In 2022 Latvian social protection expenditure amounted to EUR 6 billion 801.4 million, which is EUR 355.4 million or 5.5 % more than in 2021. The greatest increase was observed in the expenditure on the social protection areas of social exclusion (131.3 %), housing (52.3 %) and disability (12.3 %), whereas there was a reduction on unemployment (41.1 %).
Mainly due to the support granted to Ukrainian civilians in 2022, social protection expenditure on measures to fight social exclusion more than doubled and reached EUR 92.8 million, which also led to an increase in the expenditure on social assistance benefits.
Expenditure on the guaranteed minimum income benefit (GMI benefit) increased more than twice and reached EUR 21.2 million, while expenditure on the crisis benefit increased 6.2 times and reached EUR 9.2 million.
According to the Ministry of Welfare, the number GMI benefit recipients went up by 33.1 thousand over the year (from 25.1 to 58.2 thousand) and that of crisis benefit recipients by 24.3 thousand (from 13.8 to 38.1 thousand).
Housing allowances up
The second largest increase – of 52.3 % – was observed in expenditure on the function housing. As more resources were spent to compensate energy price rises, expenditure on housing allowance increased 2.1 times and reached EUR 29.4 million (EUR 13.7 million in 2021). According to the Ministry of Welfare, the number housing allowance recipients went up by 13.2 thousand over the year (from 59.9 to 73.1 thousand).
Expenditure on the area of disabilities increased by 12.3 % in 2022. Due to the improvements to personal assistance services1, municipal expenditure on personal assistance for persons with disabilities increased by 51.3 % and reached EUR 34.9 million. Moreover, with an aim to compensate high energy prices, additionally to the State aid also a special support for people with disabilities was paid.
The bulk (41 %) of social protection expenditure went to the population at retirement age, moreover the largest share – 88.3 % constituting EUR 2.46 billion – was spent on old-age pensions. As in 2022 pension index adjustments were made, the total social protection expenditure on the function old age increased by 10.5 %, compared to 2021. Moreover, additionally to the State aid a special support for people at retirement age was paid to compensate for high energy prices.
Termination of certain benefits granted to fight COVID-19 (e.g., downtime allowance) was a major factor causing reduction of the total unemployment-related expenditure (of 41.1 %). In 2021 the total expenditure on benefits for suppression of consequences of the spread of COVID-19 infection amounted to EUR 179.5 million, whereas in 2022, along with pandemic having a downward trend and the end of health emergency, this expenditure (wage subsidy support measure) amounted to only EUR 7.6 million.
Last year expenditure on social protection benefits (benefits, pensions, administrative and other costs) took 17.5 % of the gross domestic product (GDP), which is 1.8 percentage points more than in 2021 (19.3 %).
Baltic comparisons of 2021 and 2022 expenditure show a reduction of 1.9 percentage points in Latvia (from 19.1 % to 17.2 %), 2.2 percentage points in Lithuania (from 18.0 % to 15.8 %) and 1.5 percentage points in Estonia (from 17.1 % to 15.6 %). In the EU, expenditure on social protection benefits took on average 28.7 % of GDP in 2021.
The share of social protection expenditure as a share of GDP the GDP is just one of the variables used for measuring social protection expenditure. Annual expenditure on social protection benefits per capita is also used for this purpose. In 2022 the Latvian figure (EUR 3.6 thousand) was slightly lower than in the neighbouring Baltic countries (EUR 3.8 thousand in Lithuania and EUR 4.2 thousand in Estonia). Over the year, expenditure on social protection benefits per capita grew by 5.8 % in Latvia, 3.7 % in Lithuania and 4.2 % in Estonia.
