Spanish Social Security system posts deficit of 11.2 billion euros, equivalent to 1.06% of GDP

Of the total Social Security deficit, a deficit of 1.42% of GDP corresponds to the System itself (the Mutual Insurance Companies for Accidents in the Workplace and Occupational Diseases and the Administrative Entities and Common Services), a surplus of 0.43% of GDP corresponds to the State Public Employment Service and a deficit of 0.07% of GDP corresponds to the Wage Guarantee Fund.

Budget performance summary

Together with the aggregate information for the Social Security authorities as a whole, specific budget performance data from 2014 is also available (administrative entities, common services and mutual insurance companies for accidents in the workplace and occupational diseases).

Hence, the accounts of the Social Security system - Mutual Insurance Companies for Accidents in the Workplace and Occupational Diseases and Administrative Entities and Common Services - show a deficit of 13.95 billion euros (based on the provisional results), compared with a deficit of 8.73 billion euros in the same period of the previous year.

This figure corresponds to the difference between recognised revenue from non-financial transactions of 119.34 billion euros - down 1.72% - and recognised expenses of 133.3 billion euros - up 2.41%.

A pension increase of 3.65 billion euros should be taken into consideration when analysing the expenditure heading. As regards revenue, it should be noted that the decrease of 2.09 billion euros is mainly due to an accounting anomaly: the revenue budget for the 2014 financial year includes contributions from the State to exclusively finance expenses in that year, while the same budget for 2013 contained State financing for that year and other previous years.

In cash accounting terms, these non-financial transactions led to cash revenue of 117.34 billion euros - down 1.3% on the previous year - while expenses rose by 1.55% to 131.93 billion euros. National Insurance contributions amounted to 97.74 billion euros - up 1.4% - while spending on contributory pensions and benefits amounted to 119.42 billion euros - a year-on-year increase of 2.82%.

Of the total volume of recognised revenue, 91.64% corresponds to the administrative entities and common services of the Social Security while the remaining 8.36% corresponds to the Mutual Insurance Companies for Accidents in the Workplace and Occupational Diseases. 92.85% of the expenses were recognised by the administrative entities and the remaining 7.15% by the mutual insurance companies.

Non-financial revenue

National Insurance contributions amounted to 99.16 billion euros, which represents an increase of 0.96 percentage points on the same period in the previous year as a result of a 2.48% rise in contributions from the employed.

Current transfers amounted to 15.71 billion euros - down 14.77% on the accumulated figure to the same date in 2013.

Revenue from assets amounted to 2.63 billion euros - down 6.72% year-on-year. Taxes and other revenue amounted to 1.2 billion euros, a year-on-year decrease of 14.19%.

Non-financial expenditure

Economic benefits paid out to families and institutions amounted to 124.33 billion euros, a figure that represents 93.28% of total expenditure incurred by the Social Security system.

In the 2014 General State Budget Act, the amount of the supplement to minimum contributory pensions appears in a budget programme which is separate from contributory pensions. The budget is therefore formally adapted to the non-contributory nature of this benefit.

In order to perform a standardised year-on-year comparison, i.e. taking into account the observation made in the above paragraph, it would be necessary to add the amount of expenses for the supplement to minimum pensions of 7.49 billion euros in the heading of contributory pensions and benefits. This gives a total of 112.17 billion euros, a year-on-year rise of 3.33%.

Benefits for maternity, paternity and pregnancy risk amounted to 2.14 billion euros, representing a 0.62% year-on-year increase. Temporary Incapacity Benefits amounted to 5.49 billion euros - up 9.43% on the same period in 2013.

According to data at the provisional close, non-contributory pensions and benefits amounted to 4.08 billion euros, with 2.25 billion euros allocated to non-contributory pensions and 1.83 billion euros to subsidies and other benefits, of which 1.74 billion euros were allocated to family benefits.

When analysing the year-on-year increase, it should be remembered that expenses from previous years amounting to 327.64 million euros were applied to the budget in 2014 and that expenses from previous years amounting to 1.35 billion euros were applied to the budget in 2013. When considering these circumstances, the increase in non-contributory benefits stands at 2.71% on the previous year.

Management expenses fell by 1.67% under running costs, goods and services, while expenditure on labour costs fell by 0.88% and expenditure on investment fell by 4.61%.