In August 2003, the UGT trade union confederation published a document criticising the Spanish system of family benefits, an issue to which unions have hitherto paid little attention. UGT states that Spain spends less on family benefits than any other EU country and criticises the fact that benefit is mainly paid through tax deductions, thus disadvantaging lower-earning families. UGT is calling for a fairer system, not based on taxation.
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In August 2003, the UGT trade union confederation published a document criticising the Spanish system of family benefits, an issue to which unions have hitherto paid little attention. UGT states that Spain spends less on family benefits than any other EU country and criticises the fact that benefit is mainly paid through tax deductions, thus disadvantaging lower-earning families. UGT is calling for a fairer system, not based on taxation.
The federal technical bureau of the General Workers’ Confederation (Unión General de Trabajadores, UGT) published a study on social protection in Spain in August 2003 (La protección social en breve). The document is critical of government policy and of the 'integral family support plan for 2001-4' (Plan Integral de apoyo a la Familia 2001-2004), launched by the government in November 2001 (ES0303105F). Nearly two years after the introduction of this plan, UGT's assessment of it is negative. Citing Eurostat figures, it states that Spain provides the lowest level of family protection in Europe. The average expenditure on cash family benefits in the EU is about 1.4 % of Gross Domestic Product (GDP), while in Spain the expenditure is only 0.2% of GDP - see table 1 below.
| Countries | % of GDP | In purchasing power standards per person aged 0-19* | % of total benefit expenditure |
| Luxembourg | 2.6 | 4,687 | 12.9 |
| Austria | 2.3 | 2,599 | 8.2 |
| Germany | 2.1 | 2,391 | 7.5 |
| Belgium | 2.0 | 2,000 | 7.7 |
| France | 2.0 | 1,820 | 7.0 |
| Norway | 1.4 | 1,749 | 5.7 |
| Ireland | 1.5 | 1,664 | 11.2 |
| EU 15 | 1.4 | 1,361 | 5.5 |
| Finland | 1.4 | 1,345 | 5.8 |
| UK | 1.4 | 1,278 | 5.5 |
| Denmark | 1.1 | 1,260 | 4.0 |
| Switzerland | 1.1 | 1,244 | 4.2 |
| Slovenia | 1.5 | 1,017 | 5.9 |
| Sweden | 1.0 | 972 | 3.2 |
| Netherlands | 0.8 | 789 | 2.9 |
| Greece | 1.0 | 694 | 3.8 |
| Iceland | 0.8 | 651 | 4.0 |
| Italy | 0.5 | 581 | 2.0 |
| Slovakia | 1.5 | 553 | 7.9 |
| Portugal | 0.5 | 386 | 2.7 |
| Spain | 0.2 | 160 | 0.9 |
* Purchasing Power Standards (PPS) are an independent unit of any national currency that removes the distortions due to price level differences. The PPS values are derived by using Purchasing Power Parities (PPPs) that are obtained as a weighted average of relative price ratios for a homogeneous basket of goods and services, comparable and representative for each Member State.
Source: Eurostat, Statistics in focus, Population and living conditions, Theme 3-19/2003.
If the expenditure on family benefits is considered in terms of purchasing power per capita (see table 1 above), the differences can be seen far more clearly. Spain spends far less than other countries with a lower income. For example, Portugal spends 2.4 times more than Spain on child benefit. Spanish expenditure on child benefit per capita is only 12% of the average for the 20 countries compared by Eurostat.
Legal framework
The social partners have generally shown little interest in family benefit, because they consider it to be a legacy of the Franco regime. However, the system has been revised and adapted by measures including the elimination of one-off benefit payments and the allocation of benefits only to women in 1985 (through Law 26/1985) and the 1990 'Law on non-contributory benefit' (Law 26/1990) which provided benefit for dependent children. These rationalisation measures coincided with a sharp fall in the birth rate. Royal Decree-Law 1/2000 of 14 January increased the amount of family benefit, which had been frozen since a 1991 reform. This new law also introduced a one-off payment of EUR 459.76 for each child born after the third and established a new, one-off benefit for multiple births, whose amount varied according to the number of children.
The UGT report states that the main problem of the social protection system for families lies in the 'absolutely insignificant nature of family benefit', and that far more ambitious measures are required. The changes in family structure in Spain, as in most European countries, make it advisable to adapt family support policies 'by removing those obstacles that make it difficult to combine paid work and childcare [...] and to scale benefit according to the needs of families'.
Criticism of family benefit policy
The family benefit policy of the governing People's Party (Partido Popular, PP) is carried out through taxation - ie financial support mainly takes the form of tax deductions rather than cash benefits. This mechanism protects families with income who pay taxes, but fails to protect families who have no income or insufficient income to pay taxes. For most people allowances are not received as benefit but rather as a tax deduction - see table 2 below. According to UGT, social protection through taxation is based on a 'non-solidaristic' model that fails to distribute wealth because it only meets the needs of the middle classes and fails to protect those most in need.
| Annual income in EUR | Direct social security benefit (in EUR) | Tax deductions (in EUR) | ||||
| 1 child | 2 children | 3 children | 1 child | 2 children | 3 children | |
| Up to 4,000 | 291 | 582 | 873 | 210 | 435 | 765 |
| Up to 8,264 | 291 | 582 | 873 | 336 | 696 | 1,224 |
| Up to 13,800 | 0 | 0 | 0 | 336 | 696 | 1,224 |
| Up to 25,800 | 0 | 0 | 0 | 392 | 812 | 1,428 |
| Up to 45,000 | 0 | 0 | 0 | 518 | 1,073 | 1,887 |
| More than 45,000 | 0 | 0 | 0 | 630 | 1,305 | 1,295 |
Source: UGT, La protección social en breve, August 2003.
UGT calls for a family protection policy that is not based on taxation, that provides direct and universal benefit to compensate for the expense of having children, and that does not discriminate against those most in need. Therefore, this policy should have more funding and involve a better distribution of wealth. UGT also feels that it is necessary to deal with two problems in the benefit system. The first problem is inconsistency between labour law provisions and social security cover - by law workers are entitled to take up to three years off work for childcare, but only the first year of leave is counted for the purposes of social security contributions. The second problem lies in the low level of protection provided by the Spanish social security system in comparison with many other countries
Commentary
Although today Spain has one of the lowest levels of family benefits in Europe, in fact it was one of the pioneering countries in this area. Family benefit was introduced by the Franco regime in 1938, during the Civil War. Left-wing political parties and trade unions long criticised this approach, which they connected with the Franco regime and with a conservative attitude towards the family that they saw as 'natalista' (pro-birth) and 'familista' (pro-family). They have therefore failed to pay sufficient attention to family support policies. This lack of interest may be one of the reasons why child benefit fell from 26% of total benefit expenditure in 1970 to 0.9% in 2000. Today, over 30 years after the end of the Franco regime, the trade unions and left-wing parties implicitly recognise this error of judgment and are calling for a clear child benefit policy with a new model of funding that does not depend on taxation. (Antonio Martín Artiles, QUIT-UAB)
Eurofound recommends citing this publication in the following way.
Eurofound (2003), UGT criticises family benefits system, article.
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