Without extra support, Social Security spending would have fallen 4.7% in a year with a record balance – Economy

In the absence of extraordinary measures in response to Covid and inflation, Social Security spending would have recorded a 4.7% drop last year, leaving 1.4 billion euros below that of 2021, indicates this Thursday the Public Finance Council. The portrait is made for a year that registers the biggest surplus in more than a decade, fueled by increases in social contributions, totaling more than four billion euros.

In 2022, the extraordinary measures adopted corresponded to an expense of 1,908 million euros. “Excluding the impact of these measures, actual expenditure would have decreased by 4.7% compared to 2021”, reflects the body’s analysis of the budgetary evolution of Social Security in 2022.

The CFP also points to an extremely favorable evolution on the revenue side and limited pressure on permanent expenditure in a year that was marked by the rekindling of the discussion on the sustainability of the pension system. In particular, with the controversial decision to cut the pension update processed in January this year – which the Government ended up reviewing, guaranteeing an increase in line with what the law provides.

Expenditure on pensions – the heaviest – increased by 6.6%, but the increases are “essentially justified by the creation of the exceptional pension supplement and the extraordinary pension update portion”, he indicates.

Last year, Social Security accounts ended with a surplus of 4,066 million euros. The analysis by the Public Finance Council shows that the result is due exclusively to the behavior of the social security system, whose revenues grew by 0.8% and expenditure fell by 3.3%. It is this system that pays contributory benefits – pensions and unemployment benefits, for example – and whose balances feed Social Security reserves for future deficit scenarios – via the Social Security Financial Stabilization Fund.

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