Herman Deleeck Centre for Social Policy

Reference budgets

Reference budgets

Introduction

Reference budgets (RBs) are priced baskets of goods and services that represent a given living standard. In Belgium they have been developed since 2008 and illustrate what specific household types minimally need to participate adequately in society. Social participation is defined as being able to adequately play the various social roles one should be able to play as a member of society (and having a choice to deviate if one wants to instead of due to a lack of resources).

Content

RBs are based on a theoretical framework inspired by the theory of human need (Doyal and Gough 1991) who developed a non-exhaustive list of universal and intermediate needs that have been translated to the specific socio-cultural context. Based on this, eleven intermediate needs are defined that should be fulfilled for adequate social participation in Belgium:

  • adequate housing
  • food
  • clothing
  • health care
  • personal care
  • maintaining social relations
  • safety in childhood
  • rest and leisure
  • mobility
  • security

These needs are translated into concrete baskets containing lists of essential goods and services.

Information sources

The content of the baskets is defined by relying on a wide set of information sources.

  • (inter)national guidelines and recommendations
  • scientific and expert knowledge
  • survey data and focus group discussions

Pricing method

The baskets are priced at minimum but acceptable prices in well spread retailers.

  • Minimum: using the lowest prices but allowing for some variation. For instance, food has been purchased at the lowest prices in the cheapest supermarket, but the total budget has been multiplied by 10%, to ensure that people are able to buy their food in a supermarket within reach.
  • Acceptable: To ensure acceptable prices, the pricing strategy, including the choice of retailers, was discussed in focus groups.

Due to the variability in rental prices on the private housing market, housing costs of private tenants are defined by calculating the median price of dwellings corresponding to a list of quality criteria based on the Vlaamse woonsurvey.

Hypothetical household types

RBs are developed for specific well-defined household types:

  • single or couple pensioner (65+)
  • single or couple adults at active age without or with 1 or 2 children
    • the adults are inactive at the labour market or with 1 adult working full-time
    • ages of the children vary between 2 and 18 years old.

In order to define a minimum benchmark of adequate social participation, several assumptions have beenmade. The family members are:

  • in good health and without disabilities
  • well-informed and have the necessary competences to live on a low budget
  • have access to essential publicly provided goods and services (e.g. health care, education, public transport)
  • do not need a car
  • renting a dwelling at the private or social tenant market or owning a dwelling without paying mortgage. The dwelling is assumed to be of good quality.

In 2010, there have been some extensions to the existing hypothetical households, including for instance the other regions in Belgium: Wallonia and Brussels, families with one student and families with one member with a long-term disease.

Data frequency

Pricing of the baskets: yearly re-pricing by own price survey (2008-2019).
Content of the baskets: every five years the content is re-evaluated to capture changes in society, by consultation of experts and focus groups (2008, 2013, 2018).

Cross-national comparability

Reference budgets have been constructed for a wide range of purposes in nearly all EU Member States, and are increasingly recognised by researchers and policy makers alike as a valuable tool for evaluating the adequacy and impact of social policies. However they are not comparable across countries.

There have been two European projects in which for the first time RBs have been developed in a cross-nationally comparable way. The projects were guided by the Herman Deleeck Centre for Social Policy in cooperation with an EU-wide network of country teams and social policy researchers. The network is currently maintained through the European Platform on Reference Budgets.

The common theoretical and methodological framework is inspired by the Belgian RB approach (for more information see Carrillo et al. 2019, Goedemé et al. 2015). The cross-nationally comparable RBs are developed for the following household types:

  • single or couple adults at active age without children
  • single parent or couple at active age with 1 or 2 children
  • children are between 6 and 18 years old
  • similar assumptions as specified for BE case (good health, self-reliant, well-informed).

The IMPROVE project

  • Year: 2014
  • Scope: Large cities in 6(+1) different EU member states. Antwerp (BE), Barcelona (ES), Athens (EL), Milan (IT), Helsinki (FI) and Budapest (HU). Luxembourg joined later following the same method.
  • Content: full specified reference budgets containing all baskets.

