## _cr15265

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### Preface — mission and engagements
- A technical assistance mission visited Ljubljana during April 30–May 12, 2015 to advise on establishing a spending review process.
- Meetings were held with: Minister of Finance, Mr. Dušan Mramor; Minister of Health, Ms. Milojka Kolar Celarc; University vice-chancellor (and nominee for Minister of Education), Ms. Maja Makovec Brenčič; Ministry of Finance State Secretaries, Mr. Bojan Pogačar and Ms. Mateja Vraničar; Budget Director, Ms. Saša Jazbec; senior officials from Ministries of Labor, Family, Social Affairs, and Equal Opportunities, Health, Education, and Sport; Office of the Prime Minister; IMAD; and the Slovenian Court of Audit.
- Acknowledgements: Ms. Ema Rode for coordinating the mission; interpreters Ms. Maja Viteznik, Mr. Marko Rant, and Mr. Matej Sodin; and Mr. David Coady, Division Chief of FAD’s Expenditure Policy Division, and his staff for input to the international benchmarking exercise.

### Executive summary — fiscal context and priorities
- Fiscal situation and legacy shocks:
  - Real GDP declined by around 10 percent after the financial crisis.
  - Public support to failing domestic banks required around 10 percent of GDP.
  - Fiscal deficits rose from near balance in 2007 to a deficit of almost 14 percent in 2013.
  - Public debt quadrupled to around 80 percent of GDP.
- Current trajectory and commitments:
  - The fiscal deficit has declined to around 4 percent of GDP (post bank-support).
  - Debt is anticipated to continue to increase, to around 90 percent of GDP by 2020.
  - In the latest EU Stability Pact the government committed to a ½ percent of GDP reduction of the structural fiscal deficit each year for the next four years.
  - An adjustment of some ¾ percent of GDP is necessary to bring debt down to under 80 percent of GDP by 2020.
- Nature of past consolidation:
  - Consolidation to date has largely relied on one-off measures and horizontal, across-the-board cuts (e.g., freezes on pension and wage indexation and hiring freezes).
  - These measures have limited further scope and face political pressure to be reversed.
- Rationale for a structured spending review:
  - Expenditure levels have increased by over 5 percent of GDP since 2008.
  - A focused spending review is underway, targeting large-ticket areas: Health, Education, and Social Welfare (pensions).
  - Health is subject to a stand-alone spending review with World Health Organization support; Education and Social Welfare have new working groups (terms of reference need formal agreement).
- Institutional and quantitative tasking:
  - Explicitly identify and quantify spending pressures (parameter and policy pressures).
  - Embed the spending review process formally, preferably as an additional provision in the Public Finance Law (under review).
  - Improve the quality of program performance information to focus on outcomes.
  - Overall savings task of €200m a year is considered likely to be a conservative estimate.

### Purpose, objectives and methodology of the spending review
- Objective: advise on establishing and operationalizing a spending review process focused on Social Benefits, Education, and Health to identify efficiencies, reallocate resources to higher priorities, and improve value for money.
- Threefold objectives:
  - Assist medium-term fiscal consolidation by identifying a menu of high-quality potential savings measures.
  - Improve allocative efficiency by shifting expenditure from lower to higher priority areas.
  - Improve value for money by identifying inefficient spending where similar outcomes can be achieved with reduced inputs.
- Core evaluation criteria:
  - Alignment with government policy priorities.
  - Available evidence on program performance, including cost-effectiveness.
  - Scope to improve efficiency through program design, service delivery, or administrative simplification.
  - Scope to better target programs and remove duplication.

### Overall government spending — key statistics and drivers
- Slovenia’s total public spending is high relative to comparators and has increased by around 5 percentage points of GDP since 2008.
- Table (changes 2008 → 2013, percent of GDP; difference shown as ppts):
  - Total expenditure: 44.1 → 49.1; difference 5.0
  - Current spending: 38.2 → 44.9; difference 6.7
  - Compensation of employees: 11.0 → 12.3; difference 1.3
  - Goods and services: 6.0 → 6.7; difference 0.7
  - Interest payments: 1.1 → 2.3; difference 1.2
  - Social benefits: 16.6 → 19.9; difference 3.3
  - Capital spending: 5.5 → 4.2; difference -1.3
  - Functional highlights (2013–2008 differences, percent of GDP): General public services +1.7; Health +0.7; Education +0.4; Social protection +2.8
- Wage bill:
  - Average wage of government employees ≈ 1.6 times GDP per capita versus EU average 0.9.
  - Public administration employees with tertiary qualifications 56.7 percent in 2011 versus EU-28 average 37.5 percent.
- Government employment:
  - Lower than EU average but on an upward trend since 2004.
  - Employment increases driven by education and health.

