To understand the impact of social transfers on child poverty it is important to take into account both the total expenditure and the distribution of spending by type (whether its destination is children, retirement, unemployment, survival, social exclusion, etc.) and whether it is more or less conditioned to the income level of receivers.
In Spain, total spending on cash transfers (unemployment, retirement, survival, illness, invalidity, study grants, family and child benefits, social exclusion, housing benefits) stood lower in 2016 than the European average: 1.3 percentage points lower (figure 2); however, the divide with respect to the EU has reduced since the year 2008, fundamentally as a consequence of the increase in unemployment benefits and subsidies.
Spain and Portugal, both with expenditure on family and child welfare very much below the European average, are two of the European countries that are least reducing the child poverty risk rate through transfers (figure 3). These reductions were greater in 2012 than in 2016, which reflects the special importance of the cushioning effect of the transfers during the severe recession experienced by both countries.
The European countries that are most reducing the risk of child poverty thanks to social transfers are Austria, Denmark, Sweden and Germany. Unlike Spain and Portugal, these are countries with high levels of social expenditure and with child protection systems based on universal transfers. These types of transfers, such as the benefit paid out per child in Sweden, are a subjective right of the entire population. They are paid on the basis of having a child or minor in one’s care, and people are beneficiaries regardless of their individual or family income. In general, the amounts paid by these universal systems are usually more generous than those conditioned to income, and because a broader population benefits from them, they attract considerable social support and, therefore, face less risks of suffering cuts in periods of austerity.


In any case, Spain’s and Portugal’s expenditure on family and child welfare is much lower than the European average. Despite a slight recovery following the worst years of the crisis, investment in this area represents 0.8% of GDP in Portugal, barely half the average European investment. As for Spain, investment in this area is even lower: around 0.5% of GDP, the lowest percentage in the European Union.