State spent more than €59bn on social protection in 2021

Just over €59 billion was spent on social protection in the Republic in 2021, including health measures associated with the Covid-19 pandemic, Central Statistics Office (CSO) figures show.

The figures show the largest areas of expenditure were in sickness and healthcare (€23.6 billion) and old age (€15.9 billion). Together they accounted for 69 per cent of the total spend.

The total equated to approximately a quarter (25 per cent) of national income and was similar to the level spent in 2020. The increase in social protection spending in 2020 and 2021 was mainly due to Covid-19.

An additional €5 billion (over the 2019 figure) was spent on unemployment driven by the introduction of the Pandemic Unemployment Payment (PUP) to support workers impacted by the Covid-related health measures.

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There was also an additional €3 billion on general health costs associated with the virus.

The €59.1 billion spent on social protection in 2021 was up €1.2 billion up on the 2020 figure.

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“The increase in expenditure is predominantly in the sickness function (+€1.6bn on 2020) and old age function (+€0.7bn on 2020),” the agency said

On the other hand, expenditure on unemployment dropped in 2021 by €1.2 billion to €6.1 billion reflecting the reduction in PUP as public health restrictions relaxed and people returned to work.

On a per capita basis, the State spent €11,348 per person on social protection in 2021. The various social protection schemes are predominantly financed by Government funding (63 per cent), followed by employers’ social contributions (24 per cent).

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The single largest social protection scheme is the public health scheme which accounts for €21 billion (35.5 per cent) of social protection expenditure.

The State is facing something of a spending time bomb as the population ages and as it transitions to a low carbon economy.