cease when the beneficiary becomes entitled to an old age pension.

26

Care allowance: benefit paid to disabled people who need frequent or constant assistance tohelp them meet the extra costs of attendance (other than medical care). The benefit must not
be a reimbursement of certified expenditure, which would be classified as benefit in kind.

27

Economic integration of the handicapped: allowances paid to disabled people when they
undertake work adapted to their condition, normally in a sheltered workshop, or when they
undergo vocational training.

28

Other cash benefits: periodic and lump-sum payments not falling under the above headings,
such as occasional income support and so on. If it concerns a lump-sum, the benefit isnormally granted instead of a periodical disability pension, the beneficiaries usually only
having a low level of disability.

3.2.2
29

BENEFITS IN KIND
Accommodation: provision of lodging and possibly board to disabled people in appropriate
establishments.

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Assistance in carrying out daily tasks: practical help provided to disabled people to assist themwith daily tasks. Home help is included in this category, as well as the payment of anallowance to the person who looks after the disabled person.

31

Rehabilitation: provision of specific goods and services (other than medical care) andvocational training to further the occupational and social rehabilitation of disabled people.
These services may be provided in specialised institutions. Goods and services may beprovided by an employer, but if they are mainly to service the production process of theenterprise, they should not be included (see also paragraph 26, Part 1). Medical rehabilitation such as physiotherapy - is included in the Sickness/health care function.

32

Other benefits in kind: miscellaneous services and goods provided to disabled people toenable them to participate in leisure and cultural activities, or to travel and/or to participate incommunity life, including reduced prices, tariffs, fares, and so on granted to disabled people
expressly for social protection reasons.

3

3.3 Further guidance
32A Disability pensions, in contrast to early retirement benefits due to reduced capacity to work,
are not linked to a retirement of the disabled person. They are granted based on the extent ofa person’s disability and/or inability to work. Indeed, the expression "beyond a minimum levellaid down by legislation" used in this chapter implies significant differences among disability
arrangements in the Member States. For example, disability is often measured in terms ofinability to earn, assessed by comparison with standards, normally an average worker with thesame employment status, age, skill, or training as the disabled person. In some countries
there are additional criteria such as the possibility or not to get a paid job or social conditions
and the likelihood of deterioration or improvement.
32B Disability pensions and early retirement benefits due to reduced capacity to work can both bepaid to persons who have been deemed incapable of any work (i.e. 100% disabled) and whoare effectively out of the labour market. In the case of the former, provision is based primarilyon the extent of a person’s disability and/or inability to work. In the case of the latter, it derives
from a reduction in working capacity which results in being legally absolved of participating in
the labour market (e.g. removal of the need to remain either in work or available for andactively seeking work). For this reason, both categories of benefits are best analysed together.
32C No distinction is made on the cause of the disability, which may be congenital or the result of
an illness or accident during the victim's lifetime, including an occupational accident or
disease. However, expenditure related to disability caused by an occupational accident or
disease should be identified in a separate scheme where possible (see paragraph 7 in the
Introduction).
32D Where a disabled child is entitled to a cash disability benefit in his or her own right, irrespectiveof dependency, the corresponding benefit is reported under the Disability function. Legislation
may provide that higher rates of family allowance are paid to the family beneficiary if adependant is disabled (a child or a spouse for example). These disability supplements may
replace, in some cases, benefits paid directly to the disabled, and should therefore be
separated from the main benefit and included in the Disability function. Further guidance on
supplements is provided under §110H of Part I of the manual.

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32E In most Member States of the European Union the social protection functions Old age,
Disability, and Survivors are part of a coherent set of benefits which is sometimes instituted as
one system. This set of benefits is usually called the national pension system, even if thebenefits provided are not exclusively periodic payments. For reasons of comparability, and inorder to respect the principle of the functional classification of the ESSPROS, concerning theconcept of the reference retirement age, see paragraphs 43A to 43E in the Old age function.
32F In some countries (Germany, Luxembourg) a new branch of insurance has been establishedto protect people who were never, or are no longer, fully independent and therefore require
special care, regardless of the reasons for this need. In Austria, a long term care system has
been established (in 1993) that covers care-related additional expenditure in order to ensure
the necessary support and care for the people in need of care. The goal of these systems is to
give people who need special and long-term care the ability to run their own lives according totheir needs as independently as possible. Cash benefits are paid under these schemes.
Different scales of benefits are provided to reflect the level of care required. This benefit
should be included in the Care allowance category of the Disability or Old age functions,according to the age of the beneficiary (see paragraph above). However, if the scheme
provides for accommodation and care in a nursing home or for special assistance, the benefits
should be classified as benefits in kind in the relevant categories.
32G In some cases, higher rates of benefits are paid to the beneficiary if she/he has dependants (achild or a non-working spouse for example). These family/children supplements are paid either
in addition to or to replace the family allowance, and should therefore be separated from themain benefit and included in the Family/children function (along with family allowances).
Further guidance on supplements is provided under §110H of Part I of the manual.

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Social benefits in the Old age function

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4Social benefits in the Old
age function

4.1 Introduction
33

The Old age function covers the provision of social protection against the risks linked to oldage: loss of income, inadequate income, lack of independence in carrying out daily tasks,
reduced participation in social life, and so on. Medical care of the elderly is not taken into
account, as all health care expenditure is reported under the Sickness/health care function.
The Old age function covers benefits that:34

provide a replacement income when the aged person retires from the labour market;



guarantee a certain income when a person has reached a prescribed age;provide goods or services specifically required by the personal or social circumstancesof the elderly.

Benefits excluded from the Old age function are:

medical care specific to old age, which is reported under the Sickness/health carefunction;

family allowances for dependent children where the beneficiary is also in receipt of an
old age benefit; this is reported under the Family/children function.

early retirement benefits paid for labour market reasons or in case of reduced capacity
to work, which are reported under the functions Unemployment and Disability
respectively.

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Table C: Classification of benefits in the Old Age Function
Cash benefits
Old age pension
Anticipated old age pension
Partial pension
Care allowance
Other cash benefits
Benefits in kind
Accommodation
Assistance in carrying out daily tasks
Other benefits in kind

4.2 Description of the types of benefit
4.2.1 CASH BENEFITS
35

Old age pension: periodic payments intended to i) maintain the income of the beneficiary after
retirement from gainful employment at the reference age or ii) support the income of elderly
persons (excluding support of limited duration).

35A Concerning the concepts of old age and of reference retirement age, see paragraph 43 A to 43
E below.
36

Anticipated old age pension: periodic payments intended to maintain the income ofbeneficiaries who retire before the reference age as established in the relevant scheme. Thismay occur with or without a reduction of the normal pension.

36A The payment ceases when the beneficiary reaches the reference retirement age. Concerning
the concept of reference retirement age, see paragraphs 43 A to 43 E below.
37

Partial retirement pension: periodic payment of a portion of the full retirement pension to older
workers who continue to work but reduce their working hours or whose income from a
professional activity is below a set ceiling. The partial pension is converted into a full pension
and recorded under the item old age pension when the beneficiary retires completely or when
he or she ceases to earn professional income above the defined level.

38

Care allowance: benefit paid to old people who need frequent or constant assistance to help
them meet the extra costs of attendance (other than medical care). The benefit must not be areimbursement of certified expenditure, which would be classified as benefit in kind.

39

Other cash benefits: periodic or lump-sum benefits paid upon retirement or on account of old
age that do not fall under the above headings, such as capital sums paid to people who do not
fully meet the requirements for a periodic retirement pension, or who were members of ascheme designed to provide only capital sums at retirement.

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4.2.2 BENEFITS IN KIND
40

Accommodation: provision of lodging and sometimes board to retired people either in
specialised institutions (old people's homes, nursing homes) or staying with families. The
provision can be of temporary or indefinite duration.

41

Assistance in carrying out daily tasks: practical help provided to old people to assist them withdaily tasks. Home help is included in this category, as well as the payment of an allowance tothe person who looks after an elderly person.

42

Other benefits in kind: miscellaneous goods and services for retired people to enable them totake part in leisure and cultural activities, to travel and/or participate in community life. These
include reductions in prices, tariffs and fares for old age pensioners where they are expressly
granted for social protection.

4.2.3 REFERENCE RETIREMENT AGE FOR OLD AGE BENEFITS
43

The reference retirement age refers to the age at which the right to receive an old age pension(see § 35 of part 2) is granted (21). This is a fundamental concept for the definition of the Old
age function (see §33 of part 2).
Determining the reference retirement age for a scheme is not always straightforward and themethod used is liable to vary depending on how retirement ages are set in the national
pension system. In order to understand how this should be determined, first the following
definitions need to be laid out.
Legal retirement age: age at which old age pensions become payable according to thenational legislation.
Standard retirement age: age at which the pension provided by the scheme becomes payableaccording to the rules of the scheme (see § 44 of part 1).
Scheme(s) of reference: Important scheme(s) in the national pension system which can beconsidered representative of the system as a whole and for which there is either a single
standard retirement age or multiple standard retirement ages that can be used to define
representative retirement age(s) for the country as a whole.
The reference retirement age should be set according to the best available option from thefollowing list (in descending order of accuracy):Standard retirement age(s) set by the scheme
Generally applicable legal retirement age(s) in the country
Standard retirement age(s) set by the scheme of reference or combination of the standard
retirement ages set by the schemes of reference
Retirement age applied in national statistics. For example, this could be the age used indemographic statistics for identifying the start of the old aged cohort of the population (or theage at which people are no longer considered part of the working-age population).
Retirement age applied in international/European statistics. For example, European
demographic statistics currently use 65 to define the old aged cohort of the population (theage at which people are no longer considered part of the working-age population which isdefined as 20-64 in EU2020 indicators).

(19) The use of the term ‘retirement’ doesn't imply that the beneficiary must be retired from work to become entitled to an old age pension.

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The reference retirement age should never be set to the average observed retirement age as
this will be influenced by individuals who retire early or continue to work after becoming
eligible for retirement.

4.3 Further guidance
43A It is not always possible to establish a single legal/standard retirement age for each country.
There may be multiple legal/standard retirement ages when the law/scheme sets different
ages for different groups of individuals (i.e. according to sector of activity, occupation, genderand so on). In such cases a split using the reference age applicable to each group ofrecipients should be applied where possible. However, where this is not possible/practical, apragmatic solution may be applied, for example taking into account the various legal/standard
retirement ages and the distribution of recipients amongst the groups to which different ages
apply.
There may also be cases where a retirement age interval is defined instead of a single age, or
the retirement age is variable over the reference period. In such situations, a split according to
the specifically applicable retirement ages should be applied where possible. However, where
this is not possible/practical the retirement age to be applied can be set to a specific age(between the limits of the age interval or an appropriate average between the applicableretirement ages during the reference period) which is most representative of the nationalsituation.
Consequently, the breakdown between "old age pension" and "anticipated old age pension" isbased on accurately establishing a reference retirement age. As a result, the comparability ofdata between countries may be limited in some cases.
43B Anticipated old age pensions can be identified separately for each scheme:pensions paid to people who work in conditions which are regarded as particularly
arduous or unhealthy only fall under the item anticipated old age pension, if they retire
before the reference retirement age of their scheme. It has to be noted that thereference retirement age of these schemes are generally lower compared the otherstatutory pension schemes;seniority pensions, paid on condition that a prescribed number of contribution units has
been paid or that a defined period of insurance has been completed, fall under the item
Old age pension.

43C It is also possible to postpone retirement beyond reference retirement age, normally with anincrease in the value of the benefit. The additional amounts paid in case of late retirement
must be included under the item old age pension.
43D The old age function does not record all benefits granted in the transition from work toretirement. Some of these may result from social protection provisions other than those linked
to old age. Early retirement benefits, in particular, may be paid to older unemployed or
disabled workers. These benefits are reported in the Unemployment or Disability functions.
These rules underline again that the allocation of benefits to functions needs very careful
examination of the exact situations which give rise to payments.
43E In most Member States of the European Union the functions Old age, Disability, and Survivors
are part of a coherent set of benefits which is sometimes instituted as one system. This set of
benefits is usually called the national pension system, even where the benefits provided are

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not exclusively periodic payments. Depending on national legislation and practice, forexample, an old person may receive an old age pension, a disability pension or awidow/widower's pension. In some Member States (Germany for example) disability andsurvivors' pensions are converted into old age pensions at the reference retirement age. In
some other countries (e.g. Belgium), the disability/survivors benefit is stopped at the legal
pension age and the beneficiary enters the old age pension scheme. In other countries(Ireland, Bulgaria, Hungary and Slovakia for example), however, this is not the case. For
reasons of comparability, and in order to respect the principle of the functional classification of
the ESSPROS, disability pensions paid to beneficiaries over the reference retirement age as
established in the reference scheme must be recorded under the item old age pension. The
reason for receiving a disability pension after the reference retirement age is connected to old
age rather than to the impairment of his or her ability to work. In contrast and with regard to theimportance of the functional classification, survivors’ pensions remain under the survivorsfunction. In order to contribute to the aim of comparability, survivors’ pensions to pensioners
above the defined reference retirement age are recorded as optional data. In any case, whenanalysing the data, it is recommended to take into account that a strong interdependence
exists among the three functions: old age, disability and survivors.
43F In some cases, higher rates of benefits are paid to the beneficiary if she/he has dependants (achild or a non-working spouse for example). These family/children supplements are paid either
in addition to or to replace the family allowance, and should therefore be separated from themain benefit and included in the Family/children function (along with family allowances).
Further guidance on supplements is provided under §110H of Part I of the manual.

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Social benefits in the Survivors' function

55Social benefits in theSurvivors' function

5.1 Introduction
44

The Survivors' function includes benefits that:

provide a temporary or permanent income to people who have suffered from the loss ofthe spouse or a next-of-kin, usually when the latter represented the main breadwinner
for the beneficiary;compensate survivors for funeral costs for any hardship caused by the death of a family
member;

provide goods and services to eligible survivors.

Survivors eligible for benefit may be the spouse or ex-spouse of the deceased person, his or
her children, grandchildren, parents or other relatives. In some cases, the benefit may also be
paid to someone outside the family.
45

Benefits excluded from the Survivors' function are:
46

family allowances for dependent children where the beneficiary is receiving a survivor's
benefit; these are reported under the Family/children function.

A survivor's benefit is normally granted on the basis of a derived right, that is, a right originallybelonging to another person whose death is a condition for granting the benefit. However,some social protection schemes treat this right as a direct one, that is, there is no connection
between the survivor's benefit received and any benefit that the deceased would have beenable to claim.
Table D: Classification of benefits in the Survivors Function
Cash benefits
Survivors' pension
Death grant
Other cash benefits
Benefits in kind
Funeral expenses
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5.2 Description of the types of benefit
5.2.1 CASH BENEFITS
47

Survivors' pension: periodic payments to people whose entitlement derives from theirrelationship with a deceased person protected by the scheme (widows, widowers, orphansand similar).

48

Death grant: single payment to someone whose entitlement derives from their relationship witha deceased person (widows, widowers, orphans and similar).

49

Other cash benefits: other periodic or lump-sum payments made by virtue of a derived right ofa survivor.

5.2.2 BENEFITS IN KIND
50

Funeral expenses: sums paid towards the cost of the funeral, burial (or other arrangement) ofa deceased person protected by the scheme. This benefit is granted, as a rule, to the persons
who bear those costs.

51

Other benefits in kind: miscellaneous goods and services provided to survivors to enable themto take part in community life; these include reductions in prices, tariffs, fares and so on for
widows, widowers, and orphans if expressly granted for social protection.

5.3 Further guidance
51A In most Member States of the European Union the functions Old age, Disability, and Survivors
are part of a coherent set of benefits which is sometimes instituted as one system. This set of
benefits is usually called the national pension system, even where the benefits are not periodic
payments. For reasons of comparability, and in order to respect the principle of the functionalclassification of the ESSPROS, disability pensions paid after the reference retirement age as
established in the reference scheme must be recorded in the Old age function. In any case,when analysing the data it is recommended to take into account that a considerable
interdependence exists among these three functions (see also paragraphs 43A to 43E in the
Old age function).
In order to contribute to the aim of comparability, survivors’ pensions to pensioners above thedefined reference retirement age are recorded as optional data.

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6Social benefits in the
Family/Children function

6.1 Introduction
52

The Family/children Function includes benefits that:

provide financial support to households for bringing up children;provide financial assistance to people who support relatives other than children;provide social services specifically designed to assist and protect the family, particularly
children.

Table E: Classification of benefits in the Family/children Function
Cash benefits
Income maintenance benefit in the event of childbirth
Birth grantParental leave benefit
Family or child allowance
Other cash benefits
Benefits in kindChild day care
Accommodation
Home help
Other benefits in kind

6.2 Description of the types of benefit
6.2.1 CASH BENEFITS
53

Income maintenance benefit in the event of childbirth: flat-rate or earnings-related payments
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work in connection with childbirth for the period before and/or after confinement or inconnection with adoption. The benefit may also be paid to the father.
These benefits may be paid by autonomous social protection schemes, but they are also
provided by employers in the form of continued payment of wages and salaries during
absence from work. When there are no administrative data on the value of these payments,
estimates must be based on other sources, such as labour cost surveys.
54

Birth grant: benefits normally paid as a lump sum or by instalments in case of childbirth or
adoption.

55

Parental leave benefit: benefit paid to either mother or father in case of interruption of work or
reduction of working time in order to bring up a child, normally of young age.

56

Family or child allowance: periodical payments to a member of a household with dependent
children to help with the costs of raising children.

57

Other cash benefits: benefits paid independently of family allowances to support households
and help them meet specific costs, such as costs arising from the specific needs of lone parent
families or families with handicapped children. These benefits may be paid periodically or as a
lump-sum.

6.2.2 BENEFITS IN KIND
58

Child day care: shelter and board provided to pre-school children during the day or part of theday. The age limit for pre-school is defined by national legislation. Financial assistancetowards the payment of a nurse to look after children during the day is also included here.
Child day care services provided by the employer should not be taken into account, according
to paragraphs 24 to 27 of Part 1.

59

Accommodation: shelter and board provided to children and families on a permanent basis(such as in nursing homes and foster families).

60

Home help: goods and services provided at home to children and/or to those who care for
them.

61

Other benefits in kind: miscellaneous goods and services provided to families, young people orchildren (holiday and leisure centres), including reductions in prices, tariffs, fares and so on forchildren or large families, where expressly granted for social protection. This category also
includes family planning services.

6.3 Further guidance
61A The upper age limit for granting a benefit for dependent child (notably, family allowance) may
be related to the national compulsory school leaving age or the labour laws. The standard age
may be extended if the child continues in further education or vocational training oralternatively is he or she is handicapped or unemployed. These benefits are designed toprovide financial support to families for bringing up children, and not to help towards the costof education. Education benefits are in fact not included within the scope of the ESSPROS.

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61B Social policies in favour of families are organised through many programmes, some of which
go beyond the scope of the Family/children function or even beyond the scope of social
protection as it is defined in the Core of ESSPROS. Some examples follow:
some Member States grant tax allowances against gross income for children. The aim
is to redistribute income in favour of taxpayers with family commitments, but thesemethods are not within the scope of the Core of ESSPROS;

free or subsidised school meals, and assisted holidays may be part of a national
education programme, and are therefore outside the scope of social protection as
defined in the Core of ESSPROS (the Core does not cover the function Education).
However, where benefits are provided solely to indigent families, after a means-test, it
can be argued that the object of the measure is to redistribute income in favour of those
who have insufficient resources rather than to provide free access to education. Thesebenefits are therefore recorded under the Family/children function,

employers may provide special advantages to employees with children, such as holiday
homes, special bonuses and so on. According to paragraphs 24 to 27 of Part 1, theseadvantages are not considered social protection;

housing policies may make concessions for large families or lone parent families. Thesebenefits, however, are recorded under the Housing function.

61C The pre-school system is sometimes the responsibility of the Ministry of Education andsometimes not, and in several cases the youngest children may attend other pre-primaryschool facilities, such as day care centres or kindergarten. Concerning the pre-primaryeducation system, only the part of social protection benefits has to be recorded under the item
"child day care".
The computation of the social protection's share is not straightforward in all the countries;
when this is not directly derived from the financing sources (central and/or local government
accounts), an estimate should be provided.
In some countries, the total expenditure of the pre-primary system generated for children
below the age of attendance at pre-primary school is recorded: this is the case in countries
such as Latvia and Lithuania where also the youngest children aged 0-3 may be admitted tothe education system; for example, in Latvia (the pre-school system is the responsibility of the
Ministry of Education and the last two years of pre-primary education are compulsory) the
estimation of the government expenditure on child day care is done by calculating the per-childcost at kindergarten (dividing the total cost for kindergartens by the number of children at
kindergartens) and multiplying this number with the number of children aged 0-3.
In other countries, other relevant age limits are used, for example, when the age forcompulsory attendance does not coincide with the primary school age: Cyprus, for example,
considers the cost of the day care (provided by Municipalities) for children below the age of 4
years and 8 months (while the access age to pre-primary school is 3 years).
More complex is the estimation procedure in Sweden. The total cost of child day care is
obtained from the total cost for children in the pre-school system by subtracting the estimatedcost for time spent in pedagogic activities; this last one is obtained by evaluating thepercentage of children within the age limits that have a right to pedagogic programs (i.e.
children aged 3-6; note that also the youngest children aged 0-3 may be admitted to theeducation system under the responsibility of the Ministry of Education), and evaluating thehours with pedagogic activities as a percentage of the average yearly stay per child.
For the time being a few countries haven't been able to provide any estimation of the social
protection expenditure for children in the preschool system; an estimation should be provided
for all the cases (Czech Republic, Italy, Slovakia for example) in which the value is, in fact,
different from zero.

