Over recent years, social protection expenditure in the EU27 rose from a low of 26.1% of GDP in 2007 to reach 29.6% in 2009 and 29.4% in 2010, according to data from Eurostat, the statistical office of the European Union. This increase in the ratio is in large part a result of the economic crisis, as in nominal terms total social protection expenditure in the EU27 grew by around 10% between 2007 and 2010, while GDP remained nearly stable. While expenditure on main categories of benefits (pensions, health care, family) all rose by about 10%, expenditure on unemployment increased by a third. In 2010, the two main sources of funding of social protection at EU27 level were general government contributions from taxes, making up 40% of total receipts, and social contributions at 56%.

The EU27 average continued to mask major disparities between Member States. Social protection expenditure as a percentage of GDP was above 30% in 2010 in France (33.8%), Denmark (33.3%), the Netherlands (32.1%), Germany (30.7%), Finland (30.6%), Austria and Sweden (both 30.4%), and below 20% in Romania (17.6%), Latvia (17.8%), Bulgaria and Estonia (both 18.1%), Slovakia (18.6%), Poland (18.9%), Lithuania (19.1%) and Malta (19.8%). These disparities reflect differences in living standards, but are also indicative of the diversity of national social protection systems and of the demographic, economic, social and institutional structures specific to each Member State.

Expenditure per capita highest in Luxembourg, Netherlands and Denmark

In 2010, social protection expenditure per capita in PPS (Purchasing Power Standards), which eliminates price level differences between countries, was nearly eight times higher in Luxembourg than in Bulgaria. After Luxembourg, the highest spending per capita was recorded in the Netherlands and Denmark at over 40% above the EU27 average, followed by Austria, Ireland and Sweden at around 30% above the average. The lowest spending per capita was registered in Bulgaria and Romania at less than 30% of the EU27 average.

Old age & survivors benefits account for 45% of social protection benefits

On average in the EU27, old age & survivors benefits accounted for 45% of total social benefits in 2010, and were the major part of social protection benefits in nearly all Member States. The share of old age & survivors benefits in the total was highest in Poland and Italy (both 61%) and Malta (55%), and was lowest in Ireland (23%), Luxembourg (36%) and Denmark (38%).

Sickness/health care and disability benefits accounted for 37% of total social benefits on average in the EU27 in 2010. They represented the largest share of social protection benefits in Germany, Ireland, Luxembourg and the Netherlands and the second largest in all other Member States. Amongst the Member States, the share of these benefits ranged from 27% in Cyprus and 28% in Latvia to 48% in Ireland and 43% in the Netherlands.

Family benefits accounted for 8% of total social benefits on average in the EU27 in 2010, unemployment benefits for 6% and housing & social exclusion benefits for 4%. The share of family benefits in the total ranged from 4% in the Netherlands and Poland to 18% in Luxembourg. Unemployment benefits varied between 2% of the total in Poland and 14% in Spain, and housing & social exclusion benefits between less than 1% in Italy and 12% in Cyprus.