Financial developments for social protection



Twenty years of policy for the sustainability of Belgian public finances - From a strategy of pre-funding the costs of ageing to a policy of reforms of the socio-economic model [28/02/2019]

The abolition of the Ageing fund in 2016 symbolises the transition from a strategy of pre-funding the budgetary cost of ageing to a strategy based on reforms to the socioeconomic model. This Planning Paper describes the economic and institutional factors behind the shift in fiscal sustainability policy, as well as the role of the various stakeholders. It also reviews the long-term projections produced by the Federal Planning Bureau over the past 25 years.



Within the short-term and medium-term macroeconomic outlooks, the financial flows related to social security are handled in detail, consistent with employment policy (see ‘Labour market’) and alternative financing of social security. The most recent government measures are also taken into account.

In the context of population ageing (see ‘Population’), the FPB draws up long-term financial outlooks for the social protection schemes within the overall topic of public finances. In these projections, the development of socioeconomic behaviours, the number of beneficiaries of social allowances and the corresponding amounts – which themselves react to the dynamics of salaries and career evolution – are followed closely. The assessment of public spending on health care differentiates between expenditure on acute care and expenditure on long-term care. The long-term studies, which are based on macroeconomic and social policy assumptions, show the developments of public finances, budget deficits or surpluses.

Methods and instruments

  • Social security modules have been developed within the macroeconomic models MODTRIM, HERMES and HERMREG; they are supplied with a detailed exogenous analysis of social payments.
  • On the basis of the population projections (see “Population projections” in WP 7-06), the results of the different peripheral models quoted below – with respect to specific socioeconomic behaviours and to pension and health care expenditure – are fed into the long-term model, MALTESE. This model provides a projection of all principal determinants of the long-term evolution of the expenditure on social protection within the overall framework of public finances (see MALTESE in WP 7-06).
  • The MALTDEMO model is used to assess the future evolution of education and participation rates, while the HORBLOK model provides a projection of the number of pensioners in the different statutory pension schemes (see ‘Socio-demographic models’ in WP 7-06).
  • The future pension amount is examined in separate models governed by specific calculation rules: PENSION for the employees’ scheme, MOSES for the self-employed scheme and PUBLIC for the civil servants’ pensions (see ‘Social protection models’ in WP 7-06).
  • Public spending on health care is assessed using two models: an econometric model showing real acute expenditure per capita in function of specific determinants, and a macro-projection model for long-term care expenditure, which is mainly affected by ageing.

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