### Education — findings and potential savings
- High-level facts:
  - Slovenia’s education spending is the fourth highest share of GDP in the EU and the highest among CESEE comparators (2012).
  - High spending concentrated in primary and secondary education; pre-primary and tertiary broadly in line with EU averages.
- Employment and enrolment trends (2000–12):
  - Teaching staff increased by 27 percent while enrolled people fell by 5 percent.
  - Tertiary: students +7 percent; teaching staff +103 percent.
  - Basic education: enrolled pupils -11 percent; teachers +14 percent.
  - Freeze on aggregate teaching levels since 2012 coincided with fall in student population.
- Efficiency indicators:
  - Among lowest student-teacher ratios in OECD in pre-primary and lower secondary.
  - Net primary education teaching contact hours at OECD low of 22 hours.
  - Large variation in class sizes: range 4.5 to 24.2 pupils; around 40 percent of schools have class sizes <15; legal limit is 28.
  - 50 percent of primary schools have less than 200 pupils.
- Outcome juxtaposition:
  - PISA scores around OECD average while spending is around 1 percent of GDP higher than countries with similar outcomes.
- Potential reform levers and savings options:
  - Raising pupil-teacher ratios and class sizes, particularly in pre-primary and lower secondary.
  - Optimizing the school network, addressing overcapacity in non-geographically isolated schools.
  - Increasing teacher contact hours from current OECD low of 22 hours.
  - Tightening eligibility and monitoring for tertiary student benefits; link state financing to outputs rather than lump-sum.

### Health — findings and potential reforms
- Key statistics and projections:
  - Health spending projected to increase from 6.3 to 8.2 percent of GDP by 2060.
  - Health adjusted life expectancy is 71 in Slovenia, highest among CESEE comparators.
  - Spending in health is around 30 percent higher than countries with similar life expectancies.
- Identified inefficiencies:
  - Continued reliance on costly inpatient and specialist care.
  - Insufficient partnership with private sector in ambulatory settings.
  - Historically generous primary health care benefit package.
  - Variable quality of care not consistently targeted to reward high performance.
- Potential reform focus areas:
  - Strengthen primary health care by expanding integrated practices for chronic conditions and early detection.
  - Develop efficient provider payment systems for hospitals.
  - Use appropriate co-payments combined with a cost-effective basket of services.

### Pensions and social benefits — findings, projections and options
- Fiscal magnitude and trends:
  - Social benefits increased by more than 3 percentage points of GDP during 2007–13 to more than 18 percent of GDP.
  - Pension spending accounts for about two-thirds of social protection spending.
- Poverty and structural concerns:
  - Poverty among the elderly is relatively high despite large pension spending, linked to high early retirement rates and fewer contributory years.
- Projections and demographic pressures:
  - Pension spending projected to increase by 6 percent of GDP by 2050.
  - Old age dependency ratio projected to double by 2050.
  - System dependency ratio anticipated to increase from 67 percent now to 145 percent.
- 2012 pension reforms (main measures and fiscal impacts):
  - Gradual increase in statutory retirement age to 65 for both men and women.
  - Tightening early retirement conditions; introduction of early retirement penalties.
  - Increasing averaging period for pensionable earnings from 19 to 24 years.
  - Indexing benefits to composite of wages and prices (60:40), with indexation frozen during 2012–15.
  - Freeze in indexation contributed around 0.3 percent of GDP over its two year period; other reforms anticipated to have modest long-term impact—in the range of 2 percent of GDP by 2050.
- Remaining issues and candidate reforms:
  - Benefit indexation remains generous; pension bonus represents 0.35 percent of GDP.
  - Generous tax treatment: only pensions exceeding 1095 per month (110 percent of the average wage) are subject to taxation.
  - Potential measures: tighten benefit indexation, adjust tax treatment, restrict early retirement incentives, reduce recognition of non-contributory periods.
- Potential savings:
  - These and other potential reforms to the pension system could yield savings of 0.6 percent of GDP in the near term, and 2.6 percent of GDP by 2050.

