The Impact of the Economic Crisis on Family Policies in the European Union

Transcription

1 EUROPEAN COMMISSION Employment, Social Affairs and Equal Opportunities DG Social Protection and Integration Social and Demographic Analysis The Impact of the Economic Crisis on Family Policies in the European Union 15 February, revised 14 April 2010 Anne H. Gauthier Canada Research Chair in Comparative Family Policy Department of Sociology University of Calgary Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2)

2 Contents 1. INTRODUCTION BACKGROUND: THE NATURE AND SEVERITY OF THE CRISIS AND THE ABILITY OF GOVERNMENTS TO RESPOND TO IT STRUCTURAL CHANGES TO THE COUNTRIES FAMILY POLICIES Structural changes resulting in increased support Structural changes resulting in reduced support MEASURES INTRODUCED IN RESPONSE TO THE ECONOMIC CRISIS Measures that increased the level of support for families Measures that reduced the level of support for families OVERALL IMPACT ON THE LEVEL OF SUPPORT FOR FAMILIES Child and family cash benefits and tax relief Maternity, paternity, parental, and childcare leave and benefits Childcare and early childhood education Housing benefits and subsidies Services and benefits related to the care of adult or other dependent Other services and benefits IMPACT OF THE CRISIS ON THE DEMAND FOR FAMILY POLICY...14 CONCLUSION...15 APPENDIX

3 1. INTRODUCTION The economic crisis has had, and is still having, a large impact on the well-being of families in the European Union. The severity of the crisis, the ability of governments to respond to it, and the actual responses adopted vary however widely across Member States. The aim of the meeting organized on 26 November in Brussels, with members of the EU network of experts on family policies, was to gain a better understanding of the impact of the crisis on the supply of, and demand for, family policies. The current report is based on verbal reports presented at the meeting and responses provided to a questionnaire prepared by the European Commission. 1 The questionnaire asked the experts to report on the changes to their country s family policy since October It also asked them whether or not the changes had been introduced in response to the economic crisis or were instead part of structural changes, and whether the changes were temporary or long-term. We also complemented this material with information from various other sources (listed in appendix). In this report, our definition of family policy 3 includes the following: Child/family cash benefits (allowances) and tax relief for families with children Maternity and parental leave policies (including pregnancy benefits, maternity and paternity leave policies, and parental and childcare leave policies). Childcare policies (including the provision of childcare and related subsidies for daycare, kindergarten, pre- and after-school care, and early childhood education) Housing benefits for families with children Support for families with caring responsibilities towards the elderly or other dependents Other policies or services for families with children While this definition of family policy encompasses a wide range of different policies aimed at families with children and other dependents, it is clear that other measures not included in this definition may also affect families. This is particularly the case with employment and social assistance policies. What this means is that, although our report documents the responses of governments to the crisis in the domain of family policy, these responses may have been accompanied by measures in other domains which may have eased, or further accentuated, the impact of the crisis on families. 4 1 The questionnaires were returned by 22 of the 27 Member States. They were missing for Denmark, Lithuania, Luxembourg, Portugal, and Spain. In some cases, we were able to draw some information from other sources. The fact that no or limited information appears in this report for these countries should however not be interpreted as an absence of change in family policy, but simply as a lack of information. 2 Some countries also reported measures introduced at an earlier date. They are not reported here. 3 There is no standard definition in the literature as to what constitutes family policy. The areas included in this report are those most commonly included in studies of family policies. 4 We should note that we relied here on the network s responses to the questionnaire in our definition of what is and is not part of family policy. For example, some of the housing benefits reported on in the questionnaires were likely part of broader programs rather than being strictly part of family policy. We did not attempt to correct this and included such benefits in our report. 3

