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The budget for dependency falls short in Spain

09.02.2010
A study carried out at the Universidad Carlos III de Madrid (UC3M) that evaluates the number of those affected by dependency and the costs associated with it in Spain, estimates that there are more than 900,000 people with a right to public benefits and that official numbers come up short in relation to initial forecasts.

For a dependent person to receive public aid, he or she must score at least 25 points on an evaluation scale (scales which measure the intensity of a situation) carried out by the corresponding official entities On average, only 22% of persons with disabilities are dependents with the right to benefits.

Taking this into account and using data from the Instituto Nacional de Estadística (National Statistics Institute - INE), estimates from this new study indicate that in 2010 the number of dependent persons entitled to benefits will be above 900,000, with approximately two-thirds being women. This research study, published in the journal Estudios de Economía, has been jointly carried out by Irene Albarrán and Pablo Alonso, of Universidad Carlos III de Madrid and Universidad de Alcalá, respectively.

The researchers made an estimation of the direct cost of care for these persons, not including the funds that would have to be invested in infrastructures. For 2010 those costs would be approximately between 12,500 million and 15,000 million Euros. “For 2015, when the Autonomía y Atención a la Dependencia) (Autonomy and Attention for Dependant Persons) (SAAD) should be fully functioning in Spain, our estimate would range between 17,000 million and 20,000 million Euros, an amount much higher than the 4,226 million that the Public Authorities plan to provide”, the UC3M Statistics Department Professor, Irene Albarrán, pointed out. In a nutshell, there would be a lag of a least 12,000 million Euros, in the best case scenario. “The Law of Dependency has not exactly followed what was set out in the White Paper of Dependency or in other previous studies which served as a reference point, which have led the estimates regarding the number of those affected, and the cost for services for them, to come up short”, the expert explained.

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Economic impact

Dependency has important economic consequences in terms of savings, investment, consumption, and the labor market. This phenomenon, the researchers noted, will make it necessary to earmark more human and economic resources for medical care and attention, above all for generations which are living longer, an intergenerational redistribution of resources and an increase in formal and informal care. According to one of the latest reports from the INE, the elderly population will double in the next 40 years. Their projections indicate that the over 64 age group will double in 2049, and would then represent 31.9% of the total population. Along these lines, the evolution of the dependent population cannot be studied in isolation with respect to the total population of Spain. Being aware of that fact, and despite the risk that such a long-term prediction entails, the estimates of the researchers- using the population projections of the INE- come up with a figure between 1.5 and 1.6 million persons in 2050, equivalent to a little more than 3% of the total population.

Because of this, an increase in health care and attention for these persons is expected, as well as an expanded role to be carried out by public as well as private insurers in covering the required services, according to the researchers. Due to the greater needs for financing, it would be wise to count on mechanisms for financing that would sustain a care system, and it is in this area where more advances need to be made, stated Irene Albarrán. In other countries with more experience in the area, financing proceeds to a larger degree from social security taxes from workers as well as employers. Concretely, in the German case, the social agents and the federal government are making the system viable without negatively affecting the competitiveness of the German economy.

In summary, the objectives of obtaining quality care for persons in dependency and establishing the “fourth pillar” of a Social Welfare State suppose, according the authors of this study, a greater economic effort than originally forecast by the Spanish economic authorities, which should lead to debate as to possible alternatives and the most appropriate ways to finance these services.

Ana María Herrera | alfa
Further information:
http://www.uc3m.es
http://www.uc3m.es/portal/page/portal/actualidad_cientifica/noticias/budget_dependency

Further reports about: Dependency UC3M economic consequences

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