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7

Social benefits in the
Unemployment function

7.1 Introduction
62

The Unemployment Function includes benefits that:

replace in whole or in part income lost by a worker due to the loss of gainful
employment;

provide a subsistence (or better) income to persons entering or re-entering the labour
market;

compensate for the loss of earnings due to partial unemployment;replace in whole or in part income lost by an older worker who retires from gainful
employment before the reference retirement age because of job reductions for
economic reasons;contribute to the cost of training or re-training people looking for employment;help unemployed persons meet the cost of travelling or relocating to obtain
employment;

provide help and relief by providing appropriate goods and services.

63

Family allowances paid for dependent children to recipients of unemployment benefits arereported under the Family/children function, not under Unemployment.

64

A distinction currently applied to employment policies is between passive and active
measures. The former simply try to mitigate the disadvantages of unemployment, while thelatter aim to prevent unemployment or achieve shorter periods of unemployment.
The Unemployment function contains mainly passive measures (especially unemployment pay
and early retirement benefits), but also some active measures, such as benefits related totraining programmes.
In practice, the distinction between passive and active spending is not very practical from astatistical point of view. There are a number of measures which are hard to classify under one
category or the other. For example, vocational training may be provided to recipients of
unemployment benefits. Some partial early retirement benefits are conditional on the
recruitment of young unemployed people, combining the effects of active and passive
expenditure or making passive expenditure active.
Some active employment measures in Member States are not within the scope of social
protection in the Core system of ESSPROS, particularly expenditure that is not a direct
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7

transfers or the provision of goods and services (see paragraph 100, Part 1 of the Manual).
The main examples are wage subsidies, exemptions from paying employers' social
contributions and similar measures aimed at business with the purpose of combating
unemployment. A common characteristic of these measures is that they help both businessand the unemployed.

Table F: Classification of benefits in the Unemployment Function
Cash benefits
Full unemployment benefit
Partial unemployment benefit
Early retirement benefit for labour market reasons
Vocational training allowance
Redundancy compensation
Other cash benefits
Benefits in kind
Mobility and resettlement
Vocational training
Placement services and job-search assistance
Other benefits in kind

7.2 Description of the types of benefit
7.2.1 CASH BENEFITS
65

Full unemployment benefits: benefits compensating for loss of earnings where a person iscapable of working and available for work but is unable to find suitable employment, including
persons who had not previously been employed.

66

Partial unemployment benefits: benefits compensating for the loss of wage or salary due toformal short-time working arrangements, and/or intermittent work schedules, irrespective of
their cause (business recession or slow-down, breakdown of equipment, climatic conditions,accidents and so on), and where the employer/employee relationship continues.

67

Early retirement for labour market reasons: periodic payments to persons formerly active in thelabour market (employed or not) who are below the reference retirement age but retired due tounemployment or to job reduction caused by economic measures such as the restructuring of
an industrial sector or business and are not obliged to remain available for and seek work.
These are paid in most cases to older persons and payments normally cease when thebeneficiary becomes entitled to an old age pension.

67A Concerning the concept of the reference retirement age, see paragraphs 43 and 43A to 43E ofthis Part.
68

Vocational training allowance: payments by social security funds or public agencies to targetedgroups of persons in the labour force who take part in training schemes intended to develop
their potential for employment.

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Social protection benefits in the Unemployment function

69

Redundancy compensation: capital sums paid to employees who have been dismissed
through no fault of their own by an enterprise that is ceasing or cutting down its activities. This
benefit may be paid either directly by the employer or by a fund set up for the purpose.

70

Other cash benefits: other financial assistance, particularly payments to the long-term
unemployed, such as start-up incentives in the form of payment of unemployment benefit.

7

7.2.2 BENEFITS IN KIND
71

Mobility and resettlement: payments by social security funds or public agencies to unemployedpersons to encouraging them change to another locality or their occupation in order to seek or
to obtain work.

72

Vocational training: payments made by social security funds or public agencies to institutions
which provide professional training to people without a job or at risk of losing their job shortly
to develop their potential for further employment.

73

Placement services and job-search assistance covers intermediation, information and career
guidance services provided by job-placement/employment agencies.

74

Other benefits in kind: benefits in kind not classified elsewhere, such as the provision ofaccommodation, food or clothes or similar assistance to unemployed persons and theirfamilies, including reduced prices, tariffs, fares and so on for unemployed persons where they
are expressly granted for social protection.

7.3 Further guidance
74A Schemes which provide minimum means of subsistence to people who are indigent,irrespective of cause are classified under the function Social exclusion not elsewhereclassified. However, when specific provisions are made for needy people who are out of work(for example, the "Grundsicherung für Arbeitssuchende" benefit in Germany) the expenditure
should be reported under the Unemployment function.
74B Vocational training is strictly defined and includes only those programmes aimed at the
unemployed or at workers at risk of losing their jobs, and financed by social security funds or
public agencies. It excludes expenditure by employers on staff training and re-training. This
type of training, which is in the interests of both employers and employees, is not within thescope of ESSPROS. Similarly, vocational training provided within the country's education
system, such as apprenticeships, is excluded, as ESSPROS does not include an education
function.
74C Concerning direct job creation (under the item "other cash benefits"), the situations wherethese payments were made for work done are to be excluded (since, in such cases, thepayments were remuneration and not social benefits).
74D

In some cases, higher rates of benefits are paid to the beneficiary if she/he has dependants (achild or a non-working spouse, for example). These family/children supplements are paid
either in addition to or to replace the family allowance, and should therefore be separated fromthe main benefit and included in the Family/children function (along with family allowances).
Further guidance on supplements is provided under §110H of Part I of the manual.

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88Social benefits in the
Housing function

8.1 Introduction
75

The Housing Function is made up of interventions by public authorities to help households
meet the cost of housing. Housing policies are widespread in the Member States and their
purpose often goes beyond that of social protection: they may be aimed at encouraging thebuilding industry, ownership of dwellings, saving and so on. These wider measures are notwithin the scope of ESSPROS.
An essential criterion for defining the scope of the Housing function is the existence of aqualifying means-test for the benefit.

76

In some cases, housing benefits are paid in cash as a supplement to other benefits (e.g. oldage pensions or minimum guaranteed income benefits). These supplements are paid to help
households meet the cost of housing. Indeed, housing is considered, by definition, a certified
expenditure (see paragraph 115 of Part 1 of the Manual). These should therefore be
separated from the main benefit and included in the Housing function as benefits in kind.
Further guidance on supplements is provided under §110H of Part 1 of the manual.
Table G: Classification of benefits in the Housing Function
Benefits in kind
Rent benefitof which: Social Housing
Benefit to owner-occupiers

8.2 Description of the types of benefit
8.2.1 BENEFITS IN KIND
77

Rent benefit: a current means-tested transfer granted by a public authority to tenants,
temporarily or on a long-term basis, to help with rent costs.

78

Social housing: sub-category of rent benefit. Loss of rental income due to the current
imposition of non-commercial rents (that is, rents below the normal market price) by publicbodies or private non-profit institutions that own low-cost or social housing. The assignment of

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Social protection benefits in the Housing function

8

housing at non-commercial rents must be determined by a test on the households' income
and/or wealth.
79

Benefit to owner-occupiers: a means-tested transfer by a public authority to owner-occupiers
to alleviate their current housing costs. In practice this often relates to help with paying
mortgages and/or interest. All capital transfers (in particular investment grants) are excluded.

8.3 Further guidance
79A In certain countries, housing allowances may be administratively incorporated in family
benefits or benefits providing for a minimum subsistence income. They should still be reported
separately under the Housing function.
79B In principle, social housing benefit should be calculated as the difference between thetheoretical commercial rent and the actual rent paid by the tenant. However, this is difficult toestimate, because commercial rent depends on many factors, such as location of the social
housing unit, year of construction, type of contract and so on. As a practical alternative, thevalue of the benefit can be estimated on the basis of the government's contributions to thescheme concerned. Further instructions can be found in paragraph 127, Part 1 of the Manual.
79C Housing benefits may be provided through the fiscal system using tax breaks. These
measures are not included in the ESSPROS Core system unless they take the form of payabletax credits. As housing is considered a reimbursement for a certified expenditure (seeparagraph 76) any payable tax credits that meet the risk/need of housing are to be classified
as benefits in kind (see paragraph 112ter of Part 1).

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99Social benefits in thefunction Social exclusion
not elsewhere classified

9.1 Introduction
80

The need or risk against which social protection benefits are provided in this area is not easily
defined. The concept of social exclusion is multidimensional: it refers firstly to an insufficientlevel of income (poverty), but also to precarious situations in the field of health, education andemployment.
It follows that the content of this function, or rather group of benefits, is fairly heterogeneous.
However, the borderlines of this function are traced by the definition of social protection itself
in chapter 2 of Part 1, and by the following principles:small-scale, informal and incidental types of support that do not require regularmanagement and accounting are conventionally excluded from the scope of
ESSPROS. This is the case, for example, of whip-rounds, Christmas collections, ad-hoc
humanitarian aid and emergency relief in the event of natural disasters;

all social benefits related to a risk or need for which ESSPROS defines a specificfunction are reported under that function. For example, all non-contributory and meanstested public schemes providing a minimum entitlement in the case of old age, disability
or unemployment must be incorporated in the corresponding functions and not under
the present function. The residual character of this function may lead to differences incover among Member States depending on the main system of social protection they
apply;



while the other functions refer to people subject to clearly identifiable risks or needs (theelderly, the disabled, the unemployed and so on), this function refers to the "sociallyexcluded" or to "those at risk of social exclusion". General as this is, target groups may
be identified (among others) as destitute people, migrants, refugees, drug or alcohol
addicts, victims of criminal violence

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Social benefits in the function Social exclusion not elsewhere classified

9

Table H: Classification of benefits in the function Social exclusion n.e.c.
Cash benefits
Income support
Other cash benefits
Benefits in kind
Accommodation
Rehabilitation of alcohol and drug abusers
Other benefits in kind

9.2 Description of the types of benefit
9.2.1 CASH BENEFITS
81

Income support: periodic payments to people with insufficient resources. Conditions forentitlement may be related not only to the personal resources but also to nationality,
residence, age, availability for work and family status. The benefit may have a limited or an
unlimited duration; it may be paid to the individual or to the family, and provided by central or
local government.

82

Other cash benefit: support for destitute and vulnerable persons to help alleviate poverty or
assist in difficult situations. These benefits may be paid by private non-profit organisations.

9.2.2 BENEFITS IN KIND
83

Accommodation: shelter and board provided to destitute or vulnerable people, where these
services cannot be classified under another function. This may be short term in reception
centres, shelters and so on or on a more regular basis in special institutions, boarding houses,
reception families and so on.

84

Rehabilitation of alcohol and drug abusers: treatment of alcohol and drug dependency aimed
at reconstructing the social life of the abusers, making them able to live an independent life.
The treatment is usually provided in reception centres or special institutions.

85

Other benefits in kind: basic services and goods to help vulnerable people, such as
counselling, day shelter, help with carrying out daily tasks, food, clothing, fuel, etc... Legal aid
provided with a means-test is also included.

9.3 Further guidance
85A Benefits for the poor are normally means-tested and the concept of insufficient resources isdetermined according to standards laid down by the resident public authorities. However, not
all the benefits included in this function require a means-test. Sometimes, the absence ofadequate resources is implicit, in the case of refugees for example. Other times, the benefits
are provided regardless of the financial situation of the beneficiary, such as in the case of drug
addicts. Therefore, there is only partial overlapping with the category means-tested benefits

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9

defined in paragraphs 116, 117, 117A to 117C 117bis, 117ter of Part 1 of the Manual. If, on
the one hand, some benefits targeted at indigent households are included in other functions(when they are aimed at specific categories of the population such as the elderly or theunemployed), on the other hand not all the benefits belonging to this function will be targeted
at indigent households.
85B Income support benefits are typically means-tested, that is, paid to households or individuals
whose resources fall below a prescribed level. In-work benefits paid to those in low-paid jobs
in order to raise disposable income without creating disincentives to work are included under
this heading.
Examples of Income support benefits are the Revenu d'intégration or Leefloon in Belgium, theRevenu Minimum d'Insertion (RMI) in France, and parts of Income Support in the United
Kingdom.
85C The United Kingdom Income Support program includes the possibility of a loan from the Social
Fund. Loans are not social benefits (they are financial transactions), so neither the capitalsums nor repayments are recorded in the Core system.
However, if the loan is interest-free or at an interest rate well below the current market rate,
the benefit to the debtor, which should be valued at the amount of interest waived by the social
protection scheme, qualifies as a social benefit.
Cancellation of debt with the scheme's consent is also classified as a social benefit in
ESSPROS, however simple recognition by the scheme that a financial claim on a debtor
household can no longer be collected due to bankruptcy or similar circumstance does not
qualify as a social benefit.
85D In some cases, higher rates of benefits are paid to the beneficiary if she/he has dependants (achild or a non-working spouse, for example). These family/children supplements are paid
either in addition to or to replace the family allowance, and should therefore be separated fromthe main benefit and included in the Family/children function (along with family allowances).
Further guidance on supplements is provided under §110H of Part I of the manual.
85E Schemes which provide minimum means of subsistence to people who are indigent,irrespective of cause are classified under the function Social exclusion not elsewhereclassified. However, when specific provisions are made, for instance, to needy people who arebeyond pensionable age, the expenditures should be reported under the function Old age in
the item "Other cash benefits" (for example the "Äldreförsörjningsstöd" benefit in Sweden).

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APPENDIX II: Qualitative information by scheme and detailed benefit

Appendices

APPENDIX I: The ESSPROS questionnaire detailed classification ............................ 80
APPENDIX II: Qualitative information by scheme and detailed benefit ...................... 108
APPENDIX III: Methodology of the module on pension beneficiaries ........................ 113
APPENDIX IV: Methodology of the module on net social protection benefits(restricted approach) ................................................................................................ 143
APPENDIX V: Differences between the ESSPROS and the national accounts(ESA 2010) ............................................................................................................... 151
APPENDIX VI: The classification of various government disbursements .................. 154
APPENDIX VII: The treatment of taxes and social contributions payable on benefits 157

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APPENDIX I: The ESSPROS questionnaire detailed classification

APPENDIX I:
The ESSPROS questionnaire detailed
classification
1 Receipts (compulsory data)
1.1 SOCIAL CONTRIBUTION
CodeDescription

2000000

Total receipts

2100000
2110000
2110100

Social contributions
Employers' social contributions
Actual employers' social contributions

2110101

Sector of origin: Corporations

2110102
2110103

Sector of origin: Central government
Sector of origin: State and local government

2110104

Sector of origin: Social security funds

2110105

Sector of origin: Households

2110106
2110107

Sector of origin: Non-profit institutions serving households
Sector of origin: Rest of the World

2110200

Imputed social contributions

2110201

Sector of origin: Corporations

21102022110203

Sector of origin: Central government
Sector of origin: State and local government

2110204

Sector of origin: Social security funds

2110205

Sector of origin: Households

2110206
2110207

Sector of origin: Non-profit institutions serving households
Sector of origin: Rest of the World

2120000
2121000
2121005
21210072122000
212200521220072123000

Social contributions by the protected persons
Employees
Sector of origin: Households
Sector of origin: Rest of the World
Self-employed
Sector of origin: Households
Sector of origin: Rest of the World
Pensioners and other2123005

Sector of origin: Households

2123007

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APPENDIX I: The ESSPROS questionnaire detailed classification

1.2 GENERAL GOVERNMENT CONTRIBUTIONS AND OTHER RECEIPTS
Code
2200000

Description
General government contributions

2210000

Earmarked taxes

2210002

Sector of origin: Central government

22100032210004

Sector of origin: State and local government
Sector of origin: Social security funds

2220000

General revenue

2220002

Sector of origin: Central government

22200032220004

Sector of origin: State and local government
Sector of origin: Social security funds

2300000
2310000
2310005
23100072320000
2400000
2410000
2410001

Transfers from other schemes
Social contributions rerouted from other schemes
Sector of origin: Households
Sector of origin: Rest of the World
Other transfers from other resident schemes
Other receipts
Property income
Sector of origin: Corporations

2410002

Sector of origin: Central government

2410003

Sector of origin: State and local government

2410004
2410005

Sector of origin: Social security funds
Sector of origin: Households

2410006

Sector of origin: Non-profit institutions serving households

2410007

Sector of origin: Rest of the World

2420000
2420001

Other
Sector of origin: Corporations

2420002

Sector of origin: Central government

2420003

Sector of origin: State and local government

2420004
2420005

Sector of origin: Social security funds
Sector of origin: Households

2420006

Sector of origin: Non-profit institutions serving households

2420007

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APPENDIX I: The ESSPROS questionnaire detailed classification

2 Expenditure
2.1 COMPULSORY DATA
CodeDescription

1000000

Total expenditures

1100000
1101000
1101100
110111011011201101200
1102000
1102100
110211011021201102200

Social protection benefits
Social protection benefits non means-tested
Cash benefits non means-tested
Periodic cash benefits non means-tested
Lump sum cash benefits non means-tested
Benefits in kind non means-tested
Social protection benefits means-tested
Cash benefits means-tested
Periodic cash benefits means-tested
Lump sum cash benefits means-tested
Benefits in kind means-tested

1200000

Administration costs

1300000
1310000

Transfers to other schemes
Social contributions rerouted to other schemes

1310001

Social contributions rerouted paid on sickness/health care benefits

1310002

Social contributions rerouted paid on disability benefits

13100031310004

Social contributions rerouted paid on old age benefits
Social contributions rerouted paid on survivors benefits

1310005

Social contributions rerouted paid on family/children benefits

1310006

Social contributions rerouted paid on unemployment benefits

1310007
1310008

Social contributions rerouted paid on housing benefits
Social contributions rerouted paid on social exclusion n.e.c. benefits

1320000
1400000
1410000
1420000

Other transfers to other resident schemes
Other expenditure
Property income
Other

2.2 OPTIONAL DATA: BREAKDOWN BETWEEN RESIDENTS AND NONRESIDENTS
CodeDescription

11000009

Social protection benefits split by residence

1100010Social protection benefits granted to resident households

11000201100021Social protection benefits granted to non-resident households
Social protection benefits granted to residents of the EU

110002214000009
1400001
1400002

Social protection benefits granted to residents of other countries
Other expenditure split by residence
Other expenditure to resident units
Other expenditure to non-resident units

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APPENDIX I: The ESSPROS questionnaire detailed classification

3 Detailed benefits by function
3.1 COMPULSORY DATA
3.1.1 SICKNESS/HEALTH CARE FUNCTION
Code

Description

1110000

Social protection benefits

1111000

Social protection benefits non means-tested

1111100
1111110

Cash benefits non means-tested
Periodic cash benefits non means-tested

1111111

Paid sick leave non means-tested

1111112

Other cash periodic benefits non means-tested

111112011111211111200
1111210111121111112121111220

Lump sum cash benefits non means-tested
Other cash lump sum benefits non means-tested
Benefits in kind non means-tested
In-patient care non means-tested
Direct provision non means-tested
Reimbursement non means-tested
Out-patient care non means-tested

1111221

Direct provision of pharmaceutical products non means-tested

11112221111223

Other direct provision non means-tested
Reimbursement of pharmaceutical products non means-tested

1111224

Other reimbursement non means-tested

11112301112000
1112100
111211011121111112112111212011121211112200

Other benefits in kind non means-tested
Social protection benefits means-tested
Cash benefits means-tested
Periodic cash benefits means-tested
Paid sick leave means-tested
Other cash periodic benefits means-tested
Lump sum cash benefits means-tested
Other cash lump sum benefits means-tested
Benefits in kind means-tested

11122101112211In-patient care means-tested
Direct provision means-tested

1112212

Reimbursement means-tested

1112220

Out-patient care means-tested

11122211112222

Direct provision of pharmaceutical products means-tested
Other direct provision means-tested

1112223

Reimbursement of pharmaceutical products means-tested

1112224

Other reimbursement means-tested

1112230

Other benefits in kind means-tested

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APPENDIX I: The ESSPROS questionnaire detailed classification

3.1.2 DISABILITY FUNCTION
Code1120000

Description
Social protection benefits

1121000

Social protection benefits non means-tested

1121100
11211101121111

Cash benefits non means-tested

1121113

Periodic cash benefits non means-tested
Disability pension non means-tested
Early retirement benefit due to reduced capacity to work non meanstested
Care allowance non means-tested

1121114

Economic integration of the handicapped non means-tested

1121115

Other cash periodic benefits non means-tested

112111211211201121121

Lump sum cash benefits non means-tested
Care allowance non means-tested

1121122

Economic integration of the handicapped non means-tested

1121123

Other cash periodic benefits non means-tested

1121200
1121201

Benefits in kind non means-tested
Accommodation non means-tested

1121202

Assistance in carrying out daily tasks non means-tested

1121203

Rehabilitation non means-tested

1121204

Other benefits in kind non means-tested
Social protection benefits means-tested

1122000
1122100
1122110

Cash benefits means-tested
Periodic cash benefits means-tested

11221111122112Disability pension means-tested
Early retirement benefit due to reduced capacity to work means-tested

1122113

Care allowance means-tested

1122114

Economic integration of the handicapped means-tested

11221151122120

Other cash periodic benefits means-tested
Lump sum cash benefits means-tested

1122121

Care allowance means-tested

1122122

Economic integration of the handicapped means-tested

11221231122200

Other cash periodic benefits means-tested
Benefits in kind means-tested

1122201

Accommodation means-tested

1122202

Assistance in carrying out daily tasks means-tested

11222031122204

Rehabilitation means-tested
Other benefits in kind means-tested

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APPENDIX I: The ESSPROS questionnaire detailed classification