4 2. BACKGROUND: THE NATURE AND SEVERITY OF THE CRISIS AND THE ABILITY OF GOVERNMENTS TO RESPOND TO IT The responses of governments to the crisis have obviously been affected by the timing and severity of the crisis but also by the budgetary circumstances of each country when the economic crisis hit. In particular, while some countries were facing relatively stable budgetary conditions at the onset of the crisis, others were already dealing with severe budgetary imbalances. So, while some countries were able to continue implementing scheduled family policy changes during the crisis, and even to introduce additional temporary measures, other countries were instead much more limited in their ability to respond to the crisis. In Tables A1 and A2 in Appendix, we report data on changes in GDP growth rate by quarter since 2008 in each Member State and in the countries unemployment rate. Although all countries were affected by the crisis, it is clear from these data that some countries were more strongly affected than others. It was especially the case of Estonia, Hungary, Latvia, and Lithuania which experienced continuous negative growth during an extended period of time. Needless to say, this situation created a very difficult situation for these countries; not only did the crisis increase the demand for support by families, at the same it decreased the countries revenue and thus the ability of governments to respond to increased needs. In the case of Hungary, the crisis hit when the government was already dealing with severe budgetary imbalances and was in the midst of implementing correction measures (which had already started to reduce the government support for families). In other countries, the situation is still evolving. For example, further cuts to government expenditures have been proposed in the Czech Republic. The continued crisis may also force governments in other countries to put on hold some scheduled structural changes to their family policy. So while this report summarizes the situation as of November, it is clear that further changes may take place in the months ahead. 4

5 3. STRUCTURAL CHANGES TO THE COUNTRIES FAMILY POLICIES In general, all countries have implemented structural changes to their family policy since October Below, we first briefly examine the structural changes that resulted in an increase in the level of support for families, and then those that resulted instead in a decrease in the level of support for families Structural changes resulting in increased support The first point that should be made is that despite the economic crisis nearly all countries report structural changes that expanded their level of support for families. These changes are summarized in Table 1 below. Table 1. Structural changes that increased the level of support for families Austria New tax-free allowances for children of 200 Euro per child per year (as of ) New tax credit for childcare costs (as of 1.1. ) Extended provision for free child care services (Sept ) The last year of kindergarten before entering elementary school became compulsory and free of charge (Sept 2010) Increases in heating cost allowances in many states (landers) Extensions to the childcare allowance schemes (as of ) Belgium Increase in budget for childcare services to respond to ongoing shortages Bulgaria 1 Increase in family benefits for the year Various new family allowances and social assistance schemes (as of 1.1.) Increase in the duration of childcare leave from 315 days to 410 days for each child (as of 2.1.) New legislation on paternity leave aimed at increasing the presence of the father in the first days after childbirth (as of 2.1.) New right of the father to paternity leave from the 6th to the 12th month of the child Amendment to the national programme "In support of Motherhood" to include retired people as babysitters Cyprus Increase in child benefits (as part of regular increases) (as of 1.1.) New housing loan scheme targeted at low income families (for the period -13) Czech Pro-family package (part of it implemented, part of it submitted for consideration) Republic Estonia Additional tax deductions for families with 2 and more children Finland Child benefit for the third and subsequent children was increased (as of 1.1.) Child benefit will be index-linked in Private day care allowance was increased (as of 1.1.) Minimum allowance during maternity, paternity and parental leave was increased (as of 1.1.; it will be index-linked in 2011) Child home care allowance was increased (as of 1.1.) and will be index-linked (in 2011) Partial child home care allowance will be increased (as of ) Entrepreneurs will be entitled to partial home care allowance (as of ) The 'Father's month' will be lengthened by two weeks (as of ) Maintenance allowance was increased (as of 1.1.) 5

