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Social protection during the economic crisis- how do changes to the benefits systems affect our children?

28/05/2014

The European Platform for Investing in Children (EPIC) presents a policy briefpdf which examines how changes to the benefits systems during the economic crisis have affected our children. The policy brief examines how the economic crisis and its widespread effects have acutely affected public policy areas with significant cuts in public spending and how these cuts have led to an under-investment in child focused policies.

Impact of the economic crisis

As a result of the economic crisis, the percentage of children living in poverty or social exclusion has increased in several Member States, with the highest increases reported in Bulgaria, Romania, Hungary, Latvia, Greece, Malta and Italy (SPC 2014). With rising unemployment levels and lower incomes families have not only become more at risk of poverty but have also been hampered by cuts to child and family related services which have been implemented in many Member States.

Responses to the economic crisis

Analysis of the changes to child and family policies implemented during the economic crisis shows a variety of responses across Member States. Cantillon et al. (2013)pdf conclude that in most EU countries, ‘child benefit packages have decreased relative to the poverty line’. From 2001 to 2009, the gap between the child benefit package and the poverty line has increase by more than 20 per cent in Austria, Spain, the Czech Republic, Estonia and Ireland, and over 10 per cent in France, Denmark and Latvia.  As the ChildONEEurope (2011) reportpdf indicates in many Member States there were cuts to family benefits and service opportunities in response to the economic crisis.  Countries such as Estonia, Hungary, Denmark, Ireland, United Kingdom, Portugal and Spain saw family cash allowances becoming means tested or benefits payments frozen. 

It is important to note that some countries have adopted both austerity and stimulus approaches at different points in time during the economic crisis or in relation to different services.  Some Member States have responded to the crisis with increased spending on family benefits.  Some European countries have continued supporting measures which mitigate the impact of economic crisis on children and families. Austria, Germany, France, and Italy have put in place new cash allowances, increased tax credit/breaks, childcare provision, and increased parental leave. Such initiatives aim to sustain and increase effective support for vulnerable members of society, who tend to be hit hardest by economic crises.

Future focus on children and family policy

Despite the decline of some child and family focused policies and services during the financial crisis there have been recent reforms and measures put in place across Member States which aim to protect vulnerable families and secure sufficient livelihoods for them. The European Commission’s recommendation ‘Investing in Children: breaking the cycle of disadvantage’pdf Choose translations of the previous link  is also targeted at improving the lives of children.  The recommendation concludes ‘that children are more likely to be at risk of poverty and social exclusion than adults and highlights the need for investment in early intervention and prevention as the most cost effective measures in comparison to addressing the future consequences of childhood poverty, neglect and social exclusion. The Social Investment Package (which sits within the recommendation) was adopted by the European Commission in 2013 with the aim to rectify current under-investment in social policies in Member states.  The SIP focuses on the need for Member States to focus on policies and policy areas which can produce high returns within people’s lifetimes such as childcare, education, training, the labour market, housing support, and health services. All these elements are crucial for improving the well-being of children and families, as well as for promoting stability and social protection systems play a significant role in reducing child poverty.

 

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