Analytics, Financial Services, Latvia, Society

In 2013 the largest growth (of 22.7%) was recorded in the expenditure for providing support to the unemployed – mainly for unemployment benefits and active employment activities. The expenditure on unemployment benefits increased from EUR 58.1 mln in 2012 to EUR 74.2 mln in 2013. It was influenced by legislative changes in the allowance granting conditions².

Social protection expenditure in Latvia according to ESSPROS classification (mln EUR)

Since 2009 the expenditure on family and children support had been declining. It was due to the allowance restrictions stipulated in the Law "On Payment of State Pensions and State Allowances during Time Period from 2009 to 2012" adopted on 16 June 2009. In turn, in 2013 this expenditure increased by 19.5% compared to the previous year. This was promoted by reduction of the parent, maternity and paternity benefit restrictions, as well as by increase of childcare and minimum parental allowance.

Last year decrease in the expenditure for the reduction of social exclusion was mainly related to the growth of expenditure on local government benefit for the provision of guaranteed minimum income level (henceforth GMI). Compared to 2012 when the GMI expenditure accounted for EUR 23.8 mln, in 2013 it decreased by 45.8%, amounting to EUR 12.9 mln. According to the data of the Ministry of Welfare, the number of the monthly GMI recipients decreased from 39 thsd persons in January to 26 thsd persons in December.

In 2013, social protection expenditure accounted for 14.1% of the Gross Domestic Products (GDP) – 0.1 percentage point more than in 2012 (14.0% of the GDP). In 2012 social protection expenditure in Estonia amounted to 15.4% of the GDP, in Lithuania – to 16.5% of the GDP, and on average in the European Union – to 29.5% of the GDP.

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¹ Every year the European Statistics System complies and publishes harmonised data regarding expenditure on social protection in compliance with the ESSPROSS (European System of Integrated Social Protection Statistics) methodology developed by the Statistical Office of the European Communities (Eurostat). In Latvia the compilation of data on social protection in accordance with the ESSPROS was started in 2004. Data on social protection expenditure are available on the CSB home page. Information provided by various state institutions is used for the data compilation. The ESSPROS expenditure is funded from the state and local government budget, employers’ social contributions etc.

² Since 1 January 2013 the period of receipt of the unemployment benefit for all unemployed persons is nine months, regardless of the length of insurance.

³ The information on administrative expenditure was acquired by means of calculations.