Malta languishes seventh from bottom in the EU league table for social benefit spending, according to figures for the 28 member states.
Money spent on social benefits that runs into the hundreds of millions accounted for 18.9 per cent of GDP, almost a third less than the EU average of 29.1 per cent.
The latest figures for 2011 released by Eurostat, the European statistics agency, showed that social expenditure in relation to the economy’s size dropped by half a percentage point over the previous year.
According to Eurostat the reduced share of social spending, which was a general European trend in 2011, was a result of social expenditure growing more slowly than GDP.
The figures showed that in 2009 Malta, like the rest of the EU, saw its share of social expenditure grow to 19.6 per cent as a result of the global economic crisis that depressed activity everywhere and pushed states to fork out more money on unemployment benefits.
Mismatch on benefit spending
After that, as economies picked up, expenditure on social benefits did not keep up and resulted in a reduced share of GDP.
However, on average other member states dedicated much larger portions of their budgets on social spending, with Denmark topping the list as 34.3 per cent of its GDP goes to finance social protection programmes.
Almost 55 per cent of the social protection budget went to finance old age pensions
The six states with a share of social spending less than Malta’s were: Latvia (15.1 per cent of GDP), Estonia (16.1), Romania (16.3), Lithuania (17), Bulgaria (17.7) and Slovakia (18.2).
A breakdown of how Malta spent its social protection budget showed that almost 55 per cent of the money went to finance old age pensions. The EU average for pensions stood at 45 per cent of social benefit spending.
The share of old age benefits was highest in Italy (61 per cent), Poland (58), Portugal, Latvia and Malta (all 55 per cent).
Another significant chunk went to finance sickness, healthcare and disability benefits that accounted for 33.5 per cent of Malta’s social spend.
Expenditure on families and children accounted for 6.4 per cent of the social budget while unemployment benefits accounted for 2.8 per cent.
The lowest share of the island’s social budget, just 2.7 per cent, went to housing and social exclusion.