6 Germany Greece One-off payment of 100 euro at the beginning of the school year for recipients of child allowances (as of 1.8. ) Changes to the child benefit rates to make them more closely related to the number of children (as of 1.1. ) Changes to the parental leave benefits (uniform minimum period of two months) (as of 24 January ) Extension of the parental leave for grandparents (in cases the parents are minors or in school) (as of ) Allowance for large families is extended to families with 3 children until the third child reaches the age of 23 (in 2008) Additional period of leave for mothers employed in the private sector (as of October 2008) New Reconciliation of family and professional life' action plan (mainly in the area of childcare provision) ( ) Hungary Extension of the kindergarten and crèches network Ireland Introduction of the Nursing Home Support Scheme (October ) Increase in the minimum rate of maternity benefits (of 8.50 euro per week) (as of 1.1.) Italy Additional resources to promote home-based care services for early childhood and new pilot project to create new nurseries in public administrations New plan to help low-income families and young people pay their rent (July ) Latvia Introduction of free school meals for all pupils in the first grade (as of ) Malta New tax exemption for mothers who return to work after the birth of their child Various measures to increase the quality of childcare services (2008) Increase in the energy benefits to help more low income families with the cost of housing utilities (in response to increase in oil prices) New measures to help first time home-buyers (Nov 2008) Netherlands Increase support to help parents pay for pre-school education (as of 1.8. ) Extension of the duration of parental leave from 13 to 26 weeks (as of 1.1. ) Increase in budget given to municipalities to help reduce child poverty (2008-9) Poland Increase in family benefits for the youngest child (as of ) Increase in the nursery allowance Increase in the budget for the school lunch program () Family Package signed into law. Extensive improvements in family support policies (as of ) Romania Slovakia Increase in the amount of allowances for families (including for lone-parents) New law on education and childcare services (aimed at diversifying childcare services and raise their quality) New benefits to help families with the cost of heating (Oct ) Various changes to parental leave and childcare benefit (including the introduction of a payrelated benefit instead of a flat-rate one) New benefit with the minimum income protection scheme for children attending school (in ) Free kindergarten for households receiving minimum income protection benefits (2008) Changes to the parental leave scheme (including two levels of benefits based on work history) (as of Sept ) Slovenia Increase in the amount of child allowance (part of regular increases) (as of 1.7.) Free preschool education for the second and subsequent children (as of 1.8.) Free meals at the secondary education level (as of ) 6

7 Sweden Increase in the educational content of preschool and universal preschool for 3-year olds (as of ) New childcare voucher system (as of July ) Increase number of days with benefit for care of closely related persons (as of ) Extended right to temporary parental benefit to persons other than a child's parent (as of ) UK New Health in Pregnancy Grant (as of April ) Increase in the statutory rate for maternity, paternity and adoption (as of 5.4. ) (part of regular annual increase) Note: 1- (2) In the case of Bulgaria, there was no information as to the measures introduced were structural ones or in response to the economic crisis. We assumed that they were structural. A total of 21 countries implemented such measures. In some cases, the changes consisted in an extension of existing measures or in regular update (such as the annual increase in the rates of benefits). In other cases, the changes consisted in new measures or in substantial increases in the budget of specific policy area (for example the provision of childcare). In three countries, The Czech Republic, Greece, and Poland, the changes consisted in the adoption of an extensive package of measures to help reconcile work and family life Structural changes resulting in reduced support Perhaps surprisingly, only two countries (Hungary and the Netherlands) reported that structural changes had been introduced that reduced the level of support for families (see Table 2). In the case of Hungary, the reduction of the duration of the parental leave benefits was however partly compensated by an extension of the kindergarten and crèches network to help more women join the labour force. In the case of the Netherlands, the reduction in the maximum hourly rate for childcare that can be subsidized means that it will cost parents more to send their children to pre- and afterschool and for home-based childcare. Table 2. Structural changes that decreased the level of support for families Hungary 1 Reduction in the supported gas and district heating price system (2010) Reduction in the duration of parental leave benefits from up to the 3rd birthday of the child to up to the 2nd birthday of the child (as of ) Increase in the contribution period for the insurance-based childcare benefits ( ) Netherlands Reduction in the maximum hourly rate for childcare eligible for subsidy (as of ) 7

8 4. MEASURES INTRODUCED IN RESPONSE TO THE ECONOMIC CRISIS In addition to the structural changes, some measures were explicitly introduced by governments in response to the economic crisis. Again, we first examine measures that increased the level of support for families, and then follow with those that decreased it Measures that increased the level of support for families The nature of these measures varied substantially across countries, but in general they were in the form of cash benefits, measures related to the cost of childcare, and measures to help families with the cost of housing. 5 These measures are summarized in Table 3 below. In some cases, the changes expanded existing benefits (e.g. child or family allowances or tax relief) while in others they created new one-time only benefits (e.g. the service voucher in France and the social card in Italy). In general, the changes tended to be only temporary and to involve relatively small amounts of money for each family. They were in numerous cases means-tested, but could also benefit a large number of families. 6 For example, the reduction in income taxes for families in France was estimated to have benefitted 4 million households. Table 3. Measures in response to the economic crisis and which increased the level of support for families Cyprus Czech Republic France Increased funding to child care services as part of the Government Strategic Action Plan (Feb ) Increase in the amount of child allowance and extended eligibility (temporary measure valid from July to December ) Reduction in income taxes for low-income families (benefiting about 4 millions of households) One-time cash benefits of 150 euro for low-income families and families with a modest income and a school-age child Service voucher of 200 euro (including for families with a disabled child and/or children below the age of 3) (June- Oct ) Germany One-off payment of 100 euro for each child entitled to child benefit () Hungary One-off cash benefit for low income families facing a crisis (temporary measure for August equal to about % of the minimum pension). Ireland Free pre-school year of Early Childhood Care and Education (permanent, starting January 2010) (replaced the Early Childcare Supplement which was abolished at the end of ) Italy Lump-sum bonus for low income families (between 200 and 1000 euro) (in ) Increased family allowances (in 2008) Social card worth 40 euro per month for low income families with children up to the age of 3 (for the purchase of household goods) (Dec 2008) Lump-sum bonus for powdered milk and diapers (in ) Trust Fund for newborns to facilitate access to credit (in ) New tax relief of 19% of kindergarten expenses (2008) Reduction in the cost of natural gas and electricity for low-income families (60 to 135 euro per year) (as of 1.1.) 5 It is worth pointing out again that we asked the experts to restrict their answers to measures specifically aimed at families. This means that programs aimed at a broader segment of the population may not have been reported. This is likely the case with housing programs. 6 We should note however that we did not have information on the number of recipients for many of the measures reported by our experts. 8

