Transfer payment

Transfer performance is in economics a collective term for government benefits to individuals and companies without a simultaneous economic contribution made ​​by the transferee.

General

A transfer refers to all monetary and real income transfers that flow from the state to non-government bodies and from these to the state. As a "state" are all organized under public law bodies ( local authorities and social security funds), non-governmental bodies, the private households and businesses. From the perspective of welfare recipients, there are positive and negative transfers. To positive transfers is when public sector bodies providing services to welfare recipients, while negative transfers exist when public entities require services from others. Are the economic circumstances of importance for both transfer paths. At negative transfers it depends on the capacity of the taxpayer, at benefits in the context of positive transfer, the need of the recipient is crucial. While transfer payments from the perspective of the paying state are considered, they are called from the point of view of the receiver transfer income.

Content and types

The idea of the transfers based on the idea of solidarity, according to which the needy are to be supported by stronger economically. For transfers but this is not always the case. In addition to cash payments ( cash transfers ) the state power can arise from a tax subsidy, also freight services than so -called real transfers ( allocation of social housing, educational opportunities ) possible. Direct transfers are all services that directly improve the economic situation of the recipient such as child support or the collection of direct taxes by the tax law. Indirect transfers exist especially in the reduction of the tax burden because the state waived income (such as child allowances or depreciation).

An economic consideration of the transfer recipient (such as by working in the complement) is performed at most later, indirectly or not at all. For child support or federal financial aid while there are compensatory, but these are not directly economically relevant ( parenting and study ). Under economic consideration is meant direct real or monetary benefits of the transfer recipient to the economy. Benefits from insurance companies are no transfers, since a direct consideration in the form of contributions has been rendered.

Redistribution policy

Transfer services are part of the state redistribution policy. The primary income distribution is carried out by the participation of economic sectors in the economy with the aim of earning an income ( wages / salaries, interest income, Miet-/Pachteinnahmen, profit). However, this creates social injustices that are to be compensated by a secondary distribution of income. A secondary income distribution takes place through transfer payments. Whether and to what extent a State has an interest in redistributive policies, provides information on the prevailing economic order. A state with little or without any redistribution is capitalist oriented, while welfare states have a high proportion of secondary distribution of income. Statistically give the national income and transfers together private income:

Are the transfer income equal to zero, corresponding to the private income of the national income.

Follow

Transfers result in government budgets to overspend or shortfall, so pressures on available resources and can cause or increase budget deficits. In budgetary terms, lead transfer payments to unproductive expenditure, which (initially or permanently) face no immediate revenue or even loss of revenue ( in tax subsidies ) that generate (initially or permanently) any other income.

The set up in 1977 by the federal government "Transfer - Enquete Commission " had the job " represent all transfer effects between the government sector ( local authorities and social security funds) and the household sector ... " They took the view that " specific against the Backing up individual groups in society no objection " was. However, that is only " on the condition that the associated financial burden would also even worn by this group and not saddled with the general public ." This is exactly what happens with the farmers, at the Miners and the public sector.

Social rate

An indicator for measuring state benefits is the social rate. It is determined by the transfers ( transfers of social income ) to gross domestic product (GDP ) are compared.

While in Germany accounted for only 18.3% of GDP on transfers ( transfers of social income, tax credits and benefits in kind) in 1960, 1975, transfer payments amounted already to 30.7 % of GDP and had thus reached its highest level for a long time. Following reunification in 1990, they were - because of the enormous increase in GDP of 9.1% - 24.1 %, only slightly above the low levels of the 1970s, and then continuously increasing. In 1997 they were again at 29.1%, to climb around 2003 to the absolute peak of 30.8%. Cuts in social spending, labor market reforms and the economic boom ensured that 2008 the social rate was 28.0% of GDP.

However, benefits are expenditures that hardly react to the economic development (such as pensions) or even counter-cyclical behavior (unemployment benefit ). Therefore, a recession leads to remanences because social benefits even rise, so that their percentage increases in GDP. While the national average, the rate was the recipient of minimum social security in 2012 to 9% of the total population, 19.5% with Berlin took the top spot.

Applications

Germany

The state benefits in Germany include unemployment benefit II ( colloquially Hartz IV), social assistance, training aids ( colloquially EED), parental allowance, child benefit, housing benefit and formerly the home owner.

The ( state ) insurance such as unemployment insurance, pension, health and long term care are no transfers, since usually in the form of financial compensation must be provided by insurance premiums. Nevertheless, there are some elements of redistribution within the insurance. To receive every insured in the statutory health insurance have the same health care service independent of the amount of his deposit, this corresponds to a transfer of power in favor of people with small incomes. Even people without their own income beitragslos be insured ( eg family insurance). Health insurance contributions for recipients of unemployment benefit II takes over the Agency. This looks different in the unemployment and pension insurance, where the posts are as well as the benefits paid proportional to income (below the upper limit).

Within a State, regions with weaker economic performance supported by the government or by a balance among the regions. In Germany, the Länder financial equalization is used to approximate the performance of the different federal states.

Non-governmental transfers

There are a number of transfers that are not government- organized centrally. These include reduced transport costs in public transport or reduced entrance fees to museums, swimming pools or at cultural events. Donations in kind ( eg in the table, clothes donations) are non-governmental Real transfers. There are also private transfer payments paid by law as the continued payment of wages in case of illness or study leave.

International transfers

International transfers are about reparations, restitution, development aid, free goods or military aid. Intermediate states of a state alliance such as the European Union is an attempt by transfer payments, to level the economic disparities between weaker states, regions and sectors of the economy stronger, so that they are able to successfully participate in the competition. The World Bank, the International Monetary Fund and the United Nations spread from the contributions of net payer transfers. The payments from the IMF or World Bank to a bailout of poor or heavily indebted developing countries (see debt ) are only transfer payments, if it is not loans. The debt arises from the perspective of the creditor state out as an afterthought, involuntary transfers.

Effect and criticism

Transfer services are criticized for various reasons. This includes the assumption that transfer payments can reduce the motivation of the transfer recipient and induce to a driving mentality. The lower the income gap between earned income and social transfers, the lower is the willingness to look at the first labor market activity. In addition, many transfers are not sufficiently tied to need, so that to a large part of the population can become beneficiaries. According to high revenue to finance a developed transfer system must be achieved. Especially low-income earners who pay taxes but receive no transfers can be penalized financially.

With regard to social and family policy distinguishes between transfers and infrastructure services. If these two power types with each other in competition for limited resources, a primary orientation is so far criticized on transfer payments, as they delimit the expansion of social infrastructure such as education and childcare services and thus the affected critical resources they need to independently livelihood, not available.