de frontera anterior bk =

We have seen that the scales of social assistance vary within and between countries - by family type, and by the number and ages of the children. These differences imply a judgement made in each country about the relative needs of families of different kinds. As this is the minimum income in the countries concerned this variation in the ‘implied equivalence scales’ is of interest. Therefore in Tables 8.4a and 8.4b the implied equivalence scales of social assistance are compared.

The implied equivalence scale depends on which family type is used as the base, but in this analysis the base family is a childless couple set at 1.00. Before housing costs, compared with a couple, the needs of a single person vary (in Table 8.4a) between 50 per cent of a couple in the Netherlands and Portugal and 80 per cent of a couple in Spain and four per cent more than a couple in France. The most common ratio is in the 60s.

The implied equivalence for lone-parent families varies between countries rather more. Norway is generous to a lone parent on social assistance with a pre-school child - as a result of the Transitional Allowance. Ireland and Israel are the most generous to a lone parent, relative to a couple. Some countries assess the needs of a lone parent with a school age child lower than a childless couple, including Australia, Luxembourg, Germany, the Netherlands, Italy, Portugal and all the Nordic countries. Among the latter, Sweden, Italy and the Netherlands values the relative needs of a lone parent least generously – even a lone parent with two children receives less in social assistance than a childless couple.

Then there are differences in how countries treat the needs of a lone parent in comparison with a couple with children. For example a lone parent with one child aged seven in Israel receives more and in Belgium the same amount as a couple with one child aged seven. But in Denmark a couple with one child under three receives 50 per cent more and in Sweden 25 per cent more than the lone parent. The extra payable for a couple with one child aged seven (compared to a childless couple) varies from minus 25 per cent in Italy, minus five per cent in Norway and minus three per cent in the Sweden to 55 per cent in the UK. Countries evaluate the relative needs of couples with more than one child differently - for each child in the Netherlands a couple receive an extra nine per cent over what is paid to a couple but for example in Germany the first child gets 30 per cent of a couple, the second child 40 per cent and the third child 54 per cent. Overall the UK, Germany, and Austria are relatively the most generous to couples with three children compared to childless couples. But that does not mean they are the most generous in equivalent cash terms in fact they are not – it is just that their social assistance scales are internally more generous to families with children.

129

Table 8.4a

Implied equivalence scale of social assistance before

housing costs

Couple Couple

LP+2 +2 +3

LP+1 LP+1 children Couple Couple children children child child aged 7 +1 child +1 child aged 7 aged 7, Count ry Singles Couples aged<3 aged 7 and 14 aged<3 aged 7 and 14 14 and 17

Australia 0.55 1.00 0.99 0.94 1.18 1.36 1.31 1.55 1.55 Austria 0.69 1.00 1.08 1.20 1.99 1.33 1.33 1.74 2.21 Belgium 0.75 1.00 1.15 1.18 1.45 1.15 1.18 1.45 1.78 Canada 0.59 1.00 1.26 1.26 1.63 1.35 1.35 1.73 2.12 Denmark 0.64 1.00 0.86 0.83 1.01 1.36 1.33 1.39 1.46 Finland 0.78 1.00 0.96 0.96 1.26 1.28 1.28 1.62 1.93 France 1.04 1.00 1.15 1.04 1.27 1.19 1.23 1.51 2.04 Germany 0.56 1.00 1.10 0.88 1.50 1.30 1.30 1.70 2.24 Greece Ireland 0.60 1.00 1.67 1.67 2.11 1.32 1.32 1.63 2.01 Israel 0.65 1.00 1.43 1.43 1.87 1.29 1.29 1.59 1.76 Italy 0.69 1.00 0.75 0.75 0.88 0.75 0.75 0.88 1.02 Japan 0.65 1.00 1.08 1.12 1.51 1.25 1.29 1.67 2.03 Luxembourg 0.67 1.00 0.84 0.85 1.10 1.17 1.18 1.43 1.75 Netherlands 0.50 1.00 0.81 0.82 0.91 1.08 1.09 1.18 1.27 New Zealand 0.60 1.00 1.04 1.04 1.24 1.25 1.25 1.37 1.58 Norway 0.79 1.00 1.11 0.87 1.05 0.74 0.95 1.13 1.30 Portugal 0.50 1.00 0.84 0.84 1.19 1.34 1.34 1.69 2.18 Spain 0.80 1.00 1.08 1.08 1.28 1.20 1.20 1.38 1.56 Sweden 0.75 1.00 0.71 0.72 0.87 0.96 0.97 1.12 1.30 UK 0.64 1.00 1.19 1.19 1.57 1.55 1.55 1.93 2.32 USA 0.65 1.00 1.09 1.00 1.29 1.38 1.29 1.58 1.86

The after housing costs the general impact of housing benefit schemes are to reduce the relative position of singles against childless couples and to improve the relative position of families with children. After housing and services (Table 8.4b) the implied equivalencies for families with children tend to improve, particularly in those countries with free school meals and/or no housing costs for children on social assistance.

