WRITTEN QUESTION E-2063/99

by Juan Naranjo Escobar (PPE-DE) to the Commission

(12 November 1999)

Subject: Inequality in the treatment of EU citizens in the welfare sector

On 28 September 1999 Eurostat released a study entitled Social benefits and their redistributive effects in the EU, revealing sharp inequalities in the treatment of EU citizens in terms of the pensions and other social security benefits they receive.

The study reveals that the proportion of people receiving such assistance varies widely across the EU Member States assessed therein.

Paradoxically, in some instances the standard of living enjoyed by the recipients of these social security benefits matches that of the remainder of the population in the country concerned and in other instances even exceeds the average.

The impact of the various benefits on reducing the number of poor people is very uneven, since the extent to which the said benefits are targeted at this sector of the population varies considerably from one Member State to another.

Furthermore, in some cases the other social security benefits paid out to citizens are virtually on a par with the pensions they receive, whereas in other cases they amount to far less.

Can the Commission corroborate these facts? If so, what is its assessment of the extent to which the treatment received by EU citizens in the welfare sector differs? Can the Commission say what precautions it will take to reduce these disparities?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(8 December 1999)

This analysis on the redistributive effect of social benefits in the Community was undertaken by the Commission in collaboration with the French ministry of employment and solidarity. It is based on the 1995 wave of the European Community household panel (ECHP), which is the only Community harmonised source for data on income in general and social transfers in particular. The ECHP is a survey based on a sample of some 60 500 Community households (170 000 individuals).

The analysis confirms that on average about a quarter of the total income of Europeans is made up of social transfers; pensions guarantee a standard of living to those drawing pensions which is close to the standard of living for the population as a whole; social benefits other than pensions are intensively targeted at the sector of the population with the lowest incomes and succeed, as a result, in reducing the proportion of people living on a low income by a quarter or more in most Member States. The higher inequality and poverty before transfers and the higher the share of such social transfers in total income, the higher their impact on reducing poverty and disparities in income.

These findings illustrate and confirm the important redistributive effect of social transfers and benefits as an important principle of the European social model. Moreover, as data include cash transfers only (and not benefits in kind), the redistributive impact of social protection is likely to be even higher.

The analysis also highlights significant differences between Member States and the need for strengthening cooperation at Community level. The Commission has proposed A concerted strategy for modernising social protection(1), based on dialogue, exchange of experience and evaluation of ongoing policy developments, to guide future action and cooperation in this field.

(1) COM(1999) 347 final.