Expense 135
6.93 Th ree types of recipients of grants are rec-
ognized in GFS: grants to foreign governments (261),
grants to international organizations (262), and grants
to other general government units (263). Th e category
of grants payable by government units to other gen-
eral government units has a nonzero value only in the
case of statistics compiled for a subsector of the general
government sector. For the general government sector,
these transactions are eliminated in consolidation. To
allow for consolidation, grants payable to other gen-
eral government units should be identifi ed according
to the subsector of the counterparty (see Table 6.7).
6.94 Grants payable distinguish current grants
(2611/2621/2631) and capital grants (2612/2622/
2632). Th e distinction between current and capital
grants is described in paragraph 5.103. If doubt exists
regarding the character of a grant, it should be classi-
fi ed as current. Th e nature of grants in kind, the time
at which a grant is recorded, and the valuation are dis-
cussed in paragraphs 5.104–5.105.
6.95 In the Statement of Sources and Uses of Cash,
the value of grants will be limited to grants paid in
cash. Grants in kind will not be recognized in this
statement since no cash fl ows related to the in-kind
transaction are recorded. However, any cash pay-
ments incurred in the own production of the goods
or services provided in kind will be included in the
respective expense items (i.e., compensation of em-
ployees and purchases of goods and services).
Social Benefi ts [GFS] (27)^34
6.96 Social benefi ts are current transfers receiv-
able by households intended to provide for the needs
that arise from social risks—for example, sickness,
unemployment, retirement, housing, education, or
family circumstances. Th ese benefi ts are payable in
cash or in kind to protect the entire population or spe-
cifi c segments of it against certain social risks. Social
risks are events or circumstances that may adversely
aff ect the welfare of the households concerned either
by imposing additional demands on their resources
or by reducing their income. Examples of social ben-
efi ts are the provision of medical services, unemploy-
ment compensation, and social security pensions. For
(^34) Th e institutional units involved, classifi cation, and record-
ing of fl ows and stock positions related to social protection are
described in Appendix 2.
a complete discussion on social protection, see Ap-
pendix 2.
6.97 Not all social benefi ts as defi ned in the 2008
SNA are classifi ed in this GFS expense item (see
Table 6.8). Social benefi ts [GFS] (27) exclude:
- Th e payment of pensions and other retirement
benefi ts through employment-related social
schemes, which are recorded in GFS as reduc-
tions in liabilities.^35 - Goods and services produced by government and
transferred to households are expense transac-
tions not classifi ed as social benefi ts. Instead, the
expense transactions are recorded as production
expenses as part of compensation of employees,
use of goods and services, and consumption of
fi xed capital, as appropriate.^36
6.98 Social benefi ts are classifi ed fi rst according to
the type of social protection arrangement governing
their payment: social security, social assistance, or
employment-related social insurance schemes, and
(^35) In the 2008 SNA, all payments of pension and other retirement
benefi ts are recorded as transfer payments: those paid through
social security schemes are solely transfer payments, whereas pay-
ments through employment-related schemes, other than social
security (defi ned contributions or defi ned benefi ts), are fi rst
recorded as transfer payments to households in the use of income
account, and then as a change in pension entitlements in the
fi nancial account. Subsequently, the reductions in liabilities are
recorded as an adjustment entry made to remove any inconsis-
tency between the benefi ts and the change in liabilities.
(^36) In the 2008 SNA, when a general government unit produces
goods and services that are distributed as social benefi ts, the
expense items related to the costs of producing them, such as
compensation of employees, are the same as in this Manual. How-
ever, in the 2008 SNA, unlike this Manual, the value of the goods
and services produced is also included as social benefi ts.
Table 6.7 Detailed Classifi cation of Grants (26)
26 Grants
261 To foreign governments
2611 Current
2612 Capital
262 To international organizations
2621 Current
2622 Capital
263 To other general government units
2631 Current^1
2632 Capital^1
(^1) Further breakdown/“of which” lines could allow for the identifi -
cation of subsectors and individual units (see Table 3.1).