Social Protection Expenditure in Ireland 2020

Social protection expenditure was €58.2 billion in 2020, based on preliminary estimates. This represents 16% of Gross Domestic Product (GDP) or 28% of Modified Gross National Income (GNI*), a measure of the size of the Irish economy by excluding globalisation effects. This was a rise of €9.8bn (20%) on 2019, which reflects increased government expenditure on social protection due to the COVID-19 pandemic.

Social protection is a set of interventions whose objective is to reduce social and economic risk and vulnerability, and to alleviate extreme poverty and deprivation, typically grouped into eight functions -  sickness, disability, old age, survivors, family / children, unemployment, housing and social exclusion (refer to Social Protection Benefits by Function below). See figure 1.1 for a comparison of 2019 and 2020. This chart excludes administrative costs, which are shown in Table 1.2.

The first item to note in this chart is the increased expenditure on unemployment, which almost trebled from €2.7bn in 2019 to €7.8bn in 2020. This rise is almost entirely due to the Pandemic Unemployment Payment in 2020. The COVID-19 pandemic is also linked to the strong growth in expenditure on sickness between 2019 and 2020, which rose from €18.3bn to €21.5bn, an increase of 17.5%.

 

About a quarter of social benefits were means-tested in 2020, (i.e. they were explicitly or implicitly conditional on the beneficiary’s income and/or wealth falling below a specified level), while the remaining three-quarters were not means-tested.

Social protection expenditure in Ireland is mainly funded through general government revenues and by employer and employee contributions, such as Pay Related Social Insurance (PRSI). 

Social Protection Benefits by Function

Expenditure on social protection benefits, (excluding administration), are intended to protect individuals against the following risks or needs:

• sickness/healthcare benefits – including paid sick leave, medical care and provision of pharmaceutical products;
• disability benefits – including disability pensions and the provision of goods and services (other than medical care) to the disabled;
• old age benefits – including old age pensions and the provision of goods and services (other than medical care) to the elderly;
• survivors’ benefits – including income maintenance and support in connection with the death of a family member, such as survivors’ pensions;
• family/children benefits – including support (except healthcare) in connection with the costs of pregnancy, childbirth, childbearing and caring for other family members;
• unemployment benefits – including vocational training financed by public agencies;
• housing benefits – including interventions by public authorities to help households meet the cost of housing;
• social exclusion not elsewhere classified benefits – including income support, rehabilitation of alcohol and drug abusers and other miscellaneous benefits (except healthcare).

Figure 1.2 illustrates social benefit expenditure by function in 2020.  Expenditure on sickness accounted for 38% of social benefits in 2020, followed by old age (27%) and unemployment (14%). The remaining components were family/children (8%), housing (5%), disability (5%), survivors (2%) and social exclusion (1%).

 

International Comparison

Data on Social Protection expenditure are collected under the 'European System of integrated Social Protection Statistics' programme (ESSPROS) which facilitates an international comparison of data on the expenditure and receipts of social protection within European countries (see background notes).  At the time of publication, 2019 was the latest year for which there was fully comparable data for EU Member States.

France had the highest spending in 2019 in the EU on social protection, as a percentage of GDP, at 34%, while Ireland had the lowest at 14%. However, expenditure in Ireland was 23% when expressed as a percentage of GNI*, the 13^th highest in the EU.  See Figure 1.4.

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Footnotes

¹ Old Age Dependency Ratio: This indicator is the ratio between the number of persons aged 65 and over (age when they are generally economically inactive) and the number of persons aged between 15 and 64. The value is expressed per 100 persons of working age (15-64).

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For further Information see tables on PxStat

Next Chapter >> Background Notes