Transfers received by individuals from the government sector .1 Pensions

The age pattern of pension transfers is no surprise, with higher payments per capita at older ages (note that early retirement schemes are included in unemployment benefits, see below). The average pension transfer per person is higher for natives than for people born abroad, and people born in the core EU countries receive on average higher pensions than people born outside the EU. These differences can be explained by a combination of factors : natives more often have a job during their active life, they have higher‑paid jobs and they contribute for longer than migrants arriving at older ages on the labour market in Belgium. Besides, natives tend to account for a higher share of public sector jobs known for their comfortable pension schemes (see HCR, 2018). The fact that pensions from European civil servants are not covered in the database explains part of the gap with natives (they are implicitly considered as having no pension at all). But this is not a bias, since these pensions are not (directly) paid by the Belgium authorities. The pattern for people born in new EU Member States is less clear‑cut, probably because the number of older people in that group is still relatively low.

As mentioned earlier, the numbers in the charts are averages of all the amounts received by groups, spread over all members of the group, even those who do not receive anything. Moreover, differences between groups, say between two age groups, do not say anything about the effective contribution of the group , or about the share of the group in the total amount, which also depends on its relative size, i.e. the number of people in that group. Finally, there is also a group of beneficiaries from pension transfers that is not covered in the database.

This is the case of people who have been contributing to public finances during their active life, who are now retired and drawing their pensions, but not living in Belgium anymore. This group includes people born abroad as well as natives.

3.1.2 Family allowances

The pattern for family allowances by age groups follows a bell curve, with a peak at around 40 years old for the parent receiving the benefit, often the mother (in the CBSS database, family allowances are allocated to the person receiving the payment, not the beneficiary child). This seems to reflect the biological constraints of family‑building : the older the mother / parents, the more likely that the number of children in the household increases, up to the age when children start to leave the initial household to start their own. The differences by origin, with higher average allowances per capita for the group of people born outside the EU, followed by people born in Belgium, and lower still, people born in other EU countries (EU13), largely reflect the fact that people born outside the EU have more children on average, and therefore have larger families (in  2016, the family allowance per child was still rising with the number of children per family up to the third child). Moreover, these families also benefit more often from family allowance supplements when their income is below a defined level or because they are single‑parent families (see also the discussion in section 1.1.5 of Part II)

3.1.3 Unemployment benefits and social assistance

As a group, foreign born people tend to receive higher average benefits, because a larger share of the group does not have a job. However, among the jobless, foreign‑born people tend to benefit less from unemployment benefits than natives because they do not meet all the requirements (such as previous job tenure). In that group more people receive no benefits at all and those who are beneficiaries receive lower amounts, so the average benefit per unemployed person is lower than for natives. The peak around the age of 60 is largely due to early retirement benefits being recorded in this category, in line with national accounts methodology. As shown in section 1.1.3 of Part II, non‑natives have shorter careers in Belgium and therefore have less incentive to switch to early retirement schemes.

Unemployment benefits tend to be lower for the group of people born in the new EU Member States than in all other groups (considering per capita averages for the groups, taking employed and unemployed people together). This could be linked to a more recent immigration wave, mainly through the work channel, with a larger share of these sub‑groups in employment (or self‑employment).

For social assistance, the picture is similar to unemployment benefits. Here too, people born outside Europe tend to receive higher average benefits as a group because a larger share of the group has no job or a very low income. EU‑born people present lower averages, similar or even lower than natives, except for people older than 50 who were born in the new EU Member States (but this is a very small group in relative terms).

Chart 2

Transfers received by individuals : Pensions and Family allowances

(€ per year per person in the age group)

0‑14 15‑19

Age groups Age groups

20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0 500 1000 1500 2000 2500 3000 3500

Pensions Family allowances

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0 5 000 10 000 15 000 20 000 25 000

Natives EU14

EU13 (Other EU28) Non‑EU

Non‑natives, of which :

Sources : CBSS Datawarehouse, NBB calculations.

Note : unless otherwise specified natives include second generations individuals, throughout this Part of the report (Part I).

3.1.4 Health transfers

Health transfers include sickness benefits identified in the CBSS database (such as sick pay, inability to work, occupational injury, occupational illnesses) as well as health care costs estimated on the basis of expenditure by age group (source INAMI).

Sickness benefits tend be higher on average for natives, especially between the ages of 25 and 55. They are lower for people born in the new Member States, a feature also seen for unemployment benefits ¹.