3.1.3 OLD AGE FUNCTION
Code

Description

1130000

Social protection benefits

1131000

Social protection benefits non means-tested

1131100
1131110

Cash benefits non means-tested
Periodic cash benefits non means-tested

1131111Old-age pension non means-tested

1131112

Anticipated old age pension non means-tested

11311131131114

Partial pension non means-tested
Care allowance non means-tested

1131115

Other cash periodic benefits non means-tested

113112011311211131200

Lump sum cash benefits non means-tested
Other cash lump sum benefits non means-tested
Benefits in kind non means-tested

1131201

Accommodation non means -tested

1131202

Assistance in carrying out daily tasks non means-tested

1131203

Other benefits in kind non means-tested
Social protection benefits means-tested

1132000
1132100
1132110

Cash benefits means-tested
Periodic cash benefits means-tested

11321111132112Old-age pension means-tested
Anticipated old age pension means-tested

1132113

Partial pension means-tested

1132114

Care allowance means-tested

1132115113212011321211132200

Other cash periodic benefits means-tested
Lump sum cash benefits means-tested
Other cash lump sum benefits means-tested
Benefits in kind means-tested

1132201
1132202

Accommodation means-tested
Assistance in carrying out daily tasks means-tested

1132203

Other benefits in kind means-tested

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APPENDIX I: The ESSPROS questionnaire detailed classification

3.1.4 SURVIVORS' FUNCTION
Code

Description

1140000

Social protection benefits

1141000

Social protection benefits non means-tested

1141100
1141110

Cash benefits non means-tested
Periodic cash benefits non means-tested

1141111

Survivors’ pension non means-tested

1141112

Other cash periodic benefits non means-tested

1141120114112111411221141200
1141201
11412021142000

Lump sum cash benefits non means-tested
Death grant non means-tested
Other cash lump sum benefits non means-tested
Benefits in kind non means-tested
Funeral expenses non means-tested
Other benefits in kind non means-tested
Social protection benefits means-tested

1142100
1142110114211111421121142120114212111421221142200

Cash benefits means-tested
Periodic cash benefits means-tested
Survivors’ pension means-tested
Other cash periodic benefits means-tested
Lump sum cash benefits means-tested
Death grant means-tested
Other cash lump sum benefits means-tested
Benefits in kind means-tested

1142201

Funeral expenses means-tested

1142202

Other benefits in kind means-tested

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APPENDIX I: The ESSPROS questionnaire detailed classification

3.1.5 FAMILY/CHILDREN FUNCTION
Code
1150000

Description
Social protection benefits

1151000

Social protection benefits non means-tested

1151100
11511101151111

Cash benefits non means-tested
Periodic cash benefits non means-tested
Income maintenance in the event of childbirth non means-tested

1151112

Parental leave benefit non means-tested

1151113

Family or child allowance non means-tested

11511141151120

Other cash periodic benefits non means-tested
Lump sum cash benefits non means-tested

1151121Birth grant non means-tested

1151122

Parental leave benefit non means-tested

1151123
1151200

Other cash lump sum benefits non means-tested
Benefits in kind non means-tested

1151201

Child day care non means-tested

1151202

Accommodation non means-tested

1151203
1151204

Home help non means-tested
Other benefits in kind non means-tested

1152000

Social protection benefits means-tested

1152100
11521101152111

Cash benefits means-tested
Periodic cash benefits means-tested
Income maintenance in the event of childbirth means-tested

1152112

Parental leave benefit means-tested

1152113

Family or child allowance means-tested

11521141152120

Other cash periodic benefits means-tested
Lump sum cash benefits means-tested

1152121Birth grant means-tested

1152122

Parental leave benefit means-tested

1152123
1152200

Other cash lump sum benefits means-tested
Benefits in kind means-tested

1152201

Child day care means-tested

1152202

Accommodation means-tested

1152203
1152204

Home help means-tested
Other benefits in kind means-tested

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APPENDIX I: The ESSPROS questionnaire detailed classification

3.1.6 UNEMPLOYMENT FUNCTION
Code1160000

Description
Social protection benefits

1161000

Social protection benefits non means-tested

1161100
11611101161111

Cash benefits non means-tested
Periodic cash benefits non means-tested
Full unemployment benefit non means-tested

1161112

Partial unemployment benefit non means-tested

1161113

Early retirement benefit for labour market reasons non means-tested

11611141161115

Vocational training allowance non means-tested
Other cash periodic benefits non means-tested

1161120

Lump sum cash benefits non means-tested

1161121

Vocational training allowance non means-tested

11611221161123

Redundancy compensation non means-tested
Other cash lump sum benefits non means-tested

1161200

Benefits in kind non means-tested

1161201

Mobility and resettlement non means-tested

1161202
1161203

Vocational training non means-tested
Placement services and job-search assistance non means-tested

1161204

Other benefits in kind non means-tested

1162000

Social protection benefits means-tested

1162100
1162110

Cash benefits means-tested
Periodic cash benefits means-tested

1162111

Full unemployment benefit means-tested

1162112

Partial unemployment benefit means-tested

11621131162114

Early retirement benefit for labour market reasons means-tested
Vocational training allowance means-tested

1162115

Other cash periodic benefits means-tested

1162120

Lump sum cash benefits means-tested

11621211162122

Vocational training allowance means-tested
Redundancy compensation means-tested

1162123

Other cash lump sum benefits means-tested

1162200

Benefits in kind means-tested

1162201
1162202

Mobility and resettlement means-tested
Vocational training means-tested

1162203

Placement services and job-search assistance means-tested

1162204

Other benefits in kind means-tested

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APPENDIX I: The ESSPROS questionnaire detailed classification

3.1.7 HOUSING FUNCTION
Code
1170000

Description
Social protection benefits

1172000

Social protection benefits means-tested

1172200
1172210117221111722121172220

Benefits in kind means-tested
Rent benefits means-tested
Social housing means-tested
Other rent benefits means-tested
Benefit to owner-occupiers means-tested

3.1.8 SOCIAL EXCLUSION (N.E.C.) FUNCTION
Code

Description

1180000

Social protection benefits

1181000
1181100
118111011811111181112118112011811211181200

Social protection benefits non means-tested
Cash benefits non means-tested
Periodic cash benefits non means-tested
Income support non means-tested
Other cash periodic benefits non means-tested
Lump sum cash benefits non means-tested
Other cash lump sum benefits non means-tested
Benefits in kind non means-tested

1181201
1181202

Accommodation non means-tested
Rehabilitation of alcohol and drugs abusers non means-tested

1181203

Other benefits in kind non means-tested

1182000

Social protection benefits means-tested

1182100
1182110

Cash benefits means-tested
Periodic cash benefits means-tested

1182111

Income support means-tested

1182112

Other cash periodic benefits means-tested

118212011821211182200

Lump sum cash benefits means-tested
Other cash lump sum benefits means-tested
Benefits in kind means-tested

1182201

Accommodation means-tested

11822021182203

Rehabilitation of alcohol and drugs abusers means-tested
Other benefits in kind means-tested

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APPENDIX I: The ESSPROS questionnaire detailed classification

3.2 OPTIONAL DATASICKNESS/HEALTH CARE FUNCTION
3.2.1 Pay leave in the event of sickness or injury of a dependent family member (included in theitems "Paid sick leave" -1111111 and 1112111-)
Sickness / Health function
1111111
Paid sick leave non means-tested
11111119111211111121119

Pay leave in the event of sickness or injury of a dependent family member nonmeans-tested
Paid sick leave means-tested
Pay leave in the event of sickness or injury of a dependent family member
means-tested

DISABILITY, OLD AGE AND UNEMPLOYMENT FUNCTIONS
3.2.2 Supplement for dependent children
Disability function
1121111Disability pension non means-tested
11211119

Supplement for dependent children

112211111221119Disability pension means-tested
Supplement for dependent children

Old age function
1131111Old-age pension non means-tested
11311119
Supplement for dependent children
1131112

Anticipated old age pension non means-tested

11311129

Supplement for dependent children

113111311311139

Partial pension non means-tested
Supplement for dependent children

1132111Old-age pension means-tested

11321119

Supplement for dependent children

113211211321129

Anticipated old age pension means-tested
Supplement for dependent children

1132113

Partial pension means-tested

11321139

Supplement for dependent children

Unemployment function
1161111
Full unemployment benefit non means-tested
11611119

Supplement for dependent children

116111211611129

Partial unemployment benefit non means-tested
Supplement for dependent children

1162111

Full unemployment benefit means-tested

11621119116211211621129

Supplement for dependent children
Partial unemployment benefit means-tested
Supplement for dependent children

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APPENDIX I: The ESSPROS questionnaire detailed classification

SURVIVORS' FUNCTION
3.2.3 For the items 1141111 and 1142111 “Survivors’ pensions over the reference retirement
age”
Survivors' function
1141111
Survivors’ pension non means-tested
11411119114211111421119

Survivors’ pensions over the reference retirement age
Survivors’ pension means-tested
Survivors’ pensions over the reference retirement age

PAYABLE TAX CREDITS: CASH COMPONENT
3.2.4 For the items under which payable tax credits (PTCs) are reported (in full value) in themain section of the questionnaire, the cash component can be reported on a voluntary basis.
The following social benefits are currently used by countries to report data on PTCs(questionnaire used in 2016, to collect 2014 data).
If necessary, other codes can be introduced to the following list in the future, according to thenature of newly introduced PTCs.
PTC: cash component
11511131
Family or child allowance non means-tested:
PTC Cash component
11511211
Birth grant non means-tested:
PTC Cash component
11511231
Family/children
Other cash lump sum benefits non means-tested:
PTC Cash component
11521131
Family or child allowance means-tested:
PTC Cash component
11521231
Family/children
Other cash lump sum benefits means-tested:
PTC Cash component
11621111
Full unemployment benefit means-tested:
PTC Cash component
11722121
Other rent benefit means-tested:
PTC Cash component
11811111
Income support non means-tested:
PTC Cash component
11821211
Social Exclusion n.e.c.
Other cash periodic benefits means-tested:
PTC Cash component

ESSPROS Manual and user guidelines — 2022 edition

95

APPENDIX I: The ESSPROS questionnaire detailed classification

4A The ESSPROS questionnaire – 'Social Protection
Expenditure and Receipts'
Country name:

E
X
P
E
N
D
I
T
U
R
E
S

E
X
P
E
N
D
I
T
U
R
E
S

R
E
S
I
D
.

1000000
1100000
1101000
1101100
110111011011201101200
1102000
1102100
110211011021201102200
1200000
1300000
1310000
1310001
131000213100031310004
1310005
1310006
1310007
1310008
1320000
1400000
1410000
1420000

11000009
110001011000201100021110002214000009
1400001
1400002Year:

Currency: Millions national currency

Total expenditures
Social protection benefits
Non Means-tested
Cash benefits
Periodic
Lump sum
Benefits in kind
Means-tested
Cash benefits
Periodic
Lump sum
Benefits in kind
Administration costs
Transfers to other schemes
Social contributions rerouted to otherschemes
Sickness/Health care benefits
Disability benefits
Old age benefits
Survivors benefits
Family/Children benefits
Unemployment benefits
Housing benefits
Social exclusion n.e.c. benefits
Other transfers to other resident schemes
Other expenditure
Property income
Other

Social benefits split by residence
Granted to resident households
Granted to non-resident households
Residents of the EU
Residents of other countries
Other expenditure split by residence
To resident units
To non-resident units

ESSPROS Manual and user guidelines — 2022 editionAll
schemes
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Scheme
01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Scheme
…
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Scheme
n
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

0.00

0.00

0.00

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

0.00

0.00

0.00

0.00

0.00

0.00

All
schemes
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Scheme010.00

Scheme…
0.00

Scheme
n
0.00

0.00

0.00

0.00

0.00

0.00

0.00

96

APPENDIX I: The ESSPROS questionnaire detailed classification

R
E
C
E
I
P
T
S

R
E
C
E
I
P
T
S

R
E
C
E
I
P
T
S

2000000 Total receipts
2100000 Social contributions
2110000
Employers' social contributions
2110100
Actual2110101
Corporations
2110102
Central government
2110103
State and local government
2110104
Social security funds
2110105
Households
2110106
Non-profit institutions serving households
2110107
Rest of the World
2110200
Imputed2110201
Corporations
2110202
Central government
2110203
State and local government
2110204
Social security funds
2110205
Households
2110206
Non-profit institutions serving households
2110207
Rest of the World
2120000
Social contributions by the protected persons
2121000
Employees
2121005
Households
2121007
Rest of the World
2122000
Self-employed
2122005
Households
2122007
Rest of the World
2123000
Pensioners and other2123005
Households
2123007
Rest of the WorldESSPROS Manual and user guidelines — 2022 edition

All
Scheme Scheme Scheme
schemes
01
...
n
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

97

APPENDIX I: The ESSPROS questionnaire detailed classification

R
E
C
E
I
P
T
S

R
E
C
E
I
P
T
S

R
E
C
E
I
P
T
S

2200000
2210000
221000222100032210004
2220000
222000222200032220004
2300000
2310000
2310005
23100072320000
2400000
2410000
2410001
241000224100032410004
2410005
2410006
24100072420000
2420001242000224200032420004
2420005
2420006
2420007

All
Scheme Scheme Scheme
schemes
01...
nGeneral government contributions
0.00
0.00
0.00
0.00
Earmarked taxes
0.00
0.00
0.00
0.00
Central government
0.00
State and local government
0.00
Social security funds
0.00
General revenue
0.00
0.00
0.00
0.00
Central government
0.00
State and local government
0.00
Social security funds
0.00
Transfers from other schemes
0.00
0.00
0.00
0.00
Social contributions rerouted from other schemes
0.00
0.00
0.00
0.00
Households
0.00
Rest of the World
0.00
Other transfers from other resident schemes
0.00
Other receipts
0.00
0.00
0.00
0.00
Property income
0.00
0.00
0.00
0.00
Corporations
0.00
Central government
0.00
State and local government
0.00
Social security funds
0.00
Households
0.00
Non-profit institutions serving households
0.00
Rest of the World
0.00
Other
0.00
0.00
0.00
0.00
Corporations
0.00
Central government
0.00
State and local government
0.00
Social security funds
0.00
Households
0.00
Non-profit institutions serving households
0.00
Rest of the World
0.00

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98

APPENDIX I: The ESSPROS questionnaire detailed classification

S
I
C
K
N
E
S
S

H
E
A
L
T
H
/
C
A
R
E

S
I
C
K
N
E
S
S

1110000 Social protection benefits
1111000 Non Means-tested
1111100
Cash benefits
1111110Periodic
1111111
Paid sick leave
1111112
Other cash periodic benefits
1111120
Lump sum1111121
Other cash lump sum benefits
1111200
Benefits in kind
1111210In-patient care
1111211
Direct provision
1111212
Reimbursement
1111220
Out-patient care
1111221
Direct provision of pharmaceutical products
1111222
Other direct provision
1111223
reimbursement of pharmaceutical products
1111224
Other reimbursement
1111230
Other benefits in kind
1112000 Means-tested
1112100
Cash benefits
1112110Periodic
1112111
Paid sick leave
1112112
Other cash periodic benefits
1112120
Lump sum
1112121
Other cash lump sum benefits
1112200
Benefits in kind1112210In-patient care
1112211
Direct provision1112212
Reimbursement1112220
Out-patient care
1112221
Direct provision of pharmaceutical products
1112222
Other direct provision1112223
reimbursement of pharmaceutical products
1112224
Other reimbursement1112230
Other benefits in kindESSPROS Manual and user guidelines — 2022 edition

All
Scheme Scheme Scheme
schemes
01
...
n
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

99

APPENDIX I: The ESSPROS questionnaire detailed classification

D
I
S
A
B
I
L
I
T
Y

D
I
S
A
B
I
L
I
T
Y

D
I
S
A
B
I
L
I
T
Y

All
Scheme Scheme Scheme
schemes
01...
n1120000 Social protection benefits
0.00
0.00
0.00
0.00
1121000 Non Means-tested
0.00
0.00
0.00
0.00
1121100 Cash benefits
0.00
0.00
0.00
0.00
1121110Periodic
0.00
0.00
0.00
0.00
1121111Disability pension
0.00
1121112
Early retirement benefit due to reduced capacity to work
0.00
1121113
Care allowance
0.00
1121114
Economic integration of the handicapped
0.00
1121115
Other cash periodic benefits
0.00
1121120
Lump sum
0.00
0.00
0.00
0.00
1121121
Care allowance
0.00
1121122
Economic integration of the handicapped
0.00
1121123
Other cash lump sum benefits
0.00
1121200 Benefits in kind
0.00
0.00
0.00
0.00
1121201
Accommodation
0.00
1121202
Assistance in carrying out daily tasks
0.00
1121203
Rehabilitation
0.00
1121204
Other benefits in kind
0.00
1122000 Means-tested
0.00
0.00
0.00
0.00
1122100 Cash benefits
0.00
0.00
0.00
0.00
1122110Periodic
0.00
0.00
0.00
0.00
1122111Disability pension
0.00
1122112
Early retirement benefit due to reduced capacity to work
0.00
1122113
Care allowance
0.00
1122114
Economic integration of the handicapped
0.00
1122115
Other cash periodic benefits
0.00
1122120
Lump sum
0.00
0.00
0.00
0.00
1122121
Care allowance
0.00
1122122
Economic integration of the handicapped
0.00
1122123
Other cash lump sum benefits
0.00
1122200 Benefits in kind
0.00
0.00
0.00
0.00
1122201
Accommodation
0.00
1122202
Assistance in carrying out daily tasks
0.00
1122203
Rehabilitation
0.00
1122204
Other benefits in kind
0.00

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100APPENDIX I: The ESSPROS questionnaire detailed classification

O 1130000 Social protection benefits
L 1131000 Non Means-tested
D 1131100
Cash benefits
1131110Periodic
A 1131111
Old-age pension
G 1131112
anticipated old age pension
E 1131113
Partial pension
1131114
Care allowance
1131115
Other cash periodic benefits
1131120
Lump sum1131121
Other cash lump sum benefits
O 1131200
Benefits in kind
L 1131201
Accommodation
D 1131202
Assistance in carrying out daily tasks
1131203
Other benefits in kind
A 1132000 Means-tested
G 1132100
Cash benefits
E 1132110
Periodic
1132111Old-age pension
1132112
anticipated old age pension
1132113
Partial pension
1132114
Care allowance
O 1132115
Other cash periodic benefits
L 1132120
Lump sumD 1132121
Other cash lump sum benefits
1132200
Benefits in kind
A 1132201
Accommodation
G 1132202
Assistance in carrying out daily tasks
E 1132203
Other benefits in kindESSPROS Manual and user guidelines — 2022 edition

All
Scheme Scheme Scheme
schemes
01
...
n
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

101

APPENDIX I: The ESSPROS questionnaire detailed classification

S
U
R
V
I
V
O
R
S

S
U
R
V
I
V
O
R
S

1140000 Social protection benefits
1141000 Non Means-tested
1141100
Cash benefits
1141110Periodic
1141111
Survivors' pension
1141112
Other cash periodic benefits
1141120
Lump sum1141121
Death grant
1141122
Other cash lump sum benefits
1141200
Benefits in kind
1141201
Funeral expenses
1141202
Other benefits in kind
1142000 Means-tested
1142100
Cash benefits
1142110Periodic
1142111
Survivors' pension
1142112
Other cash periodic benefits
1142120
Lump sum
1142121
Death grant
1142122
Other cash lump sum benefits
1142200
Benefits in kind
1142201
Funeral expenses
1142202
Other benefits in kindESSPROS Manual and user guidelines — 2022 edition

All
Scheme Scheme Scheme
schemes
01
...
n
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

102

APPENDIX I: The ESSPROS questionnaire detailed classification

F
A
M
I
L
Y
/
C
H
I
L
D
R
E
N

F
A
M
I
L
Y
/
C
H
I
L
D
R
E
N

All
Scheme Scheme Scheme
schemes01...
n1150000 Social protection benefits
0.00
0.00
0.00
0.00
1151000 Non Means-tested
0.00
0.00
0.00
0.00
1151100 Cash benefits
0.00
0.00
0.00
0.00
1151110Periodic
0.00
0.00
0.00
0.00
1151111
Income maintenance in the event of childbirth
0.00
1151112
Parental leave benefit
0.00
1151113
Family or child allowance
0.00
1151114
Other cash periodic benefits
0.00
1151120
Lump sum
0.00
0.00
0.00
0.00
1151121Birth grant
0.00
1151122
Parental leave benefit
0.00
1151123
Other cash lump sum benefits
0.00
1151200 Benefits in kind
0.00
0.00
0.00
0.00
1151201
Child day care
0.00
1151202
Accommodation
0.00
1151203
Home help
0.00
1151204
Other benefits in kind
0.00
1152000 Means-tested
0.00
0.00
0.00
0.00
1152100 Cash benefits
0.00
0.00
0.00
0.00
1152110Periodic
0.00
0.00
0.00
0.00
1152111
Income maintenance in the event of childbirth
0.00
1152112
Parental leave benefit
0.00
1152113
Family or child allowance
0.00
1152114
Other cash periodic benefits
0.00
1152120
Lump sum
0.00
0.00
0.00
0.00
1152121Birth grant
0.00
1152122
Parental leave benefit
0.00
1152123
Other cash lump sum benefits
0.00
1152200 Benefits in kind
0.00
0.00
0.00
0.00
1152201
Child day care
0.00
1152202
Accommodation
0.00
1152203
Home help
0.00
1152204
Other benefits in kind
0.00

ESSPROS Manual and user guidelines — 2022 edition

103

APPENDIX I: The ESSPROS questionnaire detailed classification

U
N
E
M
P
L
O
Y
E
N
T

U
N
E
M
P
L
O
M
E
N
T

All
Scheme Scheme Scheme
schemes01...
n1160000 Social protection benefits
0.00
0.00
0.00
0.00
1161000 Non Means-tested
0.00
0.00
0.00
0.00
1161100 Cash benefits
0.00
0.00
0.00
0.00
1161110Periodic
0.00
0.00
0.00
0.00
1161111
Full unemployment benefit
0.00
1161112
Partial unemployment benefit
0.00
1161113
Early retirement benefit for labour market reasons
0.00
1161114
Vocational training allowance
0.00
1161115
Other cash periodic benefits
0.00
1161120
Lump sum
0.00
0.00
0.00
0.00
1161121
Vocational training allowance
0.00
1161122
Redundancy compensation
0.00
1161123
Other cash lump sum benefits
0.00
1161200 Benefits in kind
0.00
0.00
0.00
0.00
1161201
Mobility and resettlement
0.00
1161202
Vocational training
0.00
1161203
Placement services and job-search assistance
0.00
1161204
Other benefits in kind
0.00
1162000 Means-tested
0.00
0.00
0.00
0.00
1162100 Cash benefits
0.00
0.00
0.00
0.00
1162110Periodic
0.00
0.00
0.00
0.00
1162111
Full unemployment benefit
0.00
1162112
Partial unemployment benefit
0.00
1162113
Early retirement benefit for labour market reasons
0.00
1162114
Vocational training allowance
0.00
1162115
Other cash periodic benefits
0.00
1162120
Lump sum
0.00
0.00
0.00
0.00
1162121
Vocational training allowance
0.00
1162122
Redundancy compensation
0.00
1162123
Other cash lump sum benefits
0.00
1162200 Benefits in kind
0.00
0.00
0.00
0.00
1162201
Mobility and resettlement
0.00
1162202
Vocational training
0.00
1162203
Placement services and job-search assistance
0.001162204
Other benefits in kind
0.00

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APPENDIX I: The ESSPROS questionnaire detailed classification

H
O
U
S
E

S
O
C
I
A
L
E
X
C
L
U
S
I
O
N
N
.
E
.
C
.

