2023-11-18 03:01:02
Social Security disguises its figures with a supposed positive balance that, in reality, hides a hole this year of almost 39,000 million. According to its accounting, it has officially obtained a surplus of 1,207 million euros in the first nine months of the year, the equivalent of 0.1% of GDP, after entering 150,407 million euros in this period, 11.3% more , compared to expenses worth 149.2 billion, which have increased 9.8% year-on-year. This positive balance of Social Security – which would leave behind the deficit of 740 million from the same period in 2022 – has occurred for two reasons.
The first, due to the record income from contributions in the system of 114,711 million, 9.9% more. If these incomes are compared to those prior to the pandemic – in 2019 -, the increase in collection for this concept skyrockets by 24%, with 22,104 million more than then. This increase in contribution income was driven by the contributions of the employed, which increased between January and September by 10.3% year-on-year, up to 108,315 million, while those made by the unemployed increased to 6,396 million, a 2.7%.
The second reason has to do with State transfers to cover the hole that the organization is incapable of generating by itself. Social Security recognizes that they amounted to 33,435 million euros in the first nine months of the year, with a year-on-year increase of 12.5%. The most significant item corresponds to the transfers received from the State and Autonomous Organizations, which increased by 15.3%, up to 30,110 million euros. But the reality is that the total figure contributed by the State is close to 39,000 million euros, as stated in the entity’s budget, of which almost 20,000 million are dedicated to complying with the recommendation of the Toledo Pact, and the rest to the payment of minimum supplements, non-contributory pensions, the Minimum Living Income, family protection or dependency benefits and other types of aid.
In this situation, the country will have to face the next year with extended General Budgets and without a new spending ceiling just when the new fiscal rules imposed by Brussels come into force. Thus, Social Security, unable to finance itself, will once again have to receive a strong injection of money through new transfers, which for next year will be even greater than this one. In pensions alone, the injection of funds will reach 39,000 million euros. All despite the fact that the forecasts are that inflation will be lower than that of 2023, so the revaluation of pensions will require fewer resources than this year, when 8.5% was approved according to the CPI.
In the years 2021 and 2020, these state loans barely exceeded 13 billion euros and if you look a little further back. These State contributions have quadrupled in the last two decades: in 2012 they stood at 9,182 million, according to the final settlement, and they increased to 15,687 million euros annually in 2019, when they still amounted to less than half what they now do.
The Government approved in the Council of Ministers the granting of a new State loan to the General Treasury of Social Security for an amount of 10,003 million euros, to meet the extraordinary payment of pensioners for November, which added to the It was paid last June, the final cost will be more than 22,000 million euros. At least, as it is recorded in the third additional provision of the General State Budget Law for 2023, it will not accrue interest.
The largest item of Social Security spending corresponds to pensions and contributory benefits, with an increase of 9.5%, up to 128,314 million. According to the Ministry, spending increased by 10.8%, to 114,625 million, due to the increase in the number of pensioners, by 1.2%, due to the increase in the average pension, by 9.5%, as well as the general revaluation of 8.5% of contributory pensions in fiscal year 2023.
The deficit accumulated by Social Security already exceeds 106,000 million euros. Without taking into account State transfers and with the Passive Classes regime included, this hole has increased by 61,000 million euros since 2005, Fedea points out, the equivalent of five points of GDP. Next year, with the extended accounts, the Government will have to use the Treasury again to support the pension system, but it will have to be done with loans that apply market interests “that can reach historical highs.”
#hole #million #State #pays