# **B. Social Spending**

Social spending, defined as the sum of contributory pensions, direct transfers, education and health care, accounted for 20.3 percent of GDP ( **Table 2** ). Direct transfers were 11.7 percent of social spending and 2.4 percent of GDP. They include non-contributory pensions, the _Plan de Equidad_ program,<sup>8</sup> food transfers and other direct transfers. The non-contributory pensions program ( _Pension de Asistencia a la Vejez e Invalidez_ ) was 0.5 percent of GDP and accounted for 2.6 percent of social spending. It targets the low-income elder or people with disabilities that do not meet the requirements to obtain a contributory pension (mostly, the non-fulfillment of the minimum period of contributions).

## **Direct transfers**

The _Plan de Equidad_ (or _Asignaciones Familiares del Plan de Equidad_ - AFAM-PE) is a means-tested conditional cash transfer program directed to households with children under 18 years old or pregnant women. Established in 2008, the program reached almost 400,000 beneficiaries<sup>9</sup> in 2017. The benefit requires school attendance for school-aged children and health checkups for pregnant women and babies. The transfer is higher for secondary than primary level students, and it increases at a decreasing rate with the number of siblings.

Food transfers are the sum of two different programs. On one hand, there is a means-tested program that is managed by the Ministry of Development (MIDES) called _Tarjeta Uruguay Social_ (TUS) that is focused on the 60,000 most vulnerable households.<sup>10</sup> It consists on a pre-paid card that is refilled monthly with an amount that increases with the number of children in the household. Half of the beneficiary households deemed to be in worse socioeconomic conditions receive twice the amount. The card may only be used to buy food and other basic goods. On the other hand, INDA ( _Instituto Nacional De Alimentación_ ) supplies food baskets to vulnerable population with chronic diseases.

The other direct transfers considered are the benefits of the social security system that require some conditions to be eligible. These transfers are managed by BPS and include unemployment insurance, maternity and family benefits, disability and sickness allowances.

## **In-kind transfers**

Educational public transfers comprise GoU’s spending in all educational levels, and it does not consider investments in infrastructure. In Uruguay, attendance to school is mandatory from age 4 (preschool level) and until completion of the lower secondary level (roughly when the child is 15 years old). Information is available at the national level for each educational level: preschool,

> 8 The _Plan de Equidad_ was implemented in 2008. Transfers are given to households with children under 18 and deemed to be “vulnerable” based on a score (Failache et al 2016). 9 Source: https://www.gub.uy/ministerio-desarrollo-social/datos-y-estadisticas/datos/cantidad-de- <u>beneficiarios-de-asignaciones-familiares-plan-de-equidad</u>

> 10 In 2017, there were about 1.2 million households in Uruguay. According to calculations with ECH (2017), 60,787 households were recipient of TUS.

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