1170000 Social protection benefits
1172000 Means-tested
1172200 Benefits in kind
1172210Rent benefit
1172211Social Housing
1172212
Other rent benefit
1172220
Benefit to owner-occupiersAll
Scheme Scheme Scheme
schemes
01
...
n
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

1180000 Social protection benefits
1181000 Non Means-tested
1181100 Cash benefits
1181110Periodic1181111
Income support
1181112
Other cash periodic benefits
1181120
Lump sum1181121
Other cash lump sum benefits
1181200 Benefits in kind1181201
Accommodation
1181202
Rehabilitation of alcohol and drugs abusers
1181203
Other benefits in kind
1182000 Means-tested
1182100 Cash benefits
1182110Periodic
1182111
Income support
1182112
Other cash periodic benefits
1182120
Lump sum
1182121
Other cash lump sum benefits
1182200 Benefits in kind1182201
Accommodation
1182202
Rehabilitation of alcohol and drugs abusers
1182203
Other benefits in kindAll
Scheme Scheme Scheme
schemes
01
...
n
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

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APPENDIX I: The ESSPROS questionnaire detailed classification

Optional data by functions:
SICKNESS/HEALTH CARE FUNCTION
Code

Description
Paid sick leave non means-tested (item1111111):Sickness or injury of a dependent family member
Paid sick leave means-tested (item 1112111):
Sickness or injury of a dependent family memberO
P 11111119
T
I 11121119
O
N DISABILITY FUNCTIONA
L
Code
Description
Disability pension non means-tested
D 11211119
Supplement for dependent children
A
Disability pension means-tested
T11221119
Supplement for dependent children
A
OLD AGE FUNCTION
Code
O
P
T
I
O
N
A
L

113111191131112911311139
11321119

Description
Old age pension non means-tested
Supplement for dependent children
Anticipated old age pension non means-tested
Supplement for dependent children
Partial old age pension non means-tested
Supplement for dependent children
Old age pension means-tested
Supplement for dependent children
Anticipated old age pension means-tested
Supplement for dependent children
Partial old age pension means-tested
Supplement for dependent children

11321129
D
A 11321139
T
A UNEMPLOYMENT FUNCTION
Code11611119
O
P
T
I
O
N
A
L

116111291162111911621129SURVIVORS FUNCTION
Code

D
A
T
A

Description
Full unemployment benefit non means-tested
Supplement for dependent children
Partial unemployment benefit non means-tested
Supplement for dependent children
Full unemployment benefit means-tested
Supplement for dependent children
Partial unemployment benefit means-tested
Supplement for dependent children

1141111911421119

Description
Survivors' pensions non means-tested (item1141111)
Over the reference retirement age
Survivors' pensions non means-tested (item1142111)
Over the reference retirement age

ESSPROS Manual and user guidelines — 2022 editionAll
schemes0

Scheme01

Scheme…

SchemeN

Scheme01

Scheme…

SchemeN

Scheme01

Scheme…

SchemeN

Scheme01

Scheme…

SchemeN

Scheme01

Scheme…

SchemeN00All
schemes000All
schemes
0
0
0
0
0
0
0
All
schemes
0
0
0
0
0
All
schemes
0

0

0

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APPENDIX I: The ESSPROS questionnaire detailed classification

PTC – CASH COMPONENT

Code11511131
O 11511211
P
T
I
O 11511231
N
A 11521131
L
D
A
T
A

11521231
11621111
11722121
11811111

11821211

Description
Family or child allowance non means-tested:
PTC Cash component
Birth grant non means-tested:
PTC Cash component
Family/children
Other cash lump sum benefits non meanstested:
PTC Cash component
Family or child allowance means-tested:
PTC Cash component
Family/children
Other cash lump sum benefits means-tested:
PTC Cash component
Full unemployment benefit means-tested:
PTC Cash component
Other rent benefit means-tested:
PTC Cash component
Income support non means-tested:
PTC Cash component
Social Exclusion n.e.c.
Other cash periodic benefits means-tested:
PTC Cash component

ESSPROS Manual and user guidelines — 2022 editionAll
schemes0

Scheme01

Scheme…

Scheme
N

0
0

0
0

0
0
0
0

0

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APPENDIX II: Qualitative information by scheme and detailed benefit

APPENDIX II: Qualitative information by
scheme and detailed benefit
1

2

Qualitative information by scheme and detailed benefit provides:a more in-depth knowledge of social protection schemes;better information to evaluate scheme and benefit classifications;a clearer basis for footnotes in publications and for ESSPROS database in New
Cronos;an improved response to questions from users of data by scheme;a support during the validation process of quantitative data and data on pension
beneficiaries.

The following information sets (Table A) in English should be available and annually updated(Table B):
Table A: ESSPROS qualitative information sets Table
1.1 General information includes:
1. Period covered
2. Date of updating qualitative information
3. Responsible organisation, person and E-mail contact
1.2 General description of the scheme includes:
1. English and original (in national language) name of the scheme
2. Scheme movement (year of introducing/abolishing/merging/splitting of the scheme)
3. classifications of the scheme
4. reference legislation and/or regulation
5. organisation(s) responsible for running the scheme
6. financing of the scheme
7. scope (protected people under scheme)
8. bibliography and web bibliography (optional)
9. history of the scheme
10. notes (other important information)
1.3 Description of the benefit includes:
1. English and original name of benefit
2. Year of introducing or abolishing the benefit
3. General conditions for granting the benefit
4. The categories of beneficiaries
5. Taxation of benefit

3

Period covered (year T1 to year T2)
Current qualitative information should refer to the calendar year T2, where year T2 is the year
to which last collected quantitative data refers to.

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Information on period covered (starting from year 2006 compulsorily or from the first year of
the availability of data when it is possible) should supply general information on the social
protection system main evolutions (at least in items: scheme movement, history of scheme,
notes, etc.) affecting the scheme.
4

Date of updating qualitative information should be refer to month and year of the last updatingby country.

5

English and original (in national language) name of scheme

5A

Example:General disablement benefits [Algemene arbeidsongeschiktheidswet (AAW)]

6

Scheme movement: information on year of introducing or abolishing or merging or splitting of
the scheme

6A

Examples:The scheme was introduced in 1995 and stopped in 2001.
In 1995 the scheme merged from scheme No name x and scheme No name y.
In 2002 scheme split into scheme x (No. name) and scheme y (No. name).

7

Classifications of the scheme: the classification of the schemes under the five criteria set in theCommission Regulation (EC) No 10/2008, (Section 1 of Annexes I and II) and following thedetailed classification in the ESSPROS Manual.

8

Reference legislation and/or regulation: List of valid legislation (name, number and years)

8A

Example:Law for Recruiting Disabled Persons (Behinderteneinstellungsgesetz, BEinstG), Federal Law
Gazette (BGBl.) No 22/1970, as last amended by Federal Law Gazette (BGBl.) No 150/2002

9

Organisation(s) responsible for running the scheme: Name of organisation(s) [abbreviation
optional]

9A

Example:The municipalities run and coordinate this scheme in collaboration with the labour market, i.e.
the Placement Centres, which are public employment offices ("Arbjdsformidliongen"), and thelabour market Council ("Arbejdsmarkedsstyrelsen"). The decision-maker is the central
government.

10

Financing of the scheme: Short description and list of payers.

10A Example:
The scheme is mainly financed by compulsory social contributions of employees; selfemployed and voluntary payers, by state contributions for students of tertiary schools, persons
who take care of children, persons with disability pensions, persons in military or civil service,and by re-routed social contributions between schemes (transfer from the National Labour
Office for job applicants receiving unemployment benefits).
Social contributions are not subject to taxation.
11

Scope (protected people under scheme): Short description of list of risks and covered people.

11A Example:
Provision of medical care and pharmaceutical products in state hospitals and abroad. The
services are provided free-of-charge for certain groups of patients, such as the elderly, civil
servants, students of state educational institutions, large families, war pensioners, persons
with low annual income, state officials, certain categories of chronically ill, etc. The services

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APPENDIX II: Qualitative information by scheme and detailed benefit

can also be provided at a reduced fee based on the patient´s income and the level of medical
care.
12

Bibliography and web bibliography: (optional information):

12A Example:
Ministry of Social Security and Labour (2002, 2003). Social Report (annual publication,
statistical data) published by the State Social Insurance, City.
MISSOC tables;
13

History of the scheme (22) a brief description of the main reforms of the scheme for the whole
period covered.

13A Examples
Example 1:
Major reforms:................
2000:
Act to Reform Pensions on Account of Reduced Earning Capacity (Gesetz zur Reform derRenten wegen verminderter Erwerbsfähigkeit)- actuarial reductions are introduced and the added period is prolonged for pensions on
account of reduced earning capacity commencing after 31 December 2000 (in steps).
2001:
Retirement Assets (Extension) Act (Altersvermögensergänzungsgesetz - AVmEG)- the income replacement ratio is lowered through modified pension adjustments (as from 1
July 2001);
Example 2:
Till 31 December 1990, pension security had been ensured by the Pension Security Office,since 1 January 1991 by the Slovak Administration of Social Security (in conjunction with the
Sickness Insurance Office and social affairs departments). The Pension Security Fund of the
National Insurance Agency was established as of 1 January 1993. The Pension Insurance
Fund (part of the Social Insurance Agency) has executed the collection of pension insurance
contributions and payments of pension benefits by the Act No. 274/1994 (Coll.) since 1
January
1995.
Until 1 January 2001 (based on the Government Regulation No. 118/1988) early retirement
pension (code: 1131112) could be claimed by employees who were dismissed because of
reduction of working places, were registered at an Employment office, were not able to find a
job and were no more than two years before reaching the retirement age.
Repealed laws:
Act No. 100/1988 (Coll.) on social security, as amended by later legislation Act No. 274/1994(Coll.) on Social Insurance Agency, as amended by later legislation Government Regulation
No. 118/1988 on early retirement pensions Act No. 46/1991(Digest) on pension increases, as
amended by later legislation Act No. 750/2002 (Coll.) on the state budget
14

Notes: links between schemes and other important information not elsewhere included.

14A Example:
Data source: centralised social security bookkeeping and accounting system (Proget), Social
Security Center (Centre Commun de la Sécurité sociale, CCSS); centralised health carebenefit system (Pen2), UCM; Datawarehouse of the General Inspectorate for Social security(Inspection générale de la sécurité sociale, IGSS);(22) If relevant

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APPENDIX II: Qualitative information by scheme and detailed benefit

CCSS web site: http://www.ccss.lu/site.htm;
UCM web site: http://www.ucm.lu;
Data quality: high, reporting based on accounting system.
15

Description of benefit(s) recorded under the reference heading comprising information forevery benefit as follows:a) English and original name of benefit [in bracket]b) Year of introducing or abolishing of benefit (during covered period)c) General conditions for granting the benefitd) The categories of beneficiariese) Taxation of benefit (liability to taxes and social contributions)

15A Examples
Example 1 (in category 1131111 NMT Old age pension:
Old-age pension (pension de vieillesse), subject to taxation, subject to social security
contributions: every beneficiary is entitled to an old age pension at the age of 65, provided
he/she can prove at least 120 months of insurance periods (voluntary and additional periods
included). An old-age pension consists of the following parts: a flat rate increase, aproportional increase related to periods during which contributions have been paid, staggered
proportional increase granted to beneficiaries retiring after March 1st, 2002, aged 55 years ormore and with proof of at least 38 years of insurance periods and an end of year allowance.
Example 2: F1151121 NMT Birth grant:"Child birth allowance (allocation de naissance), not subject to taxation, not subject to social
security contributions: a series of three lump sum allowances in the event of birth (in order tobe eligible for each allowance, medical examination requirements have to be fulfilled by themother).
Maternity allowance (allocation de maternité), not subject to taxation, not subject to social
security contributions: lump sum payment in the event of child birth or adoption for the motheror the adoptive parents who do not have rights to a periodic cash benefit for maternity leaveor, by way of a complement, to those receiving an allowance whose amount is lower than thatof the maternity allowance (e.g. in the event of part-time activity)."
16

Annual updating of a complete set of previous qualitative information should be refer to current
transmission quantitative data and will be limited to changes in the social protection system
and will apply for following items (Table B).

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Table B: Annual updating qualitative informationon the qualitative database level(1) for all items:on the scheme level (1)a) complete description of introduced schemesb) information about abolished schemesc) name of new legal act or regulationd) brief description of the main reform (2)e) new reference publications or web sites (optional)

on the benefit level (3)a) complete description of introduced benefitb) information about abolished benefitc) updating description of benefit(1) In accordance with the previous paragraph 3-4( 2) In accordance with the previous paragraphs 5-14
( 3) In accordance with the previous paragraph 15

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APPENDIX III: Methodology of the module on pension beneficiaries

APPENDIX III: Methodology of the module
on pension beneficiaries
1 Scope of the pension beneficiaries’ module1

According to the EP and Council Regulation 458/2007 (Annex II), pension beneficiaries aredefined as recipients of one or more of the periodic cash benefits of a social protection
scheme falling within seven pension categories (disability pension; early retirement benefit due
to reduced capacity to work; old-age pension; anticipated old-age pension; partial pension;
survivors' pension; early retirement benefit due to labour market reasons).
A social protection scheme is defined in the same Regulation as: "a distinct body of rules,
supported by one or more institutional units, governing the provision of social protection
benefits and their financing".

2

The aim of the module on pension beneficiaries is to calculate the total number of beneficiaries
within:Each of the previously mentioned seven categories of pensions;

Each of the four functions grouping these categories (disability, old-age, survivors' andunemployment);

and, at total level, for the aggregation of the four functions.

2 Statistical units and data collection requirements
3

Data, i.e. the number of beneficiaries, expressed exclusively in units (not thousands,
millions…of pensioners), must be provided by social protection scheme ("scheme" level) andfor the total of schemes ("all schemes" level).
Each of the 7 pension categories in the definition is further split into two subcategories, nonmeans-tested and means-tested pensions, so that the total number of elementary (they are
not obtained by aggregation of other items in the questionnaire but rather directly from data
sources) items for which figures are to be provided is 14.

4

At “all schemes” level (see paragraph 3.1), the information must be broken down by genderwhile this breakdown is optional at “scheme" level (see paragraph 3.2.). At both levels, figureson pension beneficiaries (standard table Benefits/Schemes of the questionnaire), areintegrated by information concerning legal aspects with direct impact on data (qualitative
information) and complementing statistics (quantitative data), from here on defined"Supplementary information". For both the kinds of information (standard table andsupplementary information) compulsory and optional elements are distinguished.

5

In general, the number of pensions received by pensioners differs from the number ofpensioners as many pensioners might receive more than one pension. The total number ofbeneficiaries is, so, defined as the number of persons receiving at least one pension (i.e. a
person who receives more than one pension is counted only once). Double counting is to be
avoided. Calculating the number of beneficiaries entails gradual aggregation in shifting from aunit (scheme) level to an overall (all schemes) one. Double counting must be spotted andtreated at all stages of this gradual process of aggregation. Some guidance for detecting,estimating and eliminating double counting is given in paragraph 4.2.

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APPENDIX III: Methodology of the module on pension beneficiaries

3 Definitions and classifications
6

General definitions of categories and classification of the beneficiaries included as mandatory
in the module are laid down in the Commission Regulation (EC) No 10/2008, Section 2 ofAnnexes I and II, respectively. For optional information this appendix has to be referred.

7

Detailed definitions of the benefits included under the seven categories of pension (disability,
early retirement benefit due to reduced capacity to work, old-age, anticipated old-age, partial,
survivors’ and early retirement due to labour market reason) and subcategories (breakdown
according to mean-testing), and here mentioned by item-codes, are defined in the ESSPROSManual, Part 2 (where categories are grouped by function).

3.1 ALL SCHEMES (TOTAL) LEVEL
3.1.1 Compulsory data
8

Special items and codes have been created for the pension beneficiaries' module in order toreport, compulsorily at all schemes level, on the total number of beneficiaries without double
counting for the seven categories and the four functions involved (see their nested
classification in Table A).
Table A: Classification of pension beneficiaries without double counting at all schemes(total) level
Total pension beneficiaries
Total pension beneficiaries in disability function
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced capacity to work
Total pension beneficiaries in old-age function
Old-age pension beneficiaries
Anticipated old-age pension beneficiaries
Partial pension beneficiaries
Total pension beneficiaries in survivors' function
Survivors' pension beneficiaries
Total pension beneficiaries in unemployment function
Beneficiaries receiving early retirement benefits for labour market reasons
Total pension beneficiaries in old-age and survivors' functions

Ranging from a pension category level, through the function level up to the total number ofbeneficiaries, these special items and corresponding codes, as listed in the questionnaire areso defined:
9

Total pension beneficiaries (1000000). It is the number of persons in the country receiving atleast one pension. It is obtained as aggregation of the totals for the four functions (1120110,
1130110, 1140111, 1160113), treating for type 6 double counting.

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APPENDIX III: Methodology of the module on pension beneficiaries

10

Total pension beneficiaries in disability function (1120110). It is the number of beneficiaries
obtained as aggregation of the 2 following categories classified under the Disability function,
treating for type 4.1 double counting:
Disability pension beneficiaries (1120111). It is the number of pension beneficiaries obtained
as aggregation of the elementary items 1121111 and 1122111, treating for type 3 double
counting;
Beneficiaries receiving early retirement benefits due to reduced capacity towork (1120112). It is the number of pension beneficiaries obtained as aggregation of theelementary items 1121112 and 1122112, treating for type 3 double counting.

11

Total pension beneficiaries in old-age function (1130110). It is the number of pension
beneficiaries obtained as aggregation of the 3 following categories classified under the Old
age function treating for type 4.2 double counting:Old-age pension beneficiaries (1130111). It is the number of pension beneficiaries obtained as
aggregation of the elementary items 1131111 and 1132111, treating for type 3 double
counting;
Anticipated old-age pension beneficiaries (1130112). It is the number of pension beneficiaries
obtained as aggregation of the elementary items 1131112 and 1132112, treating for type 3
double counting;Partial pension beneficiaries (1130113). It is the number of pension beneficiaries obtained as
aggregation of the elementary items 1131113 and 1132113, treating for type 3 double
counting.

12

Total pension beneficiaries in survivors' function (1140111). It is the number of pension
beneficiaries classified under the Survivors’ function obtained as aggregation of theelementary items 1141111 and 1142111, treating for type 3 double counting.

13

Total pension beneficiaries in unemployment function (1160113). It is the number of pension
beneficiaries classified under the Unemployment function obtained as aggregation of theelementary items 1161113 and 1162113, treating for type 3 double counting.

14

Total pension beneficiaries in old-age and survivors' function (1190110). It is the number ofpension beneficiaries obtained as aggregation of the total old-age and total survivors’
beneficiaries (1130110 and 1140111) treating for type 5 double counting.
Such information on the relation between the two largest pension categories should help to
explain differences between the total number of pensioners in a country and the figure
obtained through aggregation of functions' totals.

3.1.2 Optional data
15

Supplementary information is included at "all schemes" level as optional:(e) Rest of the world: number of beneficiaries living outside the country. Information about thepensions paid to non-residents.

