Social Security contribution revenues grew by 9.8% year-on-year to 101.75 billion euros

Oct 1, 2023 | Current affairs, Featured, Revista Lloseta, Thursday Daily Bulletin, Tradition

The system recorded a positive balance of 2,869 million Euros, 0.2% of GDP. Social security contributions continue to grow at the fastest rate in 16 years due to job creation and the improvement in contribution bases.

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Social Security

Revenues from social security contributions registered a 9.8% year-on-year increase in the first eight months of the year, reaching 101,750 million euros (9,085 million more than a year earlier). This is the highest figure in the historical series, while the year-on-year growth rate is the highest in the last 16 years, since 2007, driven by the good performance of employment in 2023 and the recovery of the contribution bases.

Discounting the revenues corresponding to the Intergenerational Equity Mechanism, in force since January 1, the increase in social security contributions would be 8% year-on-year, which is the third largest increase in the last 20 years (after 2007 and 2022). If we take as a reference the data for the last fiscal year that was not affected by the pandemic, 2019, the increase in contributions is 19,513 million euros (24% more).

As a whole, the Social Security accounts show a positive balance as of August 31, 2023, of 2,869 million Euros, compared to the deficit of 287 million Euros recorded on the same date in 2022. These 2,869 million, equivalent to 0.2% of Gross Domestic Product (GDP), are the result of the difference between recognized rights for non-financial operations of 136,640 million euros, which show an increase of 12.6%, and recognized obligations of 133,771 million, which grew by 9.9% year-on-year.

On the other hand, the data up to July (the latest available data) show a balance of 4,292 million Euros, equivalent to 0.3% of GDP, for the Social Security Funds, which include, in addition to the system, the data from FOGASA and the Spanish Public Employment Service (SEPE).

In cash terms, the system’s net collection amounted to 133,828 million Euros, an increase of 11.5% over the previous year, while payments showed an increase of 9.8%, up to 133,461 million Euros.

Non-financial income
In these eight months, social contributions amounted to 101,750 million euros, an increase of 9.8% compared to revenues for the same period of the 2022 financial year (9,085 million euros more).

Graph of the evolution of social contributions

This performance was driven by the evolution of employee contributions, which rose 10.3% year-on-year, the highest since 2007, to 96,096 million euros (up 8,949 million euros).

Graph of the evolution of the contribution of employed persons

In addition, contributions from the unemployed amounted to 5,654 million euros, an increase of 2.5% (135 million euros more).

Transfers received by Social Security amounted to 32,734 million euros, a year-on-year increase of 17.4%. The most significant item corresponds to transfers received from the State and Autonomous Organizations, which totalled 29,736 million euros (up 20.6%), and in particular, the increase is mainly due to a greater receipt of funds to guarantee compliance with the First Recommendation of the Toledo Pact.

Non-financial expenses
On the expenditure side, economic benefits to families and institutions reached 125,085 million, 9.5% more than in the same period of 2022. This figure represents 93.5% of the total expenditure made in the Social Security system.

The largest item, 114,987 million, corresponds to pensions and contributory benefits, with an increase of 9.5%.

In a detailed analysis of the contributory area, spending on pensions (permanent disability, retirement, widowhood, orphanhood, in favour of family members and supplements to contributory pensions to reduce the gender gap) increased by 10.7% to 102,962 million euros, due to the increase in the number of pensioners (1.2%), the rise in the average pension (9.6%), as well as the general revaluation of 8.5% of contributory pensions in the fiscal year 2023.

Regarding temporary disability benefits, total expenditure decreased by 0.3% with respect to the same period of the previous year, reaching 8,860 million euros, while benefits for childbirth and childcare, co-responsibility in infant care, risk during pregnancy and breastfeeding, and care for minors affected by cancer or other illnesses amounted to 2,656 million (5.7% more).

Non-contributory pensions and benefits, including minimum supplements to contributory pensions, amounted to 10,099 million Euros, 10% more than in the same period of the previous year, mainly because of the extraordinary 15% increase in non-contributory retirement and disability pensions and Minimum Vital Income (IMV), which has been applied since July 2022, has been maintained.

Of this amount, 6,643 million euros (6.9% more) are allocated to non-contributory pensions and minimum supplements, and 3,456 million euros (16.5% more) to subsidies and other benefits, of which 3,268 million euros correspond to Minimum Vital Income and family benefits, 16.8% more than the previous year.