Health care costs account for a large share of public expenditure, but are not considered as individualisable cash transfers because they are to large extent provided in kind (such as hospital infrastructure, reimbursement through public mutual insurance institutions, etc.) and are therefore not available in the CBSS database. However, data for health expenditure by age group received from INAMI (2017) have made it possible to include this type of transfer in the analysis. As distribution of health care costs by origin is not available, only the age dimension is considered hereafter. Age is of course the major driver of health costs. So, in this exercise, different outcomes

1 Note that undeclared work does not give access to sickness benefits. The introduction of the service voucher scheme in Belgium changed the situation in this respect. According to Leduc and Tojerow (2020), it resulted in increased employment within the subsidised domestic services sector, especially for women of foreign nationality. They also find that programme participation adversely affects physical health, thus increasing the worker’s probability of claiming disability insurance benefits.

Chart 3

Transfers received by individuals : Unemployment benefits and social assistance

(€ per year per person in the age group)

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0 500 1 000 1 500 2 000 2 500 3 000 3 500

Unemployment benefits Social assistance

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0 500 1 000 1 500 2 000 2 500 3 000 3 500

Age groups Age groups

Natives EU14

EU13 (Other EU28) Non‑EU

Non‑natives, of which :

Sources : CBSS Datawarehouse, NBB calculations

in terms of health care cost transfers received by different groups will reflect their respective age structure only ¹ (a group with more older people, such as natives, will exhibit higher health care costs, compared to foreign‑born citizens who are on average younger).

3.1.5 Total transfers received by individuals

Our aggregate for total transfers received is computed by adding these various transfers together (family allowances, pensions, unemployment benefits, social assistance and sickness benefits as well as health care costs).

For the age category below 20  years old, the transfers considered here are mainly only health care costs.

These are the same for each age category by definition, so there are virtually no differences between groups.

However, the relative weight effect plays a role when considering all age groups together.

Under the age of 60, the average amount of transfers received by people born outside the EU is slightly higher than the average received by natives. The numbers for people born in EU countries are below those for natives.

In  other words, during most of their active lifetime, people born outside the EU receive more than other

1 In practice, it cannot be ruled out that different groups of immigrants face higher or lower health costs. Refugees often require specific care and psychological support. The composition of the work channel migrant population may be biased toward adults in very good health. Besides, a lack of supplementary health insurance for people without work contracts or with precarious employment contracts can also lead to lower use of health services because of the additional cost.

Chart 4

Transfers received by individuals : Sickness benefits and health care in kind

(€ per year per person in the age group)

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0 2000 4000 6000 8000 10000 12000

Sickness benefits Health care in kind

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0 500 1000 1500 2000 2500 3000 3500

Age groups Age groups

Natives EU14 All

EU13 (Other EU28) Non‑EU

Non‑natives, of which :

Sources : CBSS Datawarehouse, INAMI, NBB calculations.

groups on average (mainly through family allowance, unemployment benefits and social assistance). However, differences are not so big, especially when considering the average for all foreign‑born people. When looking only at people not currently working, however, those born in Belgium receive on average more transfers than all other groups from the age of 25. Among people in employment, the differences are very small. Clearly, work opportunities largely define the extent of transfers received by individuals.

After the age of 60, another pattern emerges. Natives tend to receive more transfers on average, mainly through higher pension benefits per person in those age groups. This is also the case for people born in core EU countries. The fact that people born outside the EU receive less in older age can also be linked to labour market considerations, with fewer jobs during (previous) active life and lower‑paid jobs on top of lower length of contributions for people who arrived later in their career.

Globally, over all age groups, it appears that non‑natives receive on average 13 % less transfers than the average for Belgium, while natives receive 2 % more. Among non‑natives, the group born in EU14  countries receives about the same amount as the country average, the group born outside the EU receives 14 % less transfers than the average, and the group originating from new Member States only 50 %. These results are of course largely impacted by the relative importance of different groups of the population. Pensioners are the best example.

When excluding this subpopulation by considering only the working‑age population (20 to 64), natives receive 1 % more than the average for Belgium (20‑64), and non‑natives 4 % less, but with a large disparity between non‑EU‑born immigrants, who receive 11 % more on average, and EU‑born immigrants (15 % less for EU14 and 38 % less for EU13).

Chart 5

Transfers received by individuals : total, and total by activity status

(€ per year per person in the age group) Total

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0

0‑14 15‑19 20‑24 25‑29 30‑34 35‑39 40‑44 45‑49 50‑54 55‑59 60‑64 65‑69 70‑74 75+

0

Sources : CBSS Datawarehouse, NBB calculations.