### Spending review design, process and governance
- Design principles and lessons:
  - Successful reviews set objectives at the outset, provide clear saving targets, adopt a medium-term perspective, establish a decision making committee, integrate into annual budgets, and leave time for implementation.
  - Examples of targets elsewhere: Canada (5 percent by year three), France (10 percent non-salary admin reduction by year three), Netherlands (20 percent reduction over four years).
  - Cautionary evidence: Greece—about half of options identified were not adopted or rejected by the constitutional court.
- Recommended two-level structure:
  - Technocratic level: Working Groups to examine education and social benefit programs and identify saving proposals (Health working group exists).
  - Policy-making level: Expenditure Review Committee (sub-set of Cabinet) to review, assess and agree measures.
- Working groups composition and roles:
  - Broad representation: MoF, line ministries, external experts (including IMAD), possible PM’s Office representation.
  - Chaired by a senior official from the MoF (the Budget Director and her deputy).
  - Terms of reference to be agreed between the Minister of Finance, Minister for Education, Science and Sport, and Minister for Labor, Families, Social Welfare, and Equal Opportunity.
- MoF central role:
  - Provide guidance on timetable, outputs, review criteria, templates.
  - Challenge line ministries, ensure technical consistency in costings, test credibility of saving options, and consolidate proposals.

### Process, timetable and deliverables
- Key timing constraints:
  - To feed into the 2016 budget, saving options would need to be finalized by around mid-July 2015.
  - Working groups should prioritize largest or fastest growing programs and develop conservative menus of saving options.
- Immediate (1–3 months) recommendations:
  - Recommendation 3.1: Formalize working groups for education and social benefits with MoF, relevant agency, PM’s Office and external experts.
  - Recommendation 3.2: Agree and communicate terms of reference.
  - Recommendation 3.3: MoF to develop a template submission for spending review proposals.
  - Recommendation 3.4: Provide working groups with minimum quantum of saving options to be identified.
  - Recommendation 3.5: Formalize decision making arrangements; consider Expenditure Review Committee of Cabinet.
- Short-term (3 months to 1 year) recommendations:
  - Recommendation 3.6: Continue to identify structural savings measures for inclusion in the 2016 EU stability program.
  - Recommendation 3.7: Consider including a provision in the Public Finance Act establishing a regular spending review process.
- Medium-term (1–2 years) recommendations:
  - Recommendation 3.8: Rationalize performance objectives and indicators and align them with measures from spending reviews.
  - Recommendation 3.9: Review format and contents of performance annexes and strengthen ongoing monitoring.
- Indicative action plan (selected deadlines):
  - Formally appoint members of the working groups — Mid-May 2015.
  - Agree and issue terms of reference for the working groups — Mid-May 2015.
  - Establish Expenditure Review Committee of the Cabinet — Mid-May 2015.
  - Commence meetings of the working groups — Mid-May–Mid-July 2015.
  - Finalize initial program evaluations — Mid June 2015.
  - Finalize policy recommendations for 2016 budget — Early July 2015.
  - Submit consolidated proposals for decision — Mid-July 2015.
  - Decision on measures for 2016 medium-term budget framework — End-July 2015.
  - MoF sends binding spending ceilings to line Ministries — July 31, 2015.

### Policy proposal and submission requirements
- Each policy proposal submitted to ministers should include:
  - The fiscal impact for the Budget and three forward years, with costings using consistent methodologies and assumptions across programs.
  - The public policy rationale for the proposal.
  - The impact on affected groups and any social, regional or economic consequences.
  - Legislative requirements, implementation arrangements (including whether the measure could be implemented as part of the 2016 Budget or requires further development), and the process for consultation if required.
- A consolidated list of spending pressures should be presented to ministers alongside saving options, detailing fiscal impact over the budget and three forward years.