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APPENDIX III: Methodology of the module on pension beneficiaries

3.2 SCHEME LEVEL
3.2.1 Compulsory data
16

At "scheme" level, figures for the "Total" (Men and Women) column are compulsory just for
those items, out of the 14 (categories and subcategories), treated by that particular scheme.
For any scheme qualitative information has to be provided with respect to:(a) Reference retirement age by gender.
A reference retirement age by gender must be indicated for each scheme providing old-age
benefits. Further on this in paragraph 4.1;(b) Reference date / mode of calculation.
Data provision is established with reference to the end of the calendar year. This figure refers
to the number of beneficiaries on 31 December/1 January. Further on this in paragraph 4.

3.2.2 Optional data
17

The information by scheme could be further integrated by the gender breakdown of data (thequestionnaire is structured so to include these figures) and by the following supplementary
information:(c) Total number of pension beneficiaries by scheme (and by gender).
It may be defined as the number of persons receiving at least one pension provided by thescheme, i.e. a person who receives more than one pension is counted only once.
(d) Total number of pension benefits by scheme (and by gender).
Linked to the value under c), this information, basic for a better assessment of the importanceof double counting, may be defined as the total number of benefits provided by the scheme,(i.e. a person who receives more than one pension is counted several times).

4 Guidelines and issues
18

The layout of the questionnaire to be used for the pension beneficiaries' module is as the one
in appendix III in ESSPROS Manual and user guidelines. Its format is developed incompliance with the rules on transmission set by the Commission Regulation (EC) No
1322/2007, implementing ESSPROS (Annex I, Section 2).

19

The ESSPROS Manual to the Core system has to be referred for general principles in filling in
the questionnaire. Though, the two main aspects defining recording in the pension
beneficiaries’ module are:
1) Recording of benefits paid to beneficiaries over the reference retirement age, as establishedin the reference scheme, has to be dealt differently on the basis of the category of benefit
formerly participated. More details are given in paragraph 4.1;
2) Calculating the number of pension beneficiaries necessitates the identification of double
counting and if double counting exists, its elimination at all stages of aggregation. Guidelines
are given in detail in paragraph 4.2.

20

Alternative practices follow for issues that are likely to be met by countries when filling in thequestionnaire:

21

The data required concern the number of beneficiaries. In the impossibility to supply thisinformation at scheme level, the number of benefits should be supplied, by explicitly indicating
the value concerns the benefits and not the beneficiaries. In this case, calculating the numberof beneficiaries, at "all schemes" level, would require estimates for the sum of double counting(Number of beneficiaries = Number of benefits – Sum of double counting).

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APPENDIX III: Methodology of the module on pension beneficiaries

22

The values at "all scheme" level have to be supplied broken down by gender. If thisbreakdown is not known, or supplying it would represent a very hard work or would involve aworsening on the data, an estimation of the figures concerning the two genders has to beprovided.

23

The questionnaire sent to any Member State would contain white cells for those benefits forwhich expenditures (quantitative data in ESSPROS Core system) were recorded the year
before the one pension beneficiaries' collection refers to. The values should be inserted only inthese "white cells". In case some schemes are missing (for instance, a new scheme has
started up), it is possible to add them, maintaining the same format in the questionnaire.

24

In case of discovering inconsistencies between expenditure figures and data on pension
beneficiaries due to an imperfect classification of expenditure data (e.g. expenditures on
disability pensions above the reference retirement age not recorded under old age), it isrecommended to revise and improve the classification of expenditure data rather thanclassifying data on the number of beneficiaries in the wrong way. So again, there might be theneed to revise the questionnaire (including a short comment indicating these revisions would
be very helpful).

4.1 REFERENCE RETIREMENT AGE
25

The concept of reference retirement age is necessary, as stated in the Part 2 of Manual, todistinguish clearly between the old-age functions and other functions.

26

Regardless the country-specific practice, in order to respect the principle of the functionalclassification of the ESSPROS, pensions paid to beneficiaries over the reference retirementage, as established in the reference scheme, must be recorded under the item old-age
pension in case the benefit provided was formerly classified as disability pension; not thesame applies to survivors’ pensions keeping their classification regardless the age of thepensioner.

27

The concepts are better explained in the user guidelines integrating the ESSPROS Manual
where further guidance to practical issues is given.
Countries specifying a reference retirement age should indicate the methods or the reasonsfor selecting a specific age.

4.2 TREATMENT OF DOUBLE COUNTING
28

Stages of the gradual aggregation process where double counting could arise have been
individuated (Table B).
Table B: Ordered steps in elimination of double counting in number of pension
beneficiaries
1. At cell level inside a scheme
2. At one pension category level between schemes
3. At item level between Non Means and Means-tested subcategories
4. At intra-function level
5. At inter-function level (Old-age plus Survivors)
6. At total pension beneficiaries’ level

Different double counting types are numbered according to the implicit ordered steps followedin the data aggregation process leading to the total number of pension beneficiaries. Double

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APPENDIX III: Methodology of the module on pension beneficiaries

counting when aggregating at scheme level is not included in the methodology as its treatment
is not finalized to obtain data as in the aim of the module.
28A Examples are given at the bottom of any subsection to be used as guidelines and suggestion
on how eliminating double counting in case similar situations appears. They have been basedon the real cases, specific for a country at some point in time, but here made as general as
possible; if another method is used, the country must indicate it.
A. Double counting for a pension category inside a scheme (cell level): type 1
29

The first step in filling in the questionnaire is the aggregation of all benefits included under thesame heading; a cell can include either different types of benefits (case 1.1) or beneficiaries
from two or more schemes (case 1.2).

29A For each scheme and for each type of pension provided by it (relevant cells at scheme level),the number of beneficiaries receiving at least one of the benefits classified under that type of
pension should be calculated.
Type 1 of double counting has to be treated at this step with respect to the content of the cells
for the 14 elementary items (1121111, 1121112, 1122111, 1122112, 1131111, 1131112,
1131113, 1132111, 1132112, 1132113, 1141111, 1142111, 1161113 and 1162113) at
scheme level.
30

case 1.1) If the cell refers to a category including different types of benefits, in most cases thenumber of beneficiaries cannot be obtained by a simple aggregation of the beneficiaries of thebenefits included in the cell because a person can be beneficiary of different benefits at thesame time.

30A In this case, in order to calculate the number of beneficiaries without double counting to bereported in the cell corresponding to the elementary item pensioners receiving more than oneof the benefits classified under the item have to be counted only once (see step 1 in appendix
III.6).
Example 1: if in a scheme N2 there are two benefits (let's indicate them by benefit a, benefit b)classified under the item X2, any beneficiary receiving both the benefit a and the benefit b has
to be counted once. In the example in figure 1 the number to be indicated for the item X2 inscheme N2: 1,000+400-300=1,100
Figure 1. Double counting to be treated at step 1 is double counting between two (or more)
benefits classified as a pension X and belonging to the same scheme

1
2
…
…
…
…
…
14

Item X11211111121112…
Item X1…
Item X2

Scheme 1…

Scheme N1

Scheme N2

benefit dbenefit cbenefit abenefit b….
1162113

At step 1 this type of double counting is treated because the two benefits, a and b, are in thesame cell.

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APPENDIX III: Methodology of the module on pension beneficiaries

Example 2: If the three following types of allowances are included under means tested old age
pension of the same scheme:- Supplementary allowance (Old age Solidarity Fund): 24,000 benefits/beneficiaries;- Additional benefit: 5,200 benefits/beneficiaries;- Allowance for the retired people: 2,700 benefits/beneficiaries.
Since the beneficiaries of the additional benefit and of the of the allowance for the retired
people are already included in the number of beneficiaries of the Old age Solidarity Fund, thetotal number of beneficiaries without double counting for this item is only the number of thebeneficiaries of the supplementary allowance: 24,000 beneficiaries.
Example 3: If the two following types of allowance are included under non-means tested
survivors' pensions of the same scheme:- Adjustment pension and widows pension, basic pension: 55,000 beneficiaries;- Child pension, basic pension: 30,000 beneficiaries.
the total number of beneficiaries can be obtained by a simple aggregation as the nature of theallowances in object doesn't allow the same individual to be entitled to both of them.
So the total number of beneficiaries without double counting is 85,000
30B Filling-in the questionnaire scheme by scheme, only type 1 of double counting has to betreated. This implies that:

Case A.1: in case a part of beneficiaries in a scheme for a given benefit are also
beneficiaries for a similarly classified benefit but in a different scheme (this is often thecase of a scheme providing a basic benefit and a scheme providing a supplementary
benefit of the same type), these double counted beneficiaries have to be separately
recorded under each of the schemes they are recipients of.
Not to do so (refer to the example 4 below), the treatment for type 2 of double counted
would be applied: Type 2 of double counting has not to be treated when filling in eachscheme' cells (but in the next step of horizontal aggregation).
Example 4: Let's suppose there are 500 beneficiaries receiving a pension X2 from bothschemes N1 and N2 (see figure 2). Even if they are double counted between the benefit
a and the benefit c, they have all to be added up when calculating both the number ofbeneficiaries to be reported for the pension category X2 in scheme N1 and scheme N2.
Therefore the correct treatment is:item X2 in scheme N1 is: 1,200
item X2 in scheme N2 is: 1,000+400-300=1,100

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Figure 2: Double counting not to be treated at step 1 is double counting between two (or more)
benefits classified as a pension X but belonging to different schemes

1
2
…
…
…
…
…
14

Item X11211111121112…
Item X1…
Item X2

Scheme 1…

Scheme N1

Scheme N2

benefit dbenefit cbenefit abenefit b….
1162113

At step 1 this type of double counting is not treated because the two benefits, a and c, are notin the same cell.

Case A.2: in case a part of beneficiaries in a scheme for a given benefit are also
beneficiaries within the same scheme of any other benefit classified as a different typeof pension (different item), these double counted beneficiaries have to be separately
added up when calculating the number of beneficiaries to be reported for thesepensions.
No to do so (refer to the example 5 below), the treatment of double counting for verticalaggregation would be applied: treatment for type 3-6 of double counting has not to be
applied when filling-in the elementary items’ cells. Therefore also the treatment of
double counting between non mean-tested and mean-tested benefits for a category ofpension has to be avoided at this stage.
Example 5: Let' s suppose that within schemes N2 there are 150 beneficiaries receiving
both the benefit d, classified under the pension category X1, and the benefit a,classified under the pension category X2 (see figure 3). Even if they are double counted
between the benefit a and the benefit d, they have to be taken into account whencalculating/reporting the number of beneficiaries of the pension X1 as well as thenumber of beneficiaries of the pension X2. Therefore the correct treatment is:item X2 in scheme N1 is: 1,200
item X1 in scheme N2 is: 800
item X2 in scheme N2 is: 1,000+400-300=1,100

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Figure 3: Double counting not to be treated at step 1 is double counting between two (or more)
benefits classified as different types of pension but within the same scheme

1
2
…
…
…
…
…
14

Item X11211111121112…
Item X1…
Item X2

Scheme 1…

Scheme N1

Scheme N2

benefit dbenefit cbenefit abenefit b….
1162113

At step 1 this type of double counting is not treated because the two benefits, a and d, are notin the same cell.

31

case 1.2) Sometimes, because of the lack of information, it is impossible to know how many
beneficiaries receive one specific type of benefits from a scheme, and how many from anotherone. In this case an estimate/imputation of the breakdown between the schemes should be
made.

31A Because of a lack in statistics it's impossible to know how many beneficiaries receive thebenefits included under the heading X from the scheme "a" and how many from the scheme"b". In this case all the beneficiaries could be included in one scheme, e.g. scheme "a".
B. Double counting between schemes (pension category level): type 2
32

The second step is horizontal aggregation: the same pension category is aggregated throughschemes.
Double counting between schemes has to be eliminated since, in general, the number ofbeneficiaries given under a social benefit (pension), cannot be obtained by a simple
aggregation of the beneficiaries for all the schemes.

32A The second step in filling-in the questionnaire is, for each of the 14 types of pension(elementary items), the calculation of the total number of beneficiaries receiving at least one
pension classified as such.
Type 2 of double counting has to be treated at this step with respect to the content of the cells
for the 14 elementary items (1121111, 1121112, 1122111, 1122112, 1131111, 1131112,
1131113, 1132111, 1132112, 1132113, 1141111, 1142111, 1161113 and 1162113) at "allschemes" level.
For a given benefit, pensioners might be beneficiaries of:
33

case 2.1) several basic schemes (e.g., public and private).
If this the case and each person has an own personal identification number (that is, forinstance, given to everyone soon after birth), the double counting can be easily avoided.
Otherwise, a correction coefficient, showing the relationship between pensions andpensioners, could be used.

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33A In general, the number of beneficiaries without double counting at 'all schemes' level for eachtype of pension has to be obtained by adding up the beneficiaries recorded under the same
item through all schemes, but counting only once the pensioners that get this type of pension
from two or more schemes. This value can be obtained by subtracting from the simple sum of
the beneficiaries by scheme for a given item, the number of beneficiaries receiving it from
more than one scheme (see step 2 in appendix III.6).
This implies that:

Check 1: at 'all schemes' level, the beneficiaries for the item X (i. e. the sum, treated for
double counting of type 2, of the beneficiaries of a pension X from all the schemes
concerned) has to be smaller or at least equal than the simple sum, obtained without
any treatment for double counting, of the beneficiaries for the schemes providing thattype of pension. In general it should be verified:

Item X all schemes level ≤ ΣN Item X scheme NCheck 2: at 'all schemes' level, the number of beneficiaries for the item X has to begreater or, at least, equal to the number of beneficiaries (in case all the remaining
schemes are double counted with this scheme) for the scheme with the largest numberof beneficiaries for that category of pension (see example 6).

Case B.1: if the number of beneficiaries recorded at all schemes level for an item canbe obtained by just adding up the corresponding items over all the providing schemes,
this implies there is no double counting between schemes for that type of pension andthat there is no beneficiary receiving that type of pension from more than one scheme.

Case B.2: if an item at all schemes level is reproducing the values for one single
scheme N, this implies that all the remaining schemes are double counted with thisscheme and all their beneficiaries are also receiving the same kind of pension from that
scheme.
Example 6.
Let's suppose that for NMT disability pension there are:- 5,000 beneficiaries in scheme 1- 3,000 beneficiaries in scheme 2- and 2,000 pensioners that are beneficiaries of both scheme 1 and scheme 2Given the way any item X at “all schemes” level should be built, it is not mathematicallypossible to observe the case, as in figure 4, where for an item the value at all schemes
level is smaller than the value recorded for one of the schemes. A situation like the one
in figure 4 should alert the compiler that probably an error is caused by a wrong
treatment of double counting (double counted beneficiaries subtracted twice: type 2
double counting is treated both at scheme level and at all schemes level).

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Figure 4: Not correct treatment of type 2 double counting

Table Benefits/Schemes
All schemes Scheme 1
Total

1120110

Scheme 2

Scheme …

Total

Total

Total

Total pension beneficiaries in disability function(1120111, 1120112)

1120111 Disability pension beneficiaries
1120112 Beneficiaries receiving early retirement benefits
Non Means-tested
1121111112111211221111122112Disability pension beneficiaries

3000

6000
4,000

5000

1000

Beneficiaries receiving early retirement
benefits due to reduced capacity to work
Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement
benefits due to reduced capacity to work

The correct treatment should be:
Item 1121111 in scheme 1 is: 5,000
Item 1121111 in scheme 2 is: 3,000
Item 1121111 at all scheme level is: 5,000+3,000-2,000=6,000
33B Example 7: If the aggregation of the number of benefits under the heading X in the basic
schemes gives the result of 3,500,000 benefits and the correction coefficient is estimated to be
1,1 (i. e. each pensioner receives on average 1,1 pensions), the number of beneficiaries
without double counting for that heading is: 3,500,000 / 1.1 = 3,181,000.
34

case 2.2) several supplementary schemes.
The same methods mentioned for case 2.1 could be used.

35

case 2.3) one basic and one supplementary scheme.
Each pensioner gets benefits from a basic scheme and from a supplementary scheme: thebeneficiaries of the supplementary scheme should not be aggregated.

35A If the aggregation of the number of benefits under the heading X in all schemes (basic +supplementary) gives the result of 5,500,000 benefits, while the recipients of the
supplementary schemes under the same heading are 2,000,000, the total number ofbeneficiaries of X pensions without double counting is: 5,500,000 – 2,000,000 = 3,500,000
beneficiaries.
36

case 2.4) several basic schemes and one supplementary scheme.
One should first deal with double counting between supplementary and basic (see case 2.3)
and then with double counting between the basic schemes (case 2.1).

36A First, the beneficiaries of the supplementary scheme should be ignored for the calculation of
the total number of beneficiaries for a given item. Let's say the aggregation of the number ofrecipients/benefits under the heading X for all schemes gives the result 25,000,000 benefits.
From this figure the number of the recipients of the supplementary scheme has to be
deducted: if they are 8,000,000, this would imply the number of benefits without double
counting within all schemes to be 17,000,000. Then, if the average number of direct rights
pensions drawn by an entitled person is known, 1.42 for example, the number of benefits
would be linked to the number of beneficiaries in the following way 17,000,000 / 1.42 =11,971,831.

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37

case 2.5) one basic scheme and several supplementary schemes.
It is necessary first to treat double counting between supplementary schemes (see case 2.2)
and then proceed as indicated in case 2.3.

38

case 2.6) several basic schemes and several supplementary schemes.
It is necessary first to treat double counting between supplementary schemes (see case 2.2)
and then proceed as indicated in case 2.4.

38A The result of type 2 double counting treatment must be shown only at "all schemes level": ifthere are beneficiaries receiving the same type of pension from two or more schemes (as it isoften the case for supplementary schemes), each scheme must show the effective number ofbeneficiaries for that item.
38B Double counting between items has not to be treated at this level of aggregation (horizontal).
Each item must show the effective number of beneficiaries (see example 8). So the treatment
for types 3-6 of double counting has not to be applied when filling-in the elementary items’
cells at “all schemes” level. At the level of elementary items, therefore, double counting
between means and non means-tested should not be treated; this type of double counting
should be only treated at the next step of the gradual aggregation process, i.e. whencalculating the total for the seven categories.
Example 8. Let's suppose that at “all schemes” level there are:- 330,000 beneficiaries of NMT old-age pension- 60,000 beneficiaries of NMT anticipated old-age pension- 252,000 beneficiaries of NMT survivors’ pension- 150,000 beneficiaries receiving both a NMT old-age and a NMT survivors’ pensions.
The information on the double counting between NMT old-age and survivors’ pension should
not affect the values recorded for the items 1131111 and 1141111, as it is the case in thecolumn with wrong totals (see figure 5), where the double counted beneficiaries have been
subtracted from the number of NMT survivors’ pension beneficiaries.
To compile correctly the questionnaire each elementary item at all schemes level must show
the effective number of beneficiaries involved.

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Figure 5: Treatment of type 2 double counting

At step 2 cases of double counting between elementary items has not to be treated.

Therefore the correct treatment is:
Item 1131111 at all schemes level: 330,000
Item 1141111 at all schemes level: 252,000

C. Double counting between non means-tested and means-tested pension categories (itemlevel): type 3
39

Third step, set at all-schemes level, is the aggregation of non means-tested and means-tested
subcategories of any benefit.
At this step, generally it is the case where no double counting arises, but in some countries
different situations may deserve attention:

39A The aim of the third step (first step in vertical aggregation) is, the calculation of the total
number of beneficiaries receiving at "all schemes" level a certain category of pension, either
non means-tested or means-tested.
Type 3 of double counting has to be treated at this step with respect to the content of the cells
for the items corresponding at all schemes level to the totals for each of the 7 pension
category (1120111, 1120112, 1130111, 1130112, 1130113, 1140111, 1160113).

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40

case 3.1), all the beneficiaries of means-tested benefit also get a non means-tested benefit. In
this case, the number of beneficiaries without double counting is the number of beneficiaries of
the non means-tested benefit.

40A If the total number of non means-tested X pension beneficiaries is 700,000 and the total
number of means-tested X pension beneficiaries are 400,000, then the total number of X
pension beneficiaries without double counting, is: 700,000
41case 3.2) if a beneficiary of a means-tested benefit does not get necessarily a non meanstested benefit as well, the methods to estimate the total number of beneficiaries (non meanstested + means-tested) for that benefit should be indicated.

41A In general, at 'all schemes' level, the number of beneficiaries without double counting for eachcategory of pension has to be obtained by adding up the beneficiaries receiving that type of
pension with or without a means-testing but counting only once the pensioners that get it inboth cases.
For a given type of pension this value can be obtained by subtracting from the simple sum of
the beneficiaries for the two subcategories, the number of beneficiaries in common between
the non means and the means-tested subcategories (see step 3 in appendix III.6).
This implies:

Check 3:category X ≤ subcategory X non means-tested+ subcategory X means-testedCase C.1: in case the total value (non means-tested and means-tested) at all schemes
level for a category X corresponds to the sum of the values recorded under the two
subcategories this implies that there is no double counting between NMT and MT
pensions and that beneficiaries can receive either a non means-tested pension X or ameans-tested pension X, never the two at the same time.
Example 9. Let's suppose that at all schemes level there are:- 6,000 beneficiaries of NMT disability pension- 2,000 beneficiaries of MT disability pension- 1,000 beneficiaries receiving both an NMT and an MT disability pension
This last information should not affect the values recorded for the items 1121111 and1122111, as it is the case in the column with wrong totals in figure 6, where the double
counted beneficiaries have been subtracted from the number of MT disability pension
beneficiaries.
To compile correctly the questionnaire each subcategory at all schemes level mustshow the effective number of beneficiaries involved: cases of double counting
between the subcategories non means/means shall be treated only at level of thecorresponding category.
The correct treatment is:
Item 1121111 at all schemes level = 6,000
Item 1122111 at all schemes level = 2,000
Item 1120111 at all schemes level = 6,000+2,000-1,000=7,000

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Figure 6: Treatment of type 3 double countingCase C. 2: in case the total value (non means-tested and means-tested) at all schemes
level for a category X corresponds to the value for the subcategory non means-tested,
this implies that there is double counting between NMT and MT pensions and thatanybody receiving a means-tested pension X also receive a non means-tested pension
X.

