VIII. THE SECONDARY DISTRIBUTION OF INCOME ACCOUNT
H. Social transfers in kind (D.63)
1. Introduction
| 8.99. | The only items other than balancing items recorded in the redistribution of income in kind account are social transfers in kind. These consist of individual goods and services provided as transfers in kind to individual households by government units (including social security funds) and NPISHs, whether purchased on the market or produced as non-market output by government units or NPISHs. They may be financed out of taxation, other government income or social security contributions, or out of donations and property income in the case of NPISHs. If it is not possible to segregate the accounts of social security funds from those of other sub-sectors of government, it may not be possible to divide social benefits into those provided by social security and others. Social security benefits in kind are subdivided into two types: those where beneficiary households actually purchase the goods or services themselves and are then reimbursed, and those where the relevant services are provided directly to the beneficiaries. | | | Text refers to: table 8.1.  |
| 8.100. | The number and type of social transfers in kind provided to households by government units reflects their general economic and social policy concerns. Whereas the recipients of current cash transfers may dispose of them as they wish, the recipients of social transfers in kind have little or no choice. The attraction of transfers in kind over transfers in cash to policy makers is that the resources transferred can be targeted towards meeting specific needs, such as health or education, and must be consumed in the ways that their providers intend. |
2. Social security benefits, reimbursements (D.6311)
| 8.101. | The reimbursement by social security funds of approved expenditures made by households on specified goods or services is a form of social benefit in kind. Examples of expenditures that may be reimbursable are expenditures on medicines, medical or dental treatments, hospital bills, optometrists' bills, etc. |
| 8.102. | When a household purchases a good or service for which it is subsequently reimbursed, in part or in whole, by a social security fund, the household can be regarded as if it were an agent acting on behalf of the social security fund. In effect, the household provides a short-term credit to the social security fund that is liquidated as soon as the household is reimbursed. The amount of the expenditure reimbursed is recorded as being incurred directly by the social security fund at the time the household makes the purchase, while the only expenditure recorded for the household is the difference, if any, between the purchaser's price paid and the amount reimbursed. Thus, the amount of the expenditure reimbursed is not treated as a current transfer in cash from the social security fund to households. |
3. Other social security benefits in kind (D.6312)
| 8.103. | These consist of social transfers in kind, except reimbursements, made by social security funds to households. Most are likely to consist of medical or dental treatments, surgery, hospital accommodation, spectacles or contact lenses, medical appliances or equipment, and similar goods or services associated with the provision of health care. The services may be provided by market or non-market producers and should be valued accordingly. In both cases any nominal payments made by the householders themselves should be deducted. The transfers should be recorded at the times the goods are transferred or services provided. |
4. Social assistance benefits in kind (D.6313)
| 8.104. | These consist of transfers in kind provided to households by government units or NPISHs that are similar in nature to social security benefits in kind but are not provided in the context of a social insurance scheme. Like social assistance benefits in cash, they tend to be provided under the following circumstances:
(a) No social insurance scheme exists to cover the circumstances in question;
(b) Although a social insurance scheme, or schemes, may exist, the households in question do not participate and are not eligible for its social benefits;
(c) Social insurance benefits are deemed to be inadequate to cover the needs in question, the social assistance benefits being paid in addition. |
5. Transfers of individual non-market goods or services (D.632)
| 8.105. | These consist of goods or services provided to individual households free, or at prices which are not economically significant, by non-market producers of government units or NPISHs. Although some of the non-market services produced by NPISHs have some of the characteristics of collective services, all the non-market services produced by NPISHs are, for simplicity and by convention, treated as individual in nature. Non-market producers are described in more detail in chapter VI. Services provided free, or at prices that are not economically significant, to households are described as individual services to distinguish them from collective services provided to the community as a whole, or large sections of the community. Individual services consist mainly of education and health services, although other kinds of services such as housing services, cultural and recreational services are also frequently provided. They may be provided either by market or non-market producers and are valued accordingly. They are described in more detail in chapter IX. |
| 8.106. | The services provided as social transfers in kind to households are recorded at the times they are provided. These are the times at which they are produced. Any goods provided directly to households by non-market producers should be recorded at the times the change of ownership takes place. |
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