Social security €445.7M in red after 7 months of 2021, €2.7M less YoY

Portugal’s social security system in the first seven months of the year had a negative balance of €445.7 million, €2.7 million better than in the same period last year, according to the Ministry of Labour, Solidarity and Social Security.

“The overall balance of the Social Security subsector reached -445.7 million euros in July, which represents a positive variation of 2.7 million euros compared to the same period last year,” the ministry said in a statement released on Wednesday as part of information about budget execution to July.

Contributing to that result was an increase in actual revenue of €1,373.9 million and a growth in actual expenditure of €1,371.1 million, which according to the ministry headed by Ana Mendes Godinho “is largely due to the extraordinary measures adopted to address the socio-economic effects of the [Covid-19] pandemic.”

To July, the total revenue of social security was €18,146.7 million, up 8.2% on a year earlier.

“This result is due to the increase of 894.1 million euros in contributions and contributions (8.9% more than in the same period of 2020) and the increase in funding from the State Budget by 237.9 million euros, as well as current transfers from the European Union by 112 million euros, 15.9% more than in the same period of 2020,” the ministry statement details.

Actual expenditure to July totalled €18,592.3 million, an 8% increase on the same period last year, essentially explained by the pandemic mitigation measures, which represented an increase of €1,596.4 million.

In addition to the Covid-related expenditure, the increase was also due to a €161.1-million or 18.8% rise in spending on unemployment benefits, as well as a €279.1-million or 2.7% increase in expenditure on pensions and the €121.1-million or 11.3% rise in expenditure on social action programmes and benefits.

The total public sector budget deficit to July stood at €6,840 million, down €1,631 million on the same period a year earlier.