This Working Paper studies the financial and social sustainability of the Belgian social protection system. The results of this publication were presented at the 20st Congrès des économistes belges de langue française and published in the conference proceedings. Assuming no policy changes and against the background of population ageing, the long-term public finance projections highlight an important budgetary challenge. In that framework, this paper examines a number of pathways based on the three pillars of the European strategy as determined during the 2001 Stockholm summit. The budgetary strategy (pillar 1) of the Belgian stability programme in itself does not guarantee the long-term sustainability of public finance and should, therefore, be completed by reforms in support of economic growth (through employment or productivity, pillar 2) or reforms of the pension schemes (as part of pillar 3). The social consequences of the reforms which alter the generosity of the pension schemes should not be overlooked.
The Federal Planning Bureau has a long tradition in providing long-term projections focused on the evolution of social expenditure within an overall framework of public finance, using the MALTESE system of models. This outlook is based on different scenarios: demographic, socio-economic, macroeconomic and welfare adjustment. The purpose of this publication is to describe the methodology for the construction of the socio-economic and macroeconomic scenarios and to illustrate it by presenting the main results from the 2011 projection for the Annual Report of the Study Group on Ageing.
One of the main sections in the current draft of the 2011-2012 Interprofessional Agreement concerns the welfare adjustment of social benefits. This draft results from a long process and fits in with the law concerning the Solidarity Pact between the Generations, which established a structural mechanism at the end of 2005, linking social benefits to welfare evolution. This working paper ‘Welfare adjustment of social benefits’ describes the first stage of that process: estimating the disposable financial means for the welfare adjustment of social benefits for the period 2011-2012, to which the Federal Planning Bureau contributed. In the employees scheme these means amount to 233.8 million in 2011 and to 497.9 million in 2012, of which the draft of the Interprofessional Agreement proposes to utilize merely 60%. Furthermore, this paper offers an overview of Belgian social policy by portraying its main turning points on the one hand and analysing the evolution of the average amounts of the main social benefits since 1980 on the other. The outcome is marked with contrast: over the period 1980-2009 the relative standard of living globally improved for pensioners, as opposed to the unemployed and the disabled.