Social Benefits received by households are things like State Pensions, Private Pensions, Child Benefit, Disability Benefit and Job Seekers’ Benefit. Social Benefits are paid to address a particular risk or need, like old age, sickness or family.
Social Transfers are made up of these Social Benefits that households receive and also the Social Contributions that households pay. Social Contributions are payments into schemes that pay out Social Benefits. Social Contributions are Pay Related Social Insurance (PRSI), pension contributions and similar payments.
In National Accounts, the Compensation of Employees includes all that employers pay to their employees or on behalf of their employees. For example, even though employers’ PRSI goes directly to Government, the accounts show this as part of the Compensation of Employees received by the worker’s Household. Later in the Sequence of Accounts, this PRSI is shown as part of the Social Contributions by the Household to the Government. Similarly, all other Social Contributions come from Households, because anything paid by employers has first been shown going households as part of their Compensation of Employees.
The Social Contributions of Households includes not just their direct payments into the fund and their employers’ payments. It also includes Imputed Pension Contributions of employers to make up any shortfall in defined benefit pension schemes. Finally, the fund itself has earned Investment Income because the fund has invested in things like shares that earn dividends and bonds that earn interest. This investment income is also considered part of the Social Contributions made by households to the fund. Thus, Social Contributions of households are greater than what would be observed on payslips alone.
Social Benefits can be in Cash (like pensions or Child Benefit), or in Kind. Social Benefits in Kind are goods and services provided to households for free or heavily subsidised. Social Benefits in Kind are very wide, including all health, education, and social housing services provided by the government. The services provided by non-profits, such as homeless shelters, are also Social Benefits in Kind. All Government and Non-Profit Social Benefits in Kind are part of their Final Consumption Expenditure.