9 Lithuania Benefits for children under age of 3 were extended to cover all children of this age irrespective of family incomes Luxembourg 1 New 'service voucher' for children aged 0-12 years Poland Temporary mortgage payment relief for home/apartment owners who have lost their job due to the crisis and are eligible for unemployment benefit Romania First house measure to facilitate the easier access of people to buy a house (June ) Slovenia New housing loan (including for young families) (2010) UK Indexation of the child element of the Child Tax Credit to help families affected by the recession (temporary) (about 175 pounds increase per year ) Increase in child benefit (earlier than scheduled) (about 24 pounds per week for a two-child family) (Jan ) Increase in the Social Fund budget to help vulnerable people (temporary increase for two years) Introduction of Stamp Duty Holiday to stimulate house purchase (temporary) (Sept 2008) Support for Mortgage Interest (SMI) which assists homeowners with the interest on their mortgage (temporary) (Sept 2008) Funding package for third section organizations supporting families (temporary till March 2010) In a few countries, measures were also taken to reduce the cost of childcare and early childhood education for parents. This was for example the case in Ireland and Italy. As shown in Section 3, numerous other countries implemented measures dealing with childcare and early education in 2008 and. With the exception of Ireland and Italy, these measures were, however, not a direct response to the economic crisis but were part of structural changes to the country s family policy. In view of the nature of the crisis, numerous countries implemented measures dealing with housing. Our review being limited to measures directly related to families, we are, however, probably not capturing the full extent of measures introduced in this sector. Some of the measures reported in Table 3 dealt directly with mortgages, especially to help home-owners pay their mortgage. This was for example the case in the United Kingdom with the introduction of the Support for Mortgage Interest and in Poland with the temporary mortgage payment relief for home/apartment owners who have lost their job due to the crisis. In contrast, other measures aimed at helping first-time home-buyers (often young families). This was the case in Italy, Romania, and the United Kingdom. Some measures were also taken to help families cover the cost of natural gas and electricity. This was the case in Italy. Again, other countries may have implemented similar measures, but they were not considered part of the countries family policy and were consequently not reported by our country experts. Finally, some measures dealt more specifically with services to families. This was the case with the funding package introduced by the British government to help third sector organizations that were directly involved in supporting families during the recession. This covers support such as face-to-face, web and telephone information, and advice and support regarding parenting and couple relationship, finances, etc. This measure was temporary. 9

