Social Protection Budget Brief

The social protection expenditure in Albania accounts for about 9 percent of the GDP, representing the largest budget contribution among the other public sectors such as health and education. However, the share of social protection is still lower compared to countries in Euro Area where the average was 19.6percent in 2018. Expenditure in social protection sector rose from 131.4 million All in 2015 to 163.7 million ALL in the budget for 2020.

The share of social protection budget expenditure in the national budget is about 40 percent in 2020 and on an increasing trend. The social protection budget is allocated through three main programs. The Social Insurance program accounts for 26.3 percent of social protection budget and the Social Care for 14.9percent. The Social Inclusion has a much smaller share and since 2019 is merged with social care program.

The budget of social care program has remained in stagnant values during 2015 – 2019. The budget of social protection is increased in nominal values by 5 percent in 2019 compared to 2018. The two main components of the social protection expenditure are internal current transfer that represent 83 percent of the spending in 2019 and the transfer for families and individuals,14.7 percent in 2019.

The execution rates among the programs goes from 100 percent for social insurance to 98 -99 percent for social care and 76 – 90 percent for social inclusion program. This is the program with the lowest rate of execution. Local government units spend part of their revenues for social protection services, but there is no data about their annual budget or MTBP document. Local government units should plan at the beginning of the year based on the needs or the trend of their revenues. Spending per child in social protection sector is difficult to be defined.

The only element that is clearly identified is the indicator for children receiving social care. Spending on vulnerable groups is mainly part of the budget of Social Care budgetary program. Improving the linkage between social protection performance indicators and fund allocation would be important in increasing efficiency in budgeting.