130

Table 8.4b

Implied equivalence scale of social assistance after housing

and services

Couple Couple

LP+2 +2 +3

LP+1 LP+1 children Couple Couple children children child child aged 7 +1 child +1 child aged 7 aged 7, Count ry Singles Couples aged<3 aged 7 and 14 aged<3 aged 7 and 14 14 and 17

Australia 0.26 1.00 1.04 0.95 1.36 1.66 1.58 1.99 2.43 Austria 0.53 1.00 1.10 1.26 2.34 1.58 1.49 2.10 2.68 Belgium 0.63 1.00 1.42 1.47 1.95 1.31 1.36 1.34 1.92 Canada -0.84 1.00 2.24 2.24 3.89 2.57 2.55 4.27 5.99 Denmark 0.44 1.00 1.04 1.00 1.27 1.58 1.54 1.64 1.73 Finland 0.57 1.00 0.96 1.08 1.60 1.39 1.51 2.03 2.52 France 0.42 1.00 1.37 1.19 1.85 1.40 1.47 2.20 3.30 Germany 0.56 1.00 1.10 0.88 1.50 1.30 1.30 1.70 2.24 Greece Ireland 0.60 1.00 1.70 1.67 2.12 1.34 1.33 1.66 2.05 Israel 0.18 1.00 1.97 2.06 2.80 1.73 1.73 2.19 2.47 Italy 0.39 1.00 0.51 0.49 0.71 0.51 0.49 0.71 0.87 Japan 0.34 1.00 1.21 1.21 2.05 1.66 1.66 2.46 3.36 Luxembourg 0.49 1.00 0.74 0.72 1.06 1.26 1.24 1.58 2.06 Netherlands 0.35 1.00 0.77 0.72 0.85 1.18 1.13 1.22 1.34 New Zealand 0.61 1.00 1.07 1.05 1.28 1.25 1.24 1.39 1.65 Norway 0.64 1.00 1.97 1.18 1.47 1.40 1.29 1.59 1.83 Portugal 0.02 1.00 0.63 0.61 1.44 1.83 1.81 2.64 3.77 Spain 0.36 1.00 1.21 1.38 2.01 1.57 1.57 1.90 2.27 Sweden 0.58 1.00 0.83 0.90 1.27 1.25 1.32 1.68 2.08 UK 0.63 1.00 1.19 1.25 1.69 1.57 1.63 2.06 2.46 USA -0.29 1.00 1.26 1.37 2.58 2.48 2.58 4.24 4.20

8.6

Conclusion

This chapter has compared the level of social assistance paid in our 22 countries and also explored the implied equivalence scales. We have found that there is considerable variation between countries in what they consider to be the appropriate level of their social assistance benefits and also in how they evaluate the relative needs of families of different sizes and types. It can be seen from Figure 8.1 that after housing costs and services the overall level of the social assistance package is highest for lone parents with one child in Ireland, Denmark, Norway, Austria and the UK and lowest in Portugal and Spain. For couples with three children it is highest in Austria, Luxembourg, Australia, Denmark and Sweden and lowest in Spain and Italy.

131

Figure 8.1

Social assistance

Figure 8.2 compares the implied equivalence scales for these two family types and shows that for the lone parent with one child aged seven it is highest in Canada, Israel and Ireland and lowest in Italy, the Netherlands and Portugal and for the couple with three children it is highest in Canada, Portugal and the USA and lowest in Italy, New Zealand and Norway. For both family types the UK comes towards the middle of the distribution.

Figure 8.2

Social assistance implied equivalence

However one constraint on the level of social assistance is how it relates to the net incomes of families in employment and in the next chapter we turn to that issue.

133

9 The structure and level of

the child benefit package

9.1

Introduction

In the previous chapters each element of the child benefit package has been introduced and compared separately. However all these elements are brought together in this chapter in order to compare the structure and level of the whole package.