D. Double counting between categories in aggregation
42

In the last step, namely vertical aggregation at all-schemes level, double counting treatment
has to be dealt with differently according to degrees of aggregation (intra-function aggregation,inter-function aggregation, total aggregation).

D.1 Double counting in intra-function aggregation:
With respect to the two functions involved:
Double counting in Disability function: type 4.1
43

There should be no double counting between the pensions categories falling under thedisability function, because the conditions for granting these pensions are different (see § 24
and 25 in ESSPROS Manual – Part 2). Hence, if it is the case, the number of beneficiaries canbe easily calculated by adding the beneficiaries of these two pension categories. For countries
meeting problems in distinguishing between "disability pensions" and "early retirement benefits
due to reduced capacity to work" references and clarifying examples could be found in the
ESSPROS Manual and user guidelines.

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43A The fourth step with respect to the disability function, concerns the calculation of the total
number of beneficiaries receiving at least one pension classified within the function.
Type 4.1 of double counting has to be treated at this step with respect to the content of the cellcorresponding at all schemes level to the total for the function disability (item 1120110).
In general, the number of beneficiaries without double counting for the disability function at 'allschemes' level, has to be obtained by adding up the beneficiaries recorded under the twocategories disability (1120111) and early retirement benefits due to reduced capacity to work
(1120112), but counting only once the pensioners that get at the same time one pension fromeach of the two categories.
This value can be obtained by subtracting from the simple sum of the values under the items
1120111 and 1120112, the number of common beneficiaries (see step 4 in appendix III.6).
item 1120110= item 1120111+ item 1120112- (double counting between 1120111 and 1120112)
In terms of set theory:
item 1120110= item 1120111 U item 1120112
Double counting in Old-age function: type 4.2
44

In theory, the number of beneficiaries for old-age can easily be calculated by adding up the
beneficiaries of the three pension categories. Following the ESSPROS methodology, there
should be no double counting between the three pension categories falling under the old-age
function, because, as specified in the ESSPROS Manual, the anticipated and partial pensions
are converted into old age-pensions when the beneficiary reaches the retirement age or when
he/she retires completely. Still exceptions to this general principle could be met by countries:
in this case references and clarifying examples could be found in the ESSPROS Manual anduser guidelines.

44A The fourth step with respect to the old-age function, concerns the calculation of the total
number of beneficiaries receiving at least one pension classified within the function.
Type 4.2 of double counting has to be treated at this step with respect to the content of the cellcorresponding at all schemes level to the total for the function old-age (item 1130110).
In general, the number of beneficiaries without double counting for the old-age function at 'allschemes' level has to be obtained by adding up the beneficiaries recorded under the three
categories old-age (1130111), anticipated old-age (1130112) and partial (1130113), butcounting only once the pensioners that get at the same time one pension from at least two ofthese categories.
This value can be obtained by subtracting from the simple sum of the values under the items
1130111, 1130112 and 1130113, the number of common beneficiaries (see step 4 in appendix
III.6).
item 1130110= item 1130111+ item 1130112+ item 1130113- (double counting between 1130111, 1130112 and 1130113)
In terms of set theory:
item 1130110= item 1130111 U item 1130112 U item 1130113

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D.2 Double counting in inter-function aggregation
Double counting between total old age and survivors' pension beneficiaries: type 5
45

Whether the case of a country without a national pension system integrating old age, disability
and survivors’ functions and without a conversion system transforming disability and survivors’
pensions into old age pensions at the reference retirement age, double counting might bepresent when aggregating pensioners under “old-age pension” and those under “survivors’
pension”.

45A The compulsory nature of the item coded as 1190110 (§ 9 of this appendix) makes, for thepension beneficiaries' module, the recording of survivors’ pensions to pensioners above thedefined reference retirement age compulsory; in fact, this information could be obtained as thedifference between the sum of the two totals and the figure indicated in correspondence to thecode 1190110 (double counting corrected value).
45B The fifth step in filling-in the questionnaire is the calculation of the total number of beneficiaries
receiving at least one pension classified either within the old age function or within thesurvivors' function.
Type 5 of double counting has to be treated at this step with respect to the content of the celldefined "Total beneficiaries in old-age and survivors' functions" (item 1190110).
In general, the code 1190110 at "all schemes" level should be obtained as the aggregation of
the number of all beneficiaries under the old-age function (item 1130110) and all beneficiaries
under the survivors' function (item 1140111) minus (once) the people receiving both old-age
and survivors' pensions (see step 5 in appendix III.6):
item 1190110= item 1130110+ item 1140111-(double counting between old-age andsurvivors' functions)

Using set theory, if the red set contains the beneficiaries under the old-age function, the blue
set contains the beneficiaries under the survivors' function, the black set contains thebeneficiaries receiving both an old-age and a survivors' pension, than the green area is thevalue 1190110:
item 1190110= item 1130110 U item 1140111

This implies that:

Check 4. The difference between the sum of the values under the codes 1130110 and
1140110, and the code 1190110 quantifies the double counting between the twofunctions:
item 1130110+ item 1140110- item 1190110 = item 1130110+ item 1140110-[item130110+ item 1140111-(double counting between old-age and survivors'functions)];
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Therefore it has to be made sure that this difference is smaller than the smallest
between the two values 1130110 and 1140111.
item 1130110+ item 1140110- item 1190110< item 1130110
item 1130110+ item 1140110- item 1190110< item 1140110
Example 10. Let's consider a situation similar to the one in the example 8. In addition
let's suppose there is only one scheme, scheme 1, providing old age and survivors'
benefits:-330,000 beneficiaries of NMT old-age pension-60,000 beneficiaries of NMT anticipated old-age pension-252,000 beneficiaries of NMT survivors’ pension-150,000 beneficiaries receiving both a NMT old-age and a NMT survivors’
pensions.
If it is tried to treat the double counting between NMT old-age and NMT survivors' at thewrong step, i.e. at level of scheme 1, and, in addition, acting in a wrong way, double
counted beneficiaries are imputed exclusively to the item for NMT old-age pension, this
twofold incorrect treatment of double counting can be detected by the type of checkdescribed above (check 4).
Considering the values at all schemes level in the first column in figure 7:
item 1130110+ item 1140110- item 1190110= 390,000+102,000-342,000=150,000
the number of double counted beneficiaries between the functions old-age andsurvivors' will result greater than the beneficiaries of survivors' pensions and this is notpossible.

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Figure 7: Importance of check 1 in detecting a non-correct treatment of double counting
Table Benefits/Schemes
WRONG
All Schemes
Total

1130110 Total pension pension beneficiaries in old age function
1130111 Old-age pension beneficiaries
1130112 Anticipated old age pension beneficiaries
1130113 Partial pension beneficiaries
Non Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries
Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries

113111111311121131113113211111321121132113

Non Means-tested
Survivors' pension beneficiaries
Means-tested
Survivors' pension beneficiaries

1142111330,000

330,000

60,00060,000Scheme 1
Total

330,000

330,000

330,000

330,000

60,00060,00060,00
060,000Scheme 1

Total



102,000

Total

All Schemes

Total

102,000

All Schemes

1190110 Total beneficiaries in old-age and survivors' functions

Total

Total

390,000

Total

1141111All Schemes

390,000

All Schemes

1140111 Total pension beneficiaries in survivors' function

CORRECT
Scheme 1

Total

252,000
252,000

102,000

Scheme 1

All Schemes
Total

Total

342,000

Scheme 1252,000

Scheme 1
Total

492,000

To compile correctly the questionnaire each elementary item at all schemes level must show
the effective number of beneficiaries involved and the first item for which to use the information
on double counting between old-age and survivors' pensions, no matter if it arises at level of
one scheme or at level of one category per function, should be the item 1190110.
The correct treatment is showed in the second column for data at all schemes level. In thiscase the result of the checking is the same:
item 1130110+ item 1140110- item 1190110= 390,000+252,000-492,000=150,000
but it is not incoherent with the values indicated for two functions.


Check 5. Pay attention when the value reported under the code 1190110 is quite small
if compared to the values for the items 1130110 and 1140110; a small value might
imply that the largest majority of beneficiaries are receiving both types of pensions. In
this case it is more likely that the value might represent the number of double counted
beneficiaries.



Case D.2.1. When the value under the item 1190110 is equal to the sum of the totals
for the functions old-age and survivors', it is possible in infer that there are no cases ofpeople receiving pensions in both the functions. There is no double counting between
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item 1190110= item 1130110 + item 1140111


Case D.2.2. If there is double counting between the functions old age and survivors'
the difference between the sum of the totals for old-age function and survivors' function
and the value 1190110 should be positive:
item 1130110 + item 1140111- item 1190110> 0Case D.2.3. If the difference between the sum of the totals for old-age function(1130110 at "all schemes" level) and survivors' function (1140111 at "all schemes"
level) and the value in correspondence of the code 1190110 coincides with the total of
the survivors' function (1140111 at "all schemes" level), this implies all the pensioners
receiving a survivors' pension (normally a smaller group than old age beneficiaries)
receive also old-age pension.
item 1130110 + item 1140111-[item 1130110+ item 1140111-(double counting
between old-age and survivors' functions)] = item 1140111;(double counting between old-age and survivors' functions) = item 1140111;
Using set theory, if the red set contains the beneficiaries under the old-age function andthe blue set contains the beneficiaries under the survivors' function.

If the intersection between the two sets coincides with the survivors' set, this implies thesurvivors' set is contained in the set of old-age.
45C The only step in progressive vertical aggregation, when taking into account the double
counting between old-age and survivors' functions, is when calculating the item 1190110, first,
and 100000, after. The number of beneficiaries receiving both an old-age and a survivors'
pension should not be subtracted neither from any other total nor singularly from eachscheme's data.
Double counting in total number of pensioners: type 6
46

The total number of pensioners, previously indicated by the code 1000000, is defined as in § 9of this Appendix. Generally speaking, the number of the total of pension beneficiaries is notassumed to be equal to the sum of the beneficiaries of each pension category even though it
is obtained as aggregation of them.
Further difficulties are expected to appear for some countries, when double counting has to beeliminated at this final stage. In these cases, the value for total pensioners might be obtained
from other sources (e.g. administrative data).

47

Double counting between beneficiaries in disability and old-age functions does not need to beeliminated, if disability cash benefits paid after retirement age are recorded in the old-age
function under the old-age pensions as required in the methodology.
Still, double counting might arise between survivors' and disability pensions and between the
category partial pensions and other pension categories.

47B The last step in filling-in the questionnaire is the calculation of the total number of beneficiaries
receiving at least one pension, no matter of which type.

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APPENDIX III: Methodology of the module on pension beneficiaries

Type 6 of double counting has to be treated at this step with respect to the content of the celldefined "Total number of pension beneficiaries" (item 1000000).
In general, the code 1000000 at 'all schemes' level has to be obtained adding up the totals forthe four functions (1120110, 1130110, 1140111 and 1160113) but counting just once thepensioners that get more than one pension belonging to different functions (see step 5 inappendix III.6).
item 1000000= item 1120110 + item 1130110 + item 1140111 + item 1160113 - (double counting between disability, old-age, survivors' and unemployment
functions)This implies that:

Check 5: As the item 1000000 at "all schemes" level is obtained by construction after
the treatment of vertical double counting between items 1120110, 1130110, 1140111
and 1160113 at "all schemes" level, its value has to be smaller or equal than the sum of
the number of beneficiaries recorded for the four functions.
item 1000000 ≤ item 1120110+ item 1130110+ item 1140111+ item 1160113
ordiff. 1= item 1120110+ item 1130110+ item 1140111+ item 1160113- item
10000000Check 6: The difference between the sum of the number of beneficiaries recorded forthe four functions and the item 1000000 is always greater or equal to the difference
between the sum of the number of beneficiaries recorded for the functions old-age andsurvivors’ and the item 1190110:
diff. 2 = item 1130110 + item 1140111- item 11901100diff. 1 diff. 2

If the value under the item 1190110 is smaller than the sum of the values for the twofunctions old-age and survivors’
diff. 2 = item 1130110 + item 1140111- item 1190110 > 0 there is double counting at least between old-age and survivors' functions (seeabovecomments to type 5)then the item 1000000 should be smaller than the sum of the total beneficiaries for the fourfunctions:diff. 1= item 1120110+ item 1130110+ item 1140111+ item 1160113- item
1000000> 0 there is double counting between disability, old-age, survivors' andunemployment
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APPENDIX III: Methodology of the module on pension beneficiaries

Case D.2.4: If it is verified that the difference diff.2 is greater than zero (it implies there
is at least double counting between the two functions old-age and survivors') then apositive difference of the values for diff.1 and diff. 2 will evaluate the double counting
between functions other than old-age and survivors:diff. 1-diff. 2> 0 (double counting between disability, old-age, survivors' and unemployment
functions) > (double counting between old-age and survivors' functions)
 there is double counting between functions other than old-age and survivors



Case D.2.5: If the value under the item 1190110 corresponds to the total value of the
Old-age function and the value under the item 1000000 is obtained as the sum of thevalues for the functions disability (1120110) and old-age (1130110): the two information
together imply that all the people receiving a survivors' pension receive also an old age
pension and that there is no double counting between disability and survivors' pensions(if it is confirmed no double counting between old age and disability).

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APPENDIX III: Methodology of the module on pension beneficiaries

5A Theoretical example of the questionnaire (yellow cells
indicate compulsory information)

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APPENDIX III: Methodology of the module on pension beneficiaries

6A Theoretical example of performing gradual aggregation
This is the example for a hypothetical country in which there are only two pension schemes: scheme
1 and scheme 2. The available information can be organized in the following sets:
A. Scheme 1:
1.000 people receive a first benefit classified as NMT beneficiaries receiving early
retirement benefits for labour market reasons (item 1161113)



400 people receive a second benefit classified as NMT beneficiaries receiving early
retirement benefits for labour market reasons (item 1161113)



300 people receive both the benefits classified as NMT beneficiaries receiving early
retirement benefits for labour market reasons (item 1161113)
B. Scheme 1:


5.000 beneficiaries receive a disability pension (item 1121111)



330.000 beneficiaries receive an old age pension (item 1131111)



60.000 beneficiaries receive an anticipated old age pension (item 1131112)

252.000 beneficiaries receive a survivors' pension (item 1141111)[including
beneficiaries whose age is both above and below the reference retirement age]

Scheme 2:

3.000 beneficiaries receive a NMT disability pension (item 1121111)



2.000 beneficiaries receive a MT disability pension (item 1122111)



40.000 beneficiaries receive an old age pension (item 1131111)



10.000 beneficiaries receive a survivors' pension (item 1141111)[including
beneficiaries whose age is both above and below the reference retirement age]

1.200 people receive a benefit classified as NMT beneficiaries receiving early
retirement benefits for labour market reasons (item 1161113)

C. Both in scheme 1 and 2:
2.000 beneficiaries receive a NMT disability pension (item 1121111) from both theschemes;

40. 000 beneficiaries receive an NMT old age pension (item 1131111) from both theschemes;

10.000 beneficiaries receive a NMT survivors' pension (item 1141111) from both theschemes;

500 beneficiaries receive an NMT early retirement benefit for labour market reasons(item 1161113) from both the schemes.

D. Means testing:1000 beneficiaries receive both an NMT and MT disability pension (by scheme 2)
E. Old age function:
In the pension system is not possible to receive at the same time an old-age and an
anticipated old-age pension
F. Between functions:

150.000 beneficiaries receive both an old-age and a survivors' pension

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APPENDIX III: Methodology of the module on pension beneficiaries

No beneficiary receives both a disability and an old-age pension



3.000 beneficiaries receives both disability and survivors' pension



No beneficiary receives at the same time the three pensions: disability, survivors' andold ageFirst step: fill in each category cell at single scheme level
The aim of this first step is to fill in the relevant cells for the two schemes.
At "single scheme" level each item has to show the effective number of beneficiaries involved.
Only type 1 of double counting has to be treated at this stage for all those cases in which under morethan one benefit is included one heading (for each scheme, the number of beneficiaries, not of
benefits, under the same heading/item has to be calculated).
The information sets A and B are needed.
Table 1: First step results
All Schemes

Scheme 1

Scheme 2

Total

Total

Total

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1000000 Total pension beneficiaries (1120110, 1130110, 1140111, 1160113)

1120110 Total pension beneficiaries in disability function (1120111, 1120112)
1120111 Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
1120112
capacity to work

11211111121112112211111221121130110

Non Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work
Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work

5,000

3,000

2,000

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

Total pension pension beneficiaries in old age function (1130111,
1130112, 1130113)

1130111 Old-age pension beneficiaries
1130112 Anticipated old age pension beneficiaries
1130113 Partial pension beneficiaries

113111111311121131113113211111321121132113

Non Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries
Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries

330,000

40,00060,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1140111 Total pension beneficiaries in survivors' function

11411111142111

Non Means-tested
Survivors' pension beneficiaries
Means-tested
Survivors' pension beneficiaries

252,000

10,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

Total pension beneficiaries in unemployment function (receiving
1160113early retirement benefits for labour market reasons)11611131162113

Non Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons
Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons

1,100

1,200

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1190110 Total beneficiaries in old-age and survivors' functions

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APPENDIX III: Methodology of the module on pension beneficiaries

Second step: fill in each category cell at 'all schemes' level
As a second step, data at "all schemes" level for the elementary items have to be provided.
Double counting to be treated at this step is double counting between beneficiaries of a typeof pension across all the providing schemes
To complete this step, the information set C is needed: i. e. information on pensioners getting
pensions in the same category from different schemes.

Table 2: Second step results
All Schemes

Scheme 1

Scheme 2

Total

Total

Total

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1000000 Total pension beneficiaries (1120110, 1130110, 1140111, 1160113)

1120110 Total pension beneficiaries in disability function (1120111, 1120112)
1120111 Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
1120112
capacity to work

11211111121112112211111221121130110

Non Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work
Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work

6,000

5,000

2,000

3,000

2,000

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

Total pension pension beneficiaries in old age function (1130111,
1130112, 1130113)

1130111 Old-age pension beneficiaries
1130112 Anticipated old age pension beneficiaries
1130113 Partial pension beneficiaries

113111111311121131113113211111321121132113

Non Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries
Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries

330,000

330,000

60,00060,00040,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1140111 Total pension beneficiaries in survivors' function

11411111142111116011311611131162113

Non Means-tested
Survivors' pension beneficiaries
Means-tested
Survivors' pension beneficiaries

252,000

252,000

10,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

Total pension beneficiaries in unemployment function (receiving
early retirement benefits for labour market reasons)Non Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons
Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons

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1,800

1,100

1,200

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APPENDIX III: Methodology of the module on pension beneficiaries

At this stage of calculation we have:
Item 1121111=5.000+3.000-2.000=6.000
Item1131111=330.000
Item 1141111=252.000
Item 1161113=1.100+1.200-500=1.800

Items 1121111 and 1161113 are obtained with a horizontal treatment of double counting (type 2,
double counting between schemes). This result is shown in table 2.

Third step: fill in each category's total cell at all schemes level
As a third step, data at "all schemes" level for the seven categories' totals (obtained through theaggregation of the subcategories non means-tested and means tested of any pension benefit) haveto be provided. To complete this step, the information set D is needed: i. e. information on
pensioners getting both non means and means-tested pensions for the same category.
In this hypothetical country there is means-testing is only for disability pensions.
Results of steps three are shown in table 3.

Fourth step: fill in each function cell at all schemes level
As a fourth step, data at "all schemes" level for the four functions have to be provided.
To complete this step, the information set E is needed: i. e. information on pensioners getting morethan one pension included under disability and old-age function.
In this example there is no need for the treatment of type 4.1 or 4.2 of double counting, because in
our system only one category of pension under the disability function is provided and, as most of thetimes there is, by definition, no double counting between the two categories under the old-age
function (old-age and anticipated old-age).
Results of step four are shown in table 4.
Fifth step: fill in the item 1190110 at all schemes level
To obtain the total number of pension beneficiaries in old age and survivors’ functions at all schemes
level, the first line of information set F, on pensioners getting more than one pension in different
functions, has to be used.
Item 1190110 = 390.000+252.000-150.000=492.000
Sixth step: fill in the item 1000000 at all schemes level
To obtain the total number of pension beneficiaries at all schemes level, the other lines but the firstone of the information set F, on pensioners getting more than one pension in different functions, has
to be used.
Item 1000000 = 7.000+1.800+492.000-3.000= 497.800
The results of steps 5 and 6 are available in table 5.