10 4.2. Measures that reduced the level of support for families Even though governments may have hoped to better support families during the crisis, in some cases their budgetary circumstances forced them instead to reduce the amount of support for families. Those measures are listed in Table 4. Although the list is relatively extensive, it should be stressed that it may not capture the full extent of cuts that were introduced to the governments social expenditure programs. As explained, our report is restricted to programmes designed for families. Table 4. Negative measures introduced in response to the crisis (i.e. measures that reduced the level of support for families) Czech Republic Estonia Reduction in the maternity allowance from 70% to 60% of salary (temporary measure from January to December 2010) No increase in parental allowance since Oct 2008 Permanent: Termination of income tax relief for the first child (continues for families with 2 and more children) Termination of compensation of study loans for new applicants who have children under the age of 5 Termination of the annual school allowance Suspension of childcare allowance while in receipt of maternity, adoption or parental benefit Reduction of care benefits for children under the age of 12 (from 100% to 80% of the salary) Temporary: The program 'A day care place for every child' (providing additional contribution towards childcare provision from the central budget) was put on hold Suspension, until the end of 2012, of the paternity leave benefit. Finland Reduction in the local authorities budget for daycare services Local authorities changed the regulations for municipal extras to child home care allowance to reduce demand of services Hungary The amount of the universal family allowances will not be increased in and Reduction to the home creation support programme for young families Ireland Latvia Lithuania Lowering of the eligibility to child benefit from 19 years to 18 (permanent measure) Various reductions in the supplementary rent allowance and related contributions (as of 1.6.) Reduction in the amount of family state benefit for the second or subsequent child (temporary) (-2012) Reduction in the duration of payment of family state benefit (age restrictions) (temporary) (May 2010) Family state benefits and parents' benefits will now be taxable (temporary until January 20112) Reduction in tax relief for dependents (temporary) (as of ) Reduction in the maternity leave benefits from 100% to 80% of salary (temporary) (Pending, scheduled to start Nov 2010) Decrease in the number of people eligible to parents' benefits (-2012) Introduction of limitations in the amount of maternity, paternal, and parents' benefits (pending) (Nov 2010) Maternity leave benefits (currently very generous) will be reduced as of July 2010: a parent on a parental leave of a child under 1 year old will be compensated 90% and a parent of a child under 2 years will receive 75% of her/his salary 10

11 Netherlands Decision not to increase the child-related budget and the family allowance (as of 1.1. ) Decision to lower the maximum income of families eligible for the child-related budget (as of 1.1. ) The measures listed above vary widely in nature, but in general they tended to be only temporary. Still, they undoubtedly have affected negatively numerous families. Our data do not however include information on how many families were affected by these cuts and to what extent they were affected. Faced with a need to A total of eight countries implemented measures that reduced the level of support for families. Among those, the countries that appear to have cut more severely in their support for families are those which we identified earlier as having been affected very strongly by the economic crisis: Estonia, Hungary, Latvia, and Lithuania. In the area of child and family cash benefits, the cuts aimed at reducing the duration of payment (for example by lowering the upper age limit), reducing the actual amount of benefits for some children (for example for the first or second child), reducing the support for families by making the benefits taxable, and/or reducing the tax relief for dependent children. In the area of maternity and parental leave, the cuts mainly affected the cash benefits paid during the period of leave. In three countries, the cuts were substantial: in the Czech Republic (reduction of the maternity allowance from 70% to 60% of salary), Estonia (suspension of the paternity leave benefit and reduction of care benefits for children under the age of 12 from 100% of the salary to 80%), and Latvia (reduction in the maternity leave benefits from 100% to 80% of salary). In Finland, cuts were also implemented in the area of childcare provision and early education. The consequences of these cuts can be considerable if they end up increasing the barriers to women s employment. Finally, two countries, Hungary and Ireland, introduced cuts to their housing subsidies programme. 11

