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    Cost of ageing to culminate in 2040

    © Belga
    © Belga

    Social expenditure will go from 25.1% GDP in 2017 to 27% in 2070, which is a rise of 1.9 GDP percentage points, projects the Study Committee on Ageing (SCA) in an annual report presented Monday in the presence of the Minister of Pensions Daniel Bacquelaine. The budgetary cost of ageing will decrease after 2040 (-1.7% between 2040 and 2070), but, before that, it will have increased by 3.5 points.

    The increase of social expenditure should therefore culminate in 2040, in particular pension and health care expenditure. The elderly’s dependence coefficient (ratio between population 67 plus and that of 18 to 66 years old) will rise significantly within the years to come, according to the Committee’s reference scenario.

    From 2040 on, this coefficient will stabilize progressively. On top of that, the social allocations will be upgraded; but the solidarity inter-generational pact is planning on a slower evolution than that of wages and GDP increase between 2040 and 2070.

    Simultaneously, the pensioners’ risk of poverty will decrease continuously until the beginning of the 2050s, before it stabilizes, according to the SCA.

    This decline can be explained by the upgrading of the pensioners’ minimal allocation (quicker than the wages and the poverty threshold until the mid 2030s), as well as by the increase of women’s activity rate.

    This report “confirms once again that governmental reforms diminish the cost of ageing,’’ commented Minister Daniel Baquelaine (MR).

    Oscar Schneider
    The Brussels Times