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APPENDIX III: Methodology of the module on pension beneficiaries

Table 3: Third step results
All Schemes

Scheme 1

Scheme 2

Total

Total

Total

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1000000 Total pension beneficiaries (1120110, 1130110, 1140111, 1160113)

1120110 Total pension beneficiaries in disability function (1120111, 1120112)
1120111 Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
1120112
capacity to work

11211111121112112211111221121130110

Non Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work
Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work

113211111321121132113

6,000

5,000

2,000

3,000

2,000

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

Total pension pension beneficiaries in old age function (1130111,
1130112, 1130113)

1130111 Old-age pension beneficiaries
1130112 Anticipated old age pension beneficiaries
1130113 Partial pension beneficiaries

1131111113111211311137,000

Non Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries
Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries

330,000
60,000330,000

330,000

60,00060,00040,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1140111 Total pension beneficiaries in survivors' function

11411111142111

Non Means-tested
Survivors' pension beneficiaries
Means-tested
Survivors' pension beneficiaries

252,000

252,000

10,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

Total pension beneficiaries in unemployment function (receiving
1160113early retirement benefits for labour market reasons)11611131162113

Non Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons
Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons

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1,800

1,100

1,200

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APPENDIX III: Methodology of the module on pension beneficiaries

Table 4: Fourth step results
All Schemes

Scheme 1

Scheme 2

Total

Total

Total

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1000000 Total pension beneficiaries (1120110, 1130110, 1140111, 1160113)

1120110 Total pension beneficiaries in disability function (1120111, 1120112)

7,000

1120111 Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
1120112
capacity to work

7,000

11211111121112112211111221121130110

Non Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work
Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work

Total pension pension beneficiaries in old age function (1130111,
1130112, 1130113)

1130111 Old-age pension beneficiaries
1130112 Anticipated old age pension beneficiaries
1130113 Partial pension beneficiaries

113111111311121131113113211111321121132113

Non Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries
Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries

1140111 Total pension beneficiaries in survivors' function

11411111142111116011311611131162113

Non Means-tested
Survivors' pension beneficiaries
Means-tested
Survivors' pension beneficiaries

Total pension beneficiaries in unemployment function (receiving
early retirement benefits for labour market reasons)Non Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons
Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons

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6,000

5,000

2,000

3,000

2,000

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

390,000

330,000
60,000330,000

330,000

60,00060,00040,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

252,000

252,000

252,000

10,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1,800

1,800

1,100

1,200

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APPENDIX III: Methodology of the module on pension beneficiaries

Table 5: Final results
All Schemes

Scheme 1

Scheme 2

Total

Total

Total

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1000000 Total pension beneficiaries (1120110, 1130110, 1140111, 1160113)

1120110 Total pension beneficiaries in disability function (1120111, 1120112)

7,000

1120111 Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
1120112
capacity to work

7,000

11211111121112112211111221121130110

Non Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work
Means-tested
Disability pension beneficiaries
Beneficiaries receiving early retirement benefits due to reduced
capacity to work

Total pension pension beneficiaries in old age function (1130111,
1130112, 1130113)

1130111 Old-age pension beneficiaries
1130112 Anticipated old age pension beneficiaries
1130113 Partial pension beneficiaries

113111111311121131113113211111321121132113

Non Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries
Means-tested
Old-age pension beneficiaries
Anticiped old age pension beneficiaries
Partial pension beneficiaries

1140111 Total pension beneficiaries in survivors' function

11411111142111116011311611131162113

Non Means-tested
Survivors' pension beneficiaries
Means-tested
Survivors' pension beneficiaries

6,000

2,000

2,000

Scheme 1

Scheme 2

Total

Total

Total

390,000

330,000
60,000330,000

330,000

60,00060,00040,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

252,000

252,000

252,000

10,000All Schemes

Scheme 1

Scheme 2

Total

Total

Total

1,800

Non Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons
Means-tested
Beneficiaries receiving early retirement benefits for labour market
reasons

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3,000

All Schemes

Total pension beneficiaries in unemployment function (receiving
early retirement benefits for labour market reasons)

1190110 Total beneficiaries in old-age and survivors' functions

5,000

1,800

1,100

1,200

All Schemes

Scheme 1

Scheme 2

Total

Total

Total

492,000142

APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)

APPENDIX IV: Methodology of the module
on net social protection benefits (restricted
approach)
1 Introduction
1

According with the decision taken at the April 2009 Working Group meeting on net social
benefits, Eurostat decided to implement the net benefits module according to the so-called
restricted approach, explained in the following. The module on net social protection benefits
should be obtained using this approach, in order to have the same population of beneficiariesof the gross social protection benefits collected in the ESSPROS Core System.

1.1 BACKGROUND
2The ESSPROS Core system consists of a stable, annually collected set of data on the receipts
and expenditures of social protection schemes in the European Union. ESSPROS data arecollected according to the Regulation 458/2007 and two supplementary Commission
Regulations. The first Regulation provides the basis for the development of a module on net
social protection benefits. Following this provision, other two Commission Regulations wereintroduced as legal basis for the module on net social protection benefits.

3

The methodology of the Core system is defined in the first two parts of this manual, which is
the reference document for the four Commission Regulations implementing the EP andCouncil ESSPROS Regulation. It contains all detailed definitions and classifications for the
ESSPROS Core system. This appendix dedicated to the module on net social protection
benefits (restricted approach) should be seen as an extension to the first two parts, following
all definitions given therein and providing additional definitions and clarifications where
necessary.

4

The ESSPROS Core system collects data on the expenditure on social protection benefits
provided by public and private bodies to individuals and households without any deduction oftaxes and other obligatory levies payable on social benefits by beneficiaries. This expenditureis therefore considered as gross. It represents the value of social benefits disbursed byresident social protection schemes and the value of benefits received in cash or in kind by
beneficiaries.

5

However, the cross-country comparability of data on gross expenditure is limited by the factthat in some cases the benefits paid to recipients are liable to taxes on income and/or social
contributions, whilst in others they are not. Taxes and social contributions levied on social
benefits have the effect of reducing the gross expenditure of general government on social
protection and reducing the extent to which social benefits increase the disposable income ofrecipients.

6

The aim of the ESSPROS module on net social protection benefits is to collect information thatmeasures the impact of the fiscal system on gross expenditure and thereby provide data on
net social protection expenditure that are more comparable between countries.

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APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)

1.2 THE RESTRICTED AND ENLARGED APPROACHES TO MEASURING NET
SOCIAL PROTECTION BENEFITS
7

Article 2 of the ESSPROS Regulation (EC) No 458/2007 of the European Parliament and of
the Council defines net social protection benefits to be “the value of social protection benefits
excluding taxes and social contributions paid by the benefits’ recipients complemented by thevalue of fiscal benefits” where fiscal benefits are defined to be “social protection provided in
the form of tax breaks that would be defined as social protection benefits if they were provided
in cash, excluding tax breaks promoting the provision of social protection or promoting private
insurance plans”. This definition marks out two separate elements to net benefits.

8

The first – social protection benefits less taxes and social contributions paid on those benefits
by their recipients – implies no change to the scope of the Core system. It represents a strict
conversion from gross expenditure to net expenditure after taking into account the value oftaxes and social contributions paid on gross benefits. By definition, the population of recipientsof net and gross benefits must be the same. This is known as the “restricted approach” tomeasuring net benefits.

9

The second element – fiscal benefits – potentially enlarges the scope of the net benefits
module compared to the Core system because it includes the value of social benefits
implemented solely through the fiscal system, which are not included in the Core system (withthe exception of payable tax credits). Fiscal benefits reduce the amount of taxes and/or social
contributions paid on all forms of income (e.g. from employment) and therefore increase thedisposable income of beneficiaries in addition to the social benefits recorded in the Coresystem. Moreover, fiscal benefits may accrue to persons who receive no social benefits paid in
cash or in kind who are therefore not members of the population of benefit recipients coveredby the Core system. Adding the value of fiscal benefits to the value of net benefits according to
the restricted approach is known as the “enlarged” approach to measuring net benefits (23).
The two approaches can be summarised as follows (24):
F.1 Net social benefits (restricted) = Gross social benefits – Taxes & social contributions paid
on benefits by recipients

F.2 Net social benefits (enlarged) = Net social benefits (restricted) + Fiscal benefits

1.3 DEVELOPMENT
APPROACH)

OF

THE

NET

BENEFITSMODULE(RESTRICTED

10

In accordance with the timetable laid out in Article 5 of the ESSPROS Regulation (EC) No
458/2007 of the European Parliament and of the Council, Eurostat launched in 2007 a
programme of work to implement a pilot collection of data on net social protection benefits
referring to 2005.

11

Following consultation with a Task Force meeting in January 2008, Eurostat decided to
implement the net benefits module according to the restricted approach.

(23) Note that part of the value of fiscal benefits is in fact included in the restricted approach since any relief on the levies paid on income
from social benefits will be accounted for in the actual value of taxes and social contributions deducted from the gross benefits. See
the section on residual fiscal benefits.
(24) Both definitions are given for matter of clarification. According to the decision taken by Member States, the approach to be used forcompiling net social protection benefits is the restricted approach. The enlarged approach is at an experimental stage only.

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APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)12

A pilot data collection of net social protection benefits according to the restricted approach waslaunched in April 2008 for all EU-27 countries plus Iceland and Norway, with a deadline forsubmission of data by the end of October 2008. Preliminary results were presented to a
Working Group fully dedicated to net benefits in April 2009. In accordance with the procedure
outlined in Article 5.2 of the regulation, the meeting voted in favour of progressing work
towards the implementation of the module on net social protection benefits (restricted
approach) as a routine data collection.

2 The definition of net social protection benefits (restricted
approach)
2.1 THE CONCEPTS OF GROSS AND NET SOCIAL PROTECTION BENEFITS
13

Expenditure recorded in the Core system (25) covers gross social protection benefits(paragraph 99, 100 and 129 of the first part of this manual)– it refers to the value of social
benefits disbursed by general government before the deduction of any taxes or social
contributions paid on social benefits by their recipients.

14

The ESSPROS module on net social protection benefits (restricted approach) records social
benefits after the deduction of taxes or social contributions paid on cash social benefits by
their recipients.
Net social benefits (restricted) = Gross social benefits – Taxes & social contributions
paid on benefits by recipients

2.2 OBLIGATORY LEVIES: TAXES AND SOCIAL CONTRIBUTIONS
15

The net benefits module (restricted approach) determines the final net value of social benefits
by deducting from gross social benefits the part of the combined value of two forms ofobligatory levy applied by general government to the income of fiscal units that relates to liable
cash social benefits:(i)Taxes on income(ii)Social contributions

2.3 DEFINITIONS
16

Taxes on income refers to taxes on individual or household income from employment,
property, entrepreneurship, social benefits, etc., including taxes deducted by employers (payas-you-earn taxes) (26). (In the remainder of the document Taxes on income are often referred
to simply as taxes.)

17

Social contributions refers to compulsory social contributions paid by protected persons as
defined in this manual, first part, par. 75.

(25) The ESSPROS Core system collects data on the expenditure of social protection schemes broken down into four main categories:
social benefits, administration costs, transfers to other schemes and, finally, other expenditure.
(26) See ESA definition of Taxes on income (D.51)

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Social contributions refer only to compulsory contributions paid by employees, self-employedpersons and non-employed persons. Non-compulsory contributions to private schemes are notincluded.

19

Social contributions in the net benefits module should never include employers' contributions either actual or imputed - since these are not levies applied to income from social benefits
actually received by individuals or households.

19bis Taxes and social contributions in the net benefits module should not take into account the
reduction in taxation provided by payable tax credits reported in the ESSPROS Core System,
to do so would introduce double counting.

2.4 PRINCIPLES OF VALUATION20

For the assessment of the taxes and social contributions payable by fiscal units, income fromliable social benefits is typically cumulated with other sources of income (primarily from
employment) to form a tax base (or social-contribution base). Since the final liability isdetermined by the value of the tax base as a whole, the liabilities cannot be attributed directly
to particular components of the tax base and are therefore considered to be distributed
according to the proportion each income component represents within the tax base.

21

The part of the total liability related to benefits is therefore calculated as:Taxes on benefits = ( Value of benefits liable to taxes / Tax base ) * Total tax payableSocial contributions on benefits = ( Value of benefits liable to social contributions /Social contribution base ) * Total social contributions payable22

The value of taxes and social contributions to be taken into account should always take into
account any post year-end adjustments and, where relevant, the impact of any fiscal benefits(excluding payable tax credits reported in the ESSPROS Core System) as they apply to
liabilities derived from social benefits. In the case that this is not possible, residual fiscal
benefits may be reported as complementary amounts (see below).

23

Social benefits that are not liable to taxes or to social contributions do not form part of a tax
base or social contribution base. The net value of benefits not liable to levies will always be thesame as the gross value.

2.5 FURTHER CLARIFICATIONS
24

Withheld taxes and social contributions are taxes and social contributions due on income fromsocial benefits that are calculated in advance of payment, withheld by the payment authorityand paid directly to the collection authority (either tax authority or another social protection
scheme) on behalf of the recipient. Withheld taxes and social contributions are included in the
gross benefits paid to recipients reported in the Core System and should therefore be taken
into account when calculating taxes and social contributions paid on social benefits.

25

Re-routed social contributions, which are not included in gross benefits paid to recipients
reported in the Core System but transferred directly to the appropriate social protection
scheme, should not be taken into account when calculating taxes and social contributions paid
on social benefits.

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2.6 RESIDUAL FISCAL BENEFITS
26

Fiscal benefits are social protection provided in the form of tax breaks that would be defined associal protection benefits if they were provided in cash, excluding tax breaks promoting theprovision of social protection or promoting private insurance plans (27).

27

A tax break is an advantage granted to fiscal units in the form of a total or partial reduction in
the compulsory levies applied by general government. Tax breaks can take the form of a tax
allowance, exemption, or deduction — which is subtracted from the tax base; of a reduced tax
rate – which cuts the tax liability derived from the tax base; or of a tax credit — which is
subtracted directly from the tax liability otherwise due by the beneficiary household or
corporation.
There are two forms of tax credit:- Non-payable tax credits, also known as wastable or non-refundable tax credits, are limited invalue to the value of the tax liability. As such, non-payable tax credits can only ever be
granted to taxpayers with a non-zero tax liability.

- Payable tax credits, also known as non-wastable or refundable tax credits, are not limited
and can exceed the value of any tax liability, including a liability of zero, and may therefore
be granted to non-taxpayers. The amount of any payable tax credit that exceeds the tax
liability is paid directly to the beneficiary in cash. In some cases, such credits may even be
paid fully in cash.
Fiscal benefits in the form of payable tax credits are, as per paragraphs 112bis and 112ter inPart 1, included in full in the ESSPROS Core System while all other forms of fiscal benefit are
excluded from the Core System and dealt with in the Net modules (the existing restricted
approach module and the planned enlarged approach module).
28

Fiscal benefits increase the net disposable income of fiscal units by reducing taxes and otherobligatory levies that they would otherwise have to pay. Fiscal benefits give relief to levies paidon all forms of income (not just benefits) and, in some cases, to indirect taxes on expenditure(e.g. reduction in VAT). They may also be granted to persons that do not receive any social
benefits paid in cash or in kind. The main value of fiscal benefits is therefore outside the scopeof the restricted approach to net social protection benefits and should not be included.

29

Fiscal benefits typically take the form of adjustments to the regular fiscal system and the valueof the relief that applies to levies payable on social benefits should therefore be taken into
account in the assessment of the actual taxes and social contributions paid on social benefits.
Exceptionally, if the impact of a fiscal benefit is not taken into account in this assessment thenthe value of net benefits should be complemented by the residual value of the fiscal benefit. In
this case the conceptual definition of net benefits (paragraph 9) is modified to make a practicaldefinition as follows:
F.3 Net social benefits (restricted) = Gross social benefits – Taxes and social contributions
paid on cash benefits by recipients + Residual fiscal benefits

30

A residual fiscal benefit is the fraction of the total value of a fiscal benefit that relates to relief
on levies applied to social benefits (as opposed to the part that relates to relief on levies
applied to all other forms of income, which is outside the scope of the restricted approach).

(27) Article 2 of the ESSPROS Regulation (EC) No 458/2007.

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APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)30bis Fiscal benefits in the form of payable tax credits are always outside the scope of the restricted
approach as these are included in the ESSPROS Core System. This means that their impact
should not be taken into account in the taxes and social contributions paid on cash benefits byrecipients or in residual fiscal benefits.
31

Fiscal benefits that relate to relief on indirect taxation are always outside the scope of therestricted approach.

32

A tax break that is deducted directly from the tax liability and is given to the beneficiaries of acertain social protection benefit should be treated consistently with its actual role in the fiscal
system. In this respect, two main cases can be envisaged:a.

the tax break is alternative to other tax breaks (i.e. the tax unit, in case of other sourcesof income, can choose among different tax breaks, typical of each source of income, theone that is more convenient for him);b.

the tax break is added to the standard tax breaks normally applied (i.e. the standard
ones apply and this tax break is additional and specific for the beneficiaries of that
benefit).

In the first case, in the estimation of the net social protection benefits, the tax break should asa rule be considered like a tax break not related to the benefit (except for the fact that thevalue is different) and covering all the sources of income. Conversely, in the second case, thetax break should decrease only the taxation on the benefit for which it is allowed. Borderline
cases can be treated according to countries’ choice.

3 Accounting structure and classifications in the net social
benefits module
Overview of the Net social protection benefits module (restricted approach)

LeviesTaxes on income
Social contributions

By function:
Sickness/ health, disability, old age, survivors, family/children,
unemployment, housing(1), social exclusion
By type:
Cash benefits (periodic, lump sum)
By characteristic:Means-tested & non means-tested

Residual fiscal
benefits(where relevant)By function:
Sickness/health care, disability,
old age, survivors,family/children, unemployment,
housing(1), social exclusion.

(1) Housing benefits are largely in the form of benefits in kind and are therefore potentially not affected by taxation in the
restricted approach.

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3.1 INTRODUCTION
33

Net social protection benefits (restricted approach) are derived from gross social benefits lesslevies (taxes and social contributions) paid on cash social benefits by recipients plus (where
relevant) residual fiscal benefits (Table A).

34

The simplest way of determining net social protection benefits should be their direct measure.
This could be obtained by collecting data on the amount of taxes and social contributions
actually paid by recipients on the cash gross social protection benefits received and applying
the F.1 (or eventually the F.3, if there is any residual fiscal benefit).

35

In order to summarise the information on net social protection benefits, it would then be
possible to determine ex post the average tax and social contribution rates that are applied to
ESSPROS benefits by scheme and/or by function. In most of the countries data sources do
not allow to obtain such a direct estimation.

36

Where direct measures are not available the application of average itemised tax and social
contribution rates to gross expenditure on social protection benefits (like in F.4) allows theestimation of the module.

37

This chapter provides an overview of the accounting structure within which data are recorded
in order to derive the final value of net benefits.

Table A: Derivation of net expenditure on social protection benefits (restricted approach)
Gross expenditure on cash social benefits (from the Core system)
LESS
Levies payable on cash social benefits
1. Taxes on income
2. Social contributions
PLUS (WHERE RELEVANT)
Complementary amounts
3. Residual fiscal benefits

3.2 CALCULATION OF TAXES AND SOCIAL CONTRIBUTIONS
38

In the ESSPROS net social protection module, the value of obligatory levies to be deductedfrom gross expenditure is calculated from tax and social contribution rates applied to the grossvalue of each benefits such that:
F.4 Net social benefits (after deduction of levies) = Gross social benefits * (1 – AITR –AISCR)
Where AITR = Average itemised tax rate and, AISCR = Average itemised social contribution
rate.

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APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)3.2.1 Average itemised tax rates (AITRs)
39

The AITR for a benefit (or group of benefits) is defined as the sum of taxes paid on that benefit
by recipients divided by the total income from that benefit (i.e. gross benefits received). A
social benefit that is not liable to taxes will always have an AITR of zero.

AITRi  tu1,n TIi ,tu tu1,n I i ,tuI is the amount of income of type i , TI is the amount of tax paid on that income, i is thetype or category of income, tu is a fiscal unit with income of type i , and n is the numberof fiscal units in the sample with income of type i .
3.2.2 Average itemised social contribution rates (AISCRs)
40

The AISCR for a benefit (or group of benefits) is defined as the sum of social contributions
paid on that benefit by recipients, divided by the total income from that benefit (i.e. grossbenefits received). A social benefit that is not liable to social contributions will always have an
AISCR of zero.

AISCRi  tu 1, n SCi ,tu tu 1, n I i ,tuI is the amount of income of type i , SC is the amount of social contributions paid on that
income, i is the type or category of income, tu is a fiscal unit with income of type i , andn is the number of tax units in the sample with income of type i .
3.2.3 Practical calculation of AITRs and AISCRs
41

The subchapter describes the typical method used by compilers to obtain AITRs and AISCRs.
This method is the minimum requirement in order to achieve acceptable figures on net social
protection benefits. On the basis of availability of more detailed information, more precise
methods can be applied by the countries provided that:a.

they respect the definitions set in this manual for the restricted approach;b.

they improve the accuracy of the final results;c.

and, they preserve the comparability among countries.

42

In practice, taxes and social contributions are levied on groups of income of different types.
For example, income from (taxable) social benefits is typically aggregated with income from
employment and other sources for the assessment of liability to taxes on income.

43

A tax base or social contribution base refers to the sum of all income, irrespective of its
source, that is subject to the same rules of liability. The income of any fiscal unit may be
divided into one or more tax or social contribution bases.