12 5. OVERALL IMPACT ON THE LEVEL OF SUPPORT FOR FAMILIES It is very clear from the above discussion that the ways countries have responded to the crisis vary widely. While some have come up with additional (mainly temporary) measures to help families cope with the crisis, others had instead had to cut in benefits and services to families. And while we cannot assess the net impact of these changes on the overall level of support for families, it is possible to qualify the nature of the changes in the different areas of family policies Child and family cash benefits and tax relief The area of cash transfer to families in the form of cash benefits or tax relief for families with children is the one which has seen most changes since the beginning of the crisis. A total of 21 countries implemented measures in this area for a total of 43 changes. In about one-third of the cases, these changes were structural and worked towards expanding the level of support for families. In two-thirds of the cases, the changes were instead in direct responses to the economic crisis and comprised of both positive and negative measures. Two groups of countries stand-out. First, there are countries such as France, Italy, and the United Kingdom which have adopted numerous temporary relief measures for families. As mentioned earlier, most of these temporary relief measures consisted of relatively small amounts for each eligible family. The overall cost of such measures was however relatively large in some cases. For example, France introduced as a response to the crisis a one-off benefit of 150 euro paid to families with modest income and a schoolage child. An estimated 3 million families benefited from this measure for a total cost of 450 million euro to the government. Similarly, Italy introduced numerous temporary measures including a lump-sum bonus for low income families (between 200 and 1000 euro), a monthly subsidy of 40 euro for low income families with children up to the age of 3, and a lump-sum bonus for powdered milk and diapers for families with infants. As to the United Kingdom, the measures included various modifications of the countries child benefit and child tax credit: modifications that increased the level of support of government. Second, and in large contrast to the previous ones, there are countries where the changes were exclusively in the form of specific responses to the crisis and which reduced the level of support for families. This was the case in Estonia, Hungary, and Latvia. As discussed earlier, these were countries that were particularly hit by the economic recession and that appeared to have been unable to expand their support for families despite the growing needs of families Maternity, paternity, parental, and childcare leave and benefits Since 2008, numerous changes were also introduced to the area of maternity and parental leave and related benefits. A total of 17 countries implemented such changes. In the majority of cases the changes were structural and positive in that they expanded the level of support of government. In some cases, however, the changes instead reduced the level of support for families. Two groups of countries can be distinguished. There is first the group of countries where positive structural changes were introduced. This includes Finland, Germany, the Netherlands, Romania, Slovakia, Sweden, and the United Kingdom. The nature of the changes varies across countries but includes an 12

13 extension of the duration of the maternity or parental leave period, an extension of the coverage of the leave (i.e. who is eligible to it), and an increase in the benefits paid during the leave period. They were also changes that targeted specific groups, for example the extension of the father s leave in Finland, the extension of the leave for grandparents in Germany, and the introduction of a new Health in Pregnancy Grant in the United Kingdom. To this first group of countries, we should add the Czech Republic, Greece, and Poland where an extensive package of support was introduced to help parents reconcile family and professional life. The other group of countries are those where cuts were instead introduced to the maternity and parental leave scheme. This was the case in the Czech Republic, Estonia, Latvia, and Lithuania. As mentioned earlier, these cuts were extensive and reduced the duration of the period when benefits were paid, and/or the amount of benefits paid. In all cases these changes were in responses to the economic crisis Childcare and early childhood education Numerous changes were also introduced in the area of childcare and early childhood education. A total of 15 countries implemented such changes. In almost all cases these changes were positive and structural, reflecting a commitment of countries to expand this area of family policy. Some of these changes aimed at increasing the provision or quality of childcare services, while others aimed at reducing its cost to parents. In six countries, the new measures were directly targeted at kindergarten and preschool years (Austria, Ireland, the Netherlands, Slovakia, Slovenia, and Sweden). They aimed at extending these services and/or at reducing their cost. In only three countries, Estonia, Finland, the Netherlands, were cuts instead reported Housing benefits and subsidies A total of 10 countries reported changes to the area of housing benefits and subsidies. As mentioned earlier, we are however likely capturing only a fraction of all changes as this area of social policies is often not restricted to families with children. In the majority of cases, the changes expanded the level of support for families and were introduced as specific responses to the economic crisis. They aimed at reducing the cost of housing, especially for low income families, offering help to first-time buyers, reducing the cost of natural gas and electricity, and helping homeowners with the cost of their mortgage. For example, in the United Kingdom the new Support for Mortgage Interest aimed at assisting homeowners with the payment of the interest on their mortgage Services and benefits related to the care of adult or other dependent This area of family policy saw relatively little changes. Only Ireland and Sweden introduced positive structural measures in connection with the care of an adult dependent Other services and benefits Finally, there were a number of other changes including measures related to the provision of free or subsidized school meals (in Latvia, Poland, and Slovenia) (all positive structural measures), and measures aimed at increasing the level of support to third sector organization supporting families (in the United Kingdom). 13

14 6. IMPACT OF THE CRISIS ON THE DEMAND FOR FAMILY POLICY What was the impact of the economic crisis on families? We have little hard empirical facts to answer this question as the questionnaire was restricted to the impact of the crisis on the provision of support for families rather than on the demand for support. 7 However, what we know from other sources is that the crisis has not only affected low-income families but also middle-income ones. 8 Families who were already poor before the crisis may have seen their situation deteriorated, but the crisis has also affected families in the middle of the income distribution. In some cases, families have been directly hit through the loss of employment; in other cases they have seen a decline in their income as a result of a reduction of their working hours, and/or a reduction in their commission or bonus payments or 13 th month salary. We do not have yet cross-national data on these issues, but it is something that should be examined once the data are available. 7 We asked the experts whether information was available on the take-up of benefits and on the number of claimants but most measures were introduced too recently to have any data on their use. 8 Gauthier, A.H. (). Presentation made at the meeting of the EU experts on family policy, 26 November in Brussels. We also know that in several countries there has been an increase in the demand at food banks. 14

