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Social Security (SS) presented a surplus of 1.934 million euros (M€) in 2018 in a cash basis excluding the European Social Fund and of the Fund for European Aid to the Most Deprived (FEAD) effects, reflecting a decrease of 155 M€ when compared to 2017. This 2018 result reflects the surpluses of 1594 M€ in the Welfare System and of 340 M€ in the Social Protection System.

 

Excluding ESF and FEAD transfers, the effective revenue from Social security grew 3.1% (above the 1.6% Social Security budget underlying forecast) and the actual expenditure increased by 4% compared to 2017 (less than the 6.8% forecasted for 2018).

 

The Civil Servants Pension Scheme (CGA) reached a budget surplus of 101 M€, an increase of  25 M€ when compared to the previous year. This was due to a higher growth in revenue (2.1%) than in expenditure (1.8%).

 

CGA revenue grew by 201 M€ in 2018 compared to the previous year, explained by the increase of 231 M€ in State Budget transfers  and from a 35 M€ increase in contributions (notwithstanding the decline in the number of subscribers and in their wage bill). The expenditure grew by 176 M€, of which 115M € are related to pensions and allowances, even if the number of retired people declined for the third consecutive year.

 

CGA pensions and allowances expenditure amounted to 8772 M €, which corresponds to a growth of 1.3% in 2018. This increase is explained by: the pensions update in January; the extraordinary update from 1 August onwards; and, the increase in the retirement pensions average value.

 

The number of retirees exceeded the number of subscribers by a larger amount in 2018, since the CGA subscribers decrease was more pronounced than that of the total retirees. The active/inactive ratio decreased again in 2018, showcasing a ratio of 0.93 subscribers for each retired (excluding survival pension).

 

For 2019, the Social Security budget points to a decrease of the SS budget balance by 365 M€ to 1570 M€, which is explained by a higher increase in expenditure (+ 1746 M€) than in revenue (+ 1381 M€).

 

As for the CGA, the State Budget for 2019 foresees  a deterioration of this year’s balance  in 132 M€. If this forecast materializes, CGA will register a deficit (by 60 M€), inverting the surplus trajectory recorded in the last four years.

 

The CFP continues, for the third consecutive year, to not have access to physical and financial data from the Social Security system requested to “Instituto de Informática”, integrated in the Ministry of Labour, Solidarity and Social Security. This missing information is essential for the elaboration of a more detailed analysis.

General Government Sectors . Report nº 5/2019 . 23 May 2019