EU Pilot project for the development of a common methodology on reference budgets

  • Year: 2015
  • Scope: Capital cities of 26 EU member states (not including UK & IE)
  • Content:
    • Common method for comparable RBs in 26 EU MS
    • Food basket for 26 countries
    • Health care, personal care & housing for 8 countries

Access

Basic and aggregated data, including a personal budget calculator can be accessed online at the website of CEBUD. For accessing detailed data, as well as for using the online application REMI, a request has to be submitted to CEBUD.

For the cross-nationally comparable RBs, you can find basic information on the website of the EU RB Platform. Here you can find important publications including aggregated data. For accessing detailed data, a request has to be submitted to Tess Penne.

Publications and documentation

Belgian Reference Budgets

  • Penne., T., Cornelis, I. & Storms, B. (2019). Reducing Out-of-pocket Costs to Improve the Adequacy of Minimum Income Protection. Reference Budgets as an EU Policy Indicator: The Belgian Case. CSB Working paper Series, No.19.06. Antwerp: Herman Deleeck Centre for Social Policy, University of Antwerp.
  • Storms, B. & Van den Bosch, K. (2009). Wat heeft een gezin minimaal nodig? Een budgetstandaard voor Vlaanderen. CSB-berichten, mei 2009. Antwerpen: Centrum voor Sociaal Beleid Herman Deleeck.
  • Storms, B., Goedemé, T. & Van den Bosch, K. (2010). Het socio-vitaal minimum anno 2010. CSB-berichten, december 2010. Antwerpen: Centrum voor Sociaal Beleid Herman Deleeck.
  • Storms, B., Penne, T., Vandelannoote, D. & Van Thielen, L. (2015). Is de minimuminkomensbescherming in ons land doeltreffender geworden sinds 2008? Wat leren we uit de geüpdatete referentiebudgetten? CSB-berichten, april 2015. Antwerpen: Centrum voor Sociaal Beleid Herman Deleeck.

Cross-nationally comparable Reference Budgets

  • Goedemé, T., et al. (2017). What Does it Mean to Live on the Poverty Threshold? Lessons From Reference Budgets. CSB Working Paper Series, No. 17.07. Antwerp: Herman Deleeck Centre for Social Policy, University of Antwerp.
  • Goedemé, T., Penne, T., Swedrup, O., Van den Bosch, K., & Storms, B. (2019). Exploring common ground for defining adequate social participation in 24 EU capital cities. CSB Working Paper Series. Antwerp: Herman Deleeck Centre for Social Policy, University of Antwerp.
  • Penne, T., Hufkens, T., Goedemé, T., & Storms, B. (2018). To what extent do welfare states compensate for the cost of children? A hypothetical household approach to policy evaluations. CSB Working Paper Series, No. 18.11. Antwerp: Herman Deleeck Centre for Social Policy, University of Antwerp.
  • Penne, T. and Goedemé, T. (2019). Putting inadequate incomes at the heart of food insecurity. A study of the financial constraints to access a healthy diet in Europe. CSB Working Paper Series No. 19.10. Antwerp: Herman Deleeck Centre for Social Policy, University of Antwerp.

For a brief and clear overview of the common method used to develop cross-nationally comparable RBs:

  • Carrillo-Álvarez, E., Penne, T., Boeckx, H. Storms, B., Goedemé, T. (2019). Food Reference Budgets as a Potential Policy Tool to Address Food Insecurity: Lessons Learned from a Pilot Study in 26 European Countries. Int. J. Environ. Res. Public Health, 16(1).
  • Goedemé, T., Storms, B., Stockman, S., Penne, T., Van den Bosch, K. (2015). Towards cross-country comparable reference budgets in Europe: first results of a concerted effort, European Journal of Social Security, 17(1), 3-30.