15 CONCLUSION Several conclusions can be drawn from the information received by the national experts. First, despite the crisis, continued structural changes to the family policy were introduced in most countries: changes that increased the overall level of support for families. What we however do not know is how these changes compared with previous years (i.e. were they larger or smaller?), and how much they added to the overall budget of governments for family policies. Second, most of the countries responses to the economic crisis were not part of family policy but were instead part of other areas of social policy (including employment and unemployment programmes). This is a conclusion that does not come up from the reports of the national experts, but that can be seen from the reports of the Social Protection Committee (which cover more areas than strictly family policy). Third, relatively few countries introduced positive changes to their family policy in direct response to the economic crisis. Countries that did introduce such changes did so through a series of temporary measures, usually involving relatively small amounts of money for each family, but often reaching a large number of families. A small number of countries, in contrast, introduced negative measures, that is, measures that reduced the overall level of support for families. Fourth, the countries responses to the economic crisis varied widely partly because of their financial circumstances. In particular, we noted the case of Estonia, Hungary, and Latvia for which governments had to introduce severe cuts in their budget and consequently to introduce measures that reduced their level of support for families. All three countries were among the most deeply affected by the economic crisis, and in the case of Hungary were already dealing with budgetary imbalances prior to the onset of the crisis. Fifth, the changes in family policies since 2008 varied also substantially depending on the area of family policy. Among the positive structural changes that were reported, the majority were in the area of maternity and parental leave policy and in the area of childcare. This reflects a continuous commitment of countries towards improving the reconciliation of work and family responsibilities. In contrast, most of the changes in family policies that were introduced in direct response to the economic crisis were in the area of cash transfers to families (child/family cash benefits and tax relief to families with children). Numerous positive responses to the crisis were also in the area of housing benefits and subsidies. Sixth, there were also contradictions among the changes introduced by countries with some resulting in an expansion of the level of support for families, and others going in the direction of a reduction of the level of support for families. Data on the total expenditures on family policies would be needed to assess the net impact of the changes on the overall support for families. Finally, we should add that by focusing only and specifically on measures that are part of the countries family policy, this report was unable to assess the overall impact of the crisis on families. This calls for further examination, especially since the impact of the crisis is likely to be long-term in numerous countries. 15

16 APPENDIX List of other documents consulted in the preparation of this report (in addition to the countries reply to our own questionnaire): - Updated joint assessment by the Social Protection Committee and the European Commission of the social impact of the economic crisis and policy responses (10133/1/09 REV 1 ADD 1) (Brussels, 29 May ) - Second joint assessment by the Social Protection Committee and the European Commission of the social impact of the economic crisis and policy responses (16169/09 ADD 1) (Brussels, 24 November ) Note, however, that these documents usually do not distinguish between structural changes to the family policies and changes directly in response to the crisis. 16

17 - Table A1: Gross domestic product, volumes; Percentage change per quarter Country 2008-q q q q04 - q01 - q02 - q03 Austria Belgium Bulgaria n/a n/a n/a n/a n/a n/a n/a Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom European Union ( countries) n/a = Not available Source of Data: Eurostat Last update: Date of extraction: 20 Jan :34:23 MET Hyperlink to the table: 17

18 Table A2: Harmonised unemployment rate (both sexes combined) by month Country m12 -m01 -m02 -m03 -m04 -m05 -m06 -m07 -m08 -m09 -m10 -m11 Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia n/a n/a Finland France Germany Greece n/a n/a Hungary Ireland Italy Latvia Lithuania n/a n/a Luxembourg Malta Netherlands Poland Portugal Romania n/a n/a Slovakia Slovenia Spain Sweden United n/a n/a Kingdom European Union (27 countries) n/a =Not available Source of Data: Eurostat Last update: Date of extraction: 20 Jan :44:52 MET Hyperlink to the table: 18