44

In the case that particular social benefits are subject to distinct liability rules then AITRs and/or
AISCRs should be calculated on a separate tax or social contribution base. For example, if
selected benefits are subject (in the final assessment) to flat-rate levies independent of otherincome (typically taxed progressively) then income from these benefits should be aggregatedESSPROS Manual and user guidelines — 2022 edition

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APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)in a separate tax or social contribution base for which the AITR/AISCR will be the flat-rate
fixed by regulation. The income from these benefits will then normally be excluded from the tax
or social contribution base used to calculate levy rates for the remaining income, though there
may be exceptions – for example in the case that the income reduces the tax threshold for the
regular assessment.
45

Note that it is also possible for a social benefit to be included in two tax bases – for example if
there are taxes on income levied by regional government as well as by national government.
In this case the tax rates applicable to each tax base should be summed to generate theoverall tax rate for that benefit.

46

In the typical case that obligatory levies are applied to income aggregated from multiple
sources it is not feasible or realistic to prioritise the application of levies and then measure, foreach recipient, the amounts paid in respect of a particular social benefit. The net benefits
module therefore treats all income within the same tax or social contribution base equally. As aresult, for a fiscal unit that receives one or more benefits liable to taxes on income, the tax rateapplicable to each of those benefits is the same as the overall rate of taxes paid by the fiscal
unit (total tax paid / tax base). Benefits received by the same fiscal unit that are not liable totaxes do not form part of a tax base and will always have an AITR of zero. The same applies
to social contributions.

47

For a fiscal unit receiving n social benefits liable to taxes on income andare not liable to taxes:
Taxable benefits 1 to n:y social benefits thatTRi 1  TRi 2    TRi n  TR

Non-taxable benefits n+1 to y:

TRi  n 1  TRi  n  2    TRi  n  y  0
TRi is the tax rate for social benefit i , TR is the overall tax rate for the fiscal unit (total tax
paid / tax base)48

For each benefit or group of benefits, the final AITR or AISCR is then calculated from tax orsocial contribution rates for each fiscal unit receiving that benefit (including those that pay notaxes or social contributions on the benefit because their total income is below the threshold at
which levies become payable), weighted by the amount of benefit received by the fiscal unit
and divided by the total amount of benefit received by all fiscal units (i.e. gross benefits):

AITRi   TRi ,tu * I i ,tu / tu1,n I i ,tu
AITRi is the average itemised tax rate for social benefit i , TRi ,tu is the tax rate for social
benefit i for fiscal unit tu and I i ,tu is the income from social benefit i for the fiscal unit tu
49

Note that when working with tax rates from individual fiscal units or sample groups of similar
fiscal units then the weighting must be by amount of benefit received and not by population
size since this will give incorrect results.

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3.3 APPLICATION OF TAX AND SOCIAL CONTRIBUTION RATES
50

Final values of net social protection benefits are derived by collecting tax and social
contribution rates for each individual benefit and applying these to the appropriate grossvalues from the ESSPROS Core data. Net values at the detailed level are then aggregated byfunction and by main type of benefit (mean-tested, non means-tested, periodic, lump-sum,etc.) in exactly the same way as in the Core system.

51

The collection of tax and social contribution rates at the most detailed level allows different tax
and social contribution rates to be applied to each benefit disbursed by a scheme or to similar
benefits provided by different schemes. This is important because even when similar benefits
are subject to the same liabilities, if they are issued to different groups of recipients that havedifferent income characteristics then the effective tax/social contribution rates applicable could
vary.

52

In the case that it is not practical (or worthwhile in terms of cost/benefit) to collect information
on taxes and social contributions at this level of detail it is acceptable for AITRs and AISCRs to
be calculated at a more aggregated level and applied to each of the individual
benefits/schemes within that aggregate. For example, rates may be applied to all benefits
within a scheme or to all benefits of a particular type (across schemes). However, the reliabilityof results may be compromised if rates are applied to groups of benefits that are issued torecipients with very different income and household characteristics or which are subject todifferent liability regimes and rates should always be provided at a level of detail that ensures
good quality results.

53

When rates are calculated at an aggregated level and applied to each benefit within theaggregate, it is important to ensure the correct treatment of any benefits within the group thatare not liable to taxes by the application of a zero rate to relevant benefits.

54

In the case that it is not practical (or worthwhile in terms of cost/benefit) to collect information
on taxes and social contributions for AITRs and AISCRs on an annual basis, the technique of
applying AITRs and AISCRs on a biennial basis can be followed.
In such a case net data referred to year N+1 are obtained by applying to gross data of year
N+1 the AITRs and AISCRs calculated for year N.
This technique can be followed provided that:
1. in the country the rules of taxation for social protection benefits are stable over thetwo years involved;
2. AITRs and AISCRs for year N are calculated as provided for in the above
paragraph 3.2;
3. the reliability of results is not compromised.

55

In case of regular application of the technique of AITRs and AISCRs on a biennial basis,corrections to the AITRs and to AISCRs calculated for year N are allowed before theapplication of the rates to the gross data of year N+1.
These corrections can be introduced by the country provided that the quality of the final results
for year N+1 is improved.

3.4 COMPLEMENTARY AMOUNTS: RESIDUAL FISCAL BENEFITS
56

While fiscal benefits in the form of payable tax credits are reported in full in the ESSPROSCore System, the major part of fiscal benefits belongs only to the enlarged approach tomeasuring net social protection benefits (paragraph 9). In the restricted approach, the part of
the total value of fiscal benefits that pertains to reduced liabilities on social benefits should
normally be taken into account in the levies calculated from AITRs and AISCRs. However,when this is not the case, any further amounts accruing to recipients as a result of reduced

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APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)liabilities on benefits can be reported as residual fiscal benefits. Amounts reported are thenadded to the net value after deduction of levies to give a final value of net benefits.
3.4.1 Calculation of residual fiscal benefits
57

The subchapter describes the typical method used by compilers to obtain residual fiscal
benefits in case they are not accounted for in the levies calculated from AITRs and AISCRs.
This method is the minimum requirement in order to obtain acceptable figures on net social
protection benefits. On the basis of availability of more detailed information, more precise
methods can be applied by the countries provided that:a.

they respect the definitions set in this manual for the restricted approach;b.

they improve the accuracy of the final results;c.

and, they preserve the comparability among countries.

58

The calculation of residual fiscal benefits shall always be limited to the portion of fiscal benefits(excluding payable tax credits) that is lowering the taxes or social contributions paid on social
protection benefits.

59

A fiscal benefit has the effect of reducing the tax and/or social contribution liabilities of a fiscal
unit and the value should be calculated using the revenue forgone method (28). In the typicalcase, the net benefits module applies the relief provided by fiscal benefits equally to thedifferent components of the liabilities due, similar to the application of levies to different
sources of income. A residual fiscal benefit can therefore be calculated as follows:
A fiscal unit tu has income I (tax base) that includes income from social benefits (SB) andother sources (O):I tu  I tu, SB  I tu,OT

The total tax paid by the fiscal unit tu is reduced by the total value of a fiscal benefit
has not been included in the tax paid.
The value of the residual fiscal benefit
benefits) is:

RFtu

Ftu

that

(i.e. the part that relates to income from social

RFtu  Ftu * I tu,SB / I tu

The final value of the residual fiscal benefit to be reported is then the sum of the value for eachfiscal unit that receives the benefit:tu 1, n60

RFtuThis will not be an easy value to calculate, which is an additional reason for recommendingthat the impact of fiscal benefits is taken into account in the calculation of AITRs and AISCRs.
If residual fiscal benefits have to be calculated it may be simpler to make an estimation by
applying the share of liable social benefits in the total tax or social contribution base of the
population to the total value of the fiscal benefit.

(28) The revenue foregone method measures the amount by which the revenues of the tax (or social contribution) collecting authority are
reduced as a result of the application of a fiscal benefit and assuming no change in behaviour of the tax-payer. In other words, itmeasures the value of taxes or social contributions that would have been received by the collecting authority had the fiscal benefit notbeen applied.

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APPENDIX IV: Methodology of the module on net social protection benefits (restricted approach)61

If a certain fiscal break is designed to reduce the taxes and/or social contributions paid by thefiscal units on a specific social protection benefit (say j) and if it is not taken into account in thecalculation of AITRs and AISCRs; the amount of the corresponding residual fiscal benefit RFj
is equal to the value of the allowed fiscal break calculated on the set of fiscal units receivingthat social protection benefit (say FUj):

RF j   Ftu .
tuFU j3.4.2 Application of residual fiscal benefits
62

Residual fiscal benefits are collected and applied at function level only. The value of residual
fiscal benefits at function level and at aggregate (total) level is added to the net value of
expenditure after deduction of taxes and social contributions to give the final value of net
benefits.

3.4.3 Further clarifications
63

Fiscal benefits which are granted to individuals who are not recipients of social benefits
recorded in the ESSPROS Core system or which are applied to income from sources otherthan social benefits are not within the scope of the ESSPROS net benefits module (restricted
approach). This includes all fiscal benefits that provide relief to indirect taxes (e.g. VAT).

64

Fiscal benefits in the form of payable tax credits are always outside the scope of the restricted
approach as these are included in the ESSPROS Core System. However, it may not always
be possible to exclude their impact from the calculation of the AITR/AISCR. Where this is thecase negative amounts may be reported as residual fiscal benefits in order to correct for thisand avoid double counting of payable tax credits between the restricted approach and the
ESSPROS Core System.

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APPENDIX V: Differences between the ESSPROS and the national accounts (ESA 2010)

APPENDIX V: Differences between the
ESSPROS and the national accounts (ESA2010)
The definitions, conventions and accounting rules in the ESSPROS Manual are to a large extent
29
harmonised with the national accounts ( ). There are, however, some differences and the maintypes are listed in this Appendix.

1 Scope of social protection
The national accounts do not identify social protection as such, but define social benefits and social
contributions. In this respect there are two discrepancies between the two systems:(i) the national accounts definition of social benefits also includes functions that are notincluded in the ESSPROS, in particular the function Education. However, the ESSPROS
records some expenditure connected with vocational training under the unemployment and30
disability functions ( );(ii) the ESSPROS' definition of social benefits covers both current and capital transfers; thenational accounts’ definition refers to current transfers only;

2 Statistical units
The System of National Accounts (SNA) discusses social insurance schemes without turning them31
into units of classification ( ). Accordingly, social benefits are treated as being granted byinstitutional units in the national accounts.
In the Core of the ESSPROS, on the other hand, social protection transactions are described as
expenditures and receipts of social protection schemes. Such schemes can be run by one
institutional unit or a group of institutional units.

The concept of social protection schemes used in the ESSPROS includes non-contributory social
protection schemes (schemes providing social assistance) as well as SNA-defined social insurance
schemes.

(29) Compare the System of National Accounts, 2008 (SNA) (Commission of the European Communities, International Monetary Fund,
Organisation for Economic Co- operation and Development, United Nations, World Bank) and European System of National andRegional Accounts in the European Community, 2010 (ESA) (Commission of the European Communities).
(30) This is in line with the inclusion in national accounts of government expenditure on vocational training for the unemployed and thedisabled under COFOG division 10 Social protection (unemployment (10.5) and sickness and disability (10.1), respectively), rather
than under Education (COFOG division 9).
(31) See ESA 2010, §§ 4.88 and 17.01..

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APPENDIX V: Differences between the ESSPROS and the national accounts (ESA 2010)

3 The dividing line between social benefits in cash and in
kind
There are two important differences between the national accounts and the ESSPROS in the way
they distinguish social benefits in cash and kind:(i) In the ESSPROS, social benefits in cash and in kind are transaction categories and may be
granted by any type of scheme;
In the national accounts, the transaction category social transfers in kind (D63) refers
exclusively to benefits in kind provided by government units and non-profit institutions
serving households. The transaction category social benefits other than social transfers

in kind (D.62) is made up of three sub-headings: social security benefits in cash
32
(D.621); other social insurance benefits, in cash or in kind (D.622) ( ); and social
assistance benefits in cash (D.623).

(ii) in the national accounts social transfers in kind provided to, or received from, the Rest of the33
World are registered in D.62 benefits by convention ( ). In such cases, the ESSPROS

records social benefits in kind provided to the Rest of the World, but does not record
any benefit provided to residents by the Rest of the World.

4 Special ways of recording
The national accounts record certain transactions differently from the way most transactors would
see them. This is done in order to clarify the underlying economic structures. In some instances the
ESSPROS has not adopted the national accounts' way of recording:(i) the ESSPROS does not split contributions by protected persons into payments for insurance
services and net contributions available to finance benefits. The national accounts do split
contributions this way where autonomous private funded schemes are involved;(ii) the ESSPROS does not impute payments of property income and contribution supplements
in respect of private funded schemes. Certain schemes retain property income on invested
funds and use them to secure future social benefits. As these funds may be considered as
property of the protected persons, the national accounts record in this case (a) an imputed
flow from the institutional unit running the scheme to households called "Property income"and attributed to insurance policy holders and (b) a second flow, of equal value, from theprotected persons back to the institutional unit running the scheme as additional social
contributions;(32) ESA 2010 §4.104 introduced the sub-heading Other social insurance benefits (D.622) that records benefits payable by employers in
the context of other employment related social insurance schemes. Other employment-related social insurance benefits are social
benefits (in cash or in kind) payable by social insurance schemes other than social security to contributors to the schemes, theirdependants or their survivors. other employment related schemes include schemes organised by government units for their own
employees as opposed to the working population at large (see ESA 2010 §4.90).
(33) See ESA 2010 §4.111.

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APPENDIX V: Differences between the ESSPROS and the national accounts (ESA 2010)(iii) the ESSPROS records employers’ social contributions as receipts from the sector of theemployer. In national accounts, employers’ social contributions are payable by the sector
households, which receives them from the employer under compensation of employees.
(iv) the ESSPROS always records actual employers’ social contributions for the amountreceived by the scheme from the employer. In some cases, national accounts include in thevalue of actual employers’ social contributions deductions granted to the employers by thegovernment.

On the other hand, ESSPROS distinguishes between expenditure for social benefits andexpenditure for administration of social benefits. In national accounts, the costs ofadministration of government benefits are included in social transfers in kind.

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APPENDIX VI: The classification of various government disbursements

APPENDIX VI: The classification of various
government disbursements
The table below provides a ready reference for classifying various government disbursements
related to social protection.
Type of disbursement

Classification in the ESSPROS

1. The Government pays a sum of money tohouseholds to relieve them from the burden of asocial risk or need:(i) not linked to the purchase of specified goods
or services by the households;

Social benefits in cash. Recorded on account ofa government social protection scheme(ii) compensating households fully or partially forcertified expenditure on specified goods orservices;

Social benefits in kind, reimbursements (to thevalue of the actual government payment).
Recorded on account of a government social
protection scheme.

2. The Government provides households withgoods and services that it has produced itself:(i) at a price which is 50% or more of the
production costs, not limited to specificcategories of households;

Sale, not recorded in ESSPROS.

(ii) at a price which is 50% or more of the
production costs, limited to specific households
facing a social risk or need;Social benefit in kind (valued at the difference
between the market price of similar goods andservices and the actual price paid by thehouseholds). Recorded on account of agovernment social protection scheme.

(iii) free or at a price which is less than 50% of
the production costs; limited to specifichouseholds facing a social risk or need;Social benefits in kind (valued at the cost of
production and supply minus the part paid by thebeneficiaries). Recorded on account of agovernmentsocialprotection
scheme.

(iv) free or at a price which is less than 50% of
the production costs; not limited to specificcategories of households facing a social risk orneed.

Collective services,ESSPROS.

3. The Government
households:

makes

a

loan

not

recorded

in

the

to

(i) at an interest rate which is lower than themarket rate for social protection reasons;Social benefits in cash (to the value of theinterest foregone by government). Recorded on
account of a government social protection
scheme.

(ii) and subsequently it cancels the outstanding

Social benefits in cash. Recorded on account of

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APPENDIX VI: The classification of various government disbursements

debt for social protection reasons.

a government social protection scheme.
34

4. The Government pays market producers ( ).
(i) a current unrequited payment to influence
their levels of production, their prices and/or
make it possible for factors of production toreceive an adequate remuneration;

Subsidies, not recorded in the Core of
ESSPROS (except implicitly, as an element of
the value of administration costs). Under certain
conditions they may be recorded in the modules.

(ii) in order to purchase goods and services.
Subsequently, the government distributes thesegoods and services free or at reduced prices tohouseholds facing a social risk or need;Social benefits in kind recorded at the moment
government distributes the goods and services(valued at market prices minus any part paid by
the beneficiaries). Recorded on account of agovernmentsocialprotection
scheme.

(iii) in order to supply goods and services
directly and individually to households facing asocial risk or need;Social benefits in kind (to the value of the actual
government payment). Recorded on account ofa government social protection scheme.

(iv) to secure entitlement to social benefits togovernment employees, former employees andtheir dependents;

Employers' actual social contributions.

(v) to finance (in whatever form) other social
protection operations of the receiving market
producers (mostly insurers running social
protection schemes);

If on account of a government social protection
scheme, recorded under Transfers to/from otherschemes. In other cases: General government
contributions (paid out of the proceeds ofearmarked taxes or general revenue).

(vi) to finance capital formation and granted to
institutional units whether or not they are runningsocial protection schemes.

Not recorded in the ESSPROS.

5. The Government pays a sum of money toother government institutions or non-profit
35
institutions serving households ( ) supportingsocial protection schemes:(i) to secure entitlement to social benefits to its
employees, former employees and theirdependents;(ii) to finance (in whatever form) other social
protection operations of those institutional units;(iii) to finance capital formation and granted to
institutional units whether or not they are runningsocial protection schemes.

Employers' actual social contributions.

If on account of a government social protection
scheme: Transfers to/from other schemes. In
other cases: General government contributions.
Not recorded in ESSPROS.

(34) A "market producer" is a unit that produces goods and services and whose production costs are for 50% or more covered by income fromsales. Private non-profit institutions and government units can be market producers. All private producers other than non-profit institutions areclassified as market producers by convention.
(35) Non-profit institutions serving households (Code 15) comprises all resident non-profit institutions that provide most of their output to households
free or at prices which cover less than 50% of production costs, except those which are controlled and mainly financed by government
authorities.

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APPENDIX VI: The classification of various government disbursements

6. The Government allows reductions or rebates
on taxes or contributions to social security funds:

Fiscal benefits (i.e. tax breaks granted tohouseholds for social protection purposes) in theform of payable tax credits are recorded associal benefits in the Core system.
Other reductions or relief from taxes or social
contributions payable on income from social
benefits, whether granted for social protection
purposes or not, are taken into account in the
ESSPROS module on net social protection
benefits (restricted approach).
The impact of fiscal benefits on non-benefit
income is not currently recorded in ESSPROS.
Nor is relief from indirect taxation granted forsocial protection purposes. In the future, bothmight be included in an additional module on net
social protection benefits (enlarged approach).

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APPENDIX VII: The treatment of taxes and social contributions payable on benefits

APPENDIX VII: The treatment of taxes andsocial contributions payable on benefits
Paragraph 129 of Part 1 of the Manual states that the Core system records social benefits without
any deduction of taxes and other obligatory levies payable on benefits by beneficiaries.
Gross recording of social benefits has two main advantages:(i) it depicts the functional character of benefits (the reasons why they are made) in their purest
form;(ii) it agrees with the basic philosophy of the Core system as gross data usually arestraightforward and easy to collect.
However, gross data on social benefits are less adequate if, for instance, one wants to know theoverall implications of social protection on the government budget or the ultimate increase inbeneficiaries’ disposable income due to social benefits. Furthermore, aggregate gross social benefits
expressed as a percentage of GDP is not a satisfactory indicator of the relative effort that countries
undertake in the field of social protection, since countries differ markedly in the measure to which36
benefits are subject to taxes and social contributions ( ).
A variety of net concepts of social benefits may be distinguished depending on the kind of analysis
required. Apart from taxes on income and wealth and compulsory social contributions, also noncompulsory social contributions and even VAT on consumption expenditure may be netted out
against social benefits.
Generally, it is difficult to collect data on net benefits; proper statistical sources for the amount of tax
and social contributions paid by beneficiaries are not easily found. As a consequence, estimates
based on information on assessment scales and the frequency typical beneficiaries occur within thehousehold sector are the only reliable source.
Mainly for practical reasons, the ESSPROS leaves the compilation of net benefit data to a special
module. Users of the statistics are warned that for some types of analysis the use of gross benefit
data as recorded in the Core system may lead to misleading conclusions.

(36) It is noted that the issue of net benefits should be analysed in connection with other influences of taxation on the social protection system, inparticular tax benefits and tax exceptions related to the payment of social contributions.

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GETTING IN TOUCH WITH THE EU
In person
All over the European Union there are hundreds of Europe Direct information centres. You can find theaddress of the centre nearest you at: https://europa.eu/european-union/contact_en
On the phone or by email
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FINDING INFORMATION ABOUT THE EU
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website at: https://europa.eu/european-union/index_en
EU publications
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Multiple copies of free publications may be obtained by contacting Europe Direct or your local information
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EU law and related documents
For access to legal information from the EU, including all EU law since 1952 in all the official language
versions, go to EUR-Lex at: http://eur-lex.europa.eu
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Data can be downloaded and reused for free, for both commercial and non-commercial purposes.

KS-GQ-22-013-EN-N

European system of integratedsocial protection
statistics — ESSPROSThe European System of integrated Social PROtection Statistics(ESSPROS) was developed in the late 70s by Eurostat jointly withrepresentatives of the Member States of the European Union in
response to the need for a specific instrument of statistical observationof social protection in the EU Member States. The new ESSPROS Manualand user guidelines is the updated guide for compiling and using
ESSPROS data. It includes amendments and clarifications on thefollowing topics: social contributions reporting basis, distinction
between disability pension and early retirement in case of reduced
capacity to work, treatment of multifunction benefits.

For more information

https://ec.europa.eu/eurostat/ISBN 978-92-76-58596-1