### Legislative underpinning and performance information
- Public Finance Law (PFL) of 1999 (as amended) is the main legislative instrument; PFL under review with planned amendments in 2015 to complement a new Fiscal Rules Act.
- Recommendation: include provisions in planned 2015 PFL amendments to require periodic spending reviews and upgraded performance indicators.
- Current performance information:
  - Published with the budget but insufficiently systematic for robust spending review use.
  - Example typology (Health policy area): 82 indicators total — 34 input, 35 output, 13 outcome indicators.
  - Analysis shows many targets already achieved at outset, incomplete baseline/target/actual data, and misalignment with funding changes.
- Recommendation: rationalize number of performance objectives and indicators and improve the quality and accessibility of performance annexes.

### Templates and decision-making examples (Appendices II–IV)
- Program submission template includes:
  - Resourcing (€ ‘000) rows for 2015 Baseline through 2019 FY3 with Programme, Administrative and Payroll expenditure fields (template default values 0.0).
  - Background and assessment guidance prompts (alignment, effectiveness, efficiency).
  - Policy proposal template with financial implications for 2016–2019 (default 0.0 values).
- Example decision-making template (Appendix III) structure:
  - PROGRAM — Budget Impact ($m) cost (-) / saving (+) across 2015–2019 and Total.
  - Recommendation options A/B/C, memo of total resourcing, policy description, public rationale, impacts, sensitivities, implementation and stakeholder reaction.
- Example policy submission (Appendix IV) — Social benefits: Child Allowance:
  - Recommendation example totals:
    - Option A – Change the income taper rate: 2016: 6.5; 2017: 6.6; 2018: 6.7; 2019: 6.8; Total: 26.5
    - Option B – Tighten the means test: 2016: 13.7; 2017: 14.0; 2018: 14.2; 2019: 14.4; Total: 56.3
    - Option C – Pause indexation for four years: 2016: 0.5; 2017: 1.5; 2018: 2.5; 2019: 3.6; Total: 8.0
  - Current and projected total resourcing (memo): 2015: 65.9; 2016: 66.4; 2017: 67.5; 2018: 68.6; 2019: 69.7
  - Affected population: Currently around 200,000 families benefit from the Child Allowance; Option A affects 64,500 families; Option B affects around 44,650 families.
  - Option matrices provided with precise current, revised and change amounts for income bands and child order (values preserved in template).

*Source: _cr15265 - Preface and selected chapters (IMF technical assistance mission to Slovenia, April 30–May 12, 2015).*

### Preface ................................................................................................................

### _cr15265 - Preface

### Preface: mission and engagements
- A technical assistance mission visited Ljubljana during April 30–May 12, 2015 to advise on establishing a spending review process.
- Meetings were held with: Minister of Finance, Mr. Dušan Mramor; Minister of Health, Ms. Milojka Kolar Celarc; University vice-chancellor (and nominee for Minister of Education), Ms. Maja Makovec Brenčič; Ministry of Finance State Secretaries, Mr. Bojan Pogačar and Ms. Mateja Vraničar; Budget Director, Ms. Saša Jazbec; senior officials from Ministries of Labor, Family, Social Affairs, and Equal Opportunities, Health, Education, and Sport; Office of the Prime Minister; IMAD; and the Slovenian Court of Audit.
- Acknowledgements: Ms. Ema Rode for coordinating the mission; interpreters Ms. Maja Viteznik, Mr. Marko Rant, and Mr. Matej Sodin; and Mr. David Coady, Division Chief of FAD’s Expenditure Policy Division, and his staff for input to the international benchmarking exercise.

### Executive Summary — fiscal context and priorities
- Fiscal situation and legacy shocks:
  - Real GDP declined by around 10 percent after the financial crisis.
  - Public support to failing domestic banks required around 10 percent of GDP.
  - Fiscal deficits rose from near balance in 2007 to a deficit of almost 14 percent in 2013.
  - Public debt quadrupled to around 80 percent of GDP.
- Current trajectory and commitments:
  - The fiscal deficit has declined to around 4 percent of GDP (post bank-support).
  - Debt is anticipated to continue to increase, to around 90 percent of GDP by 2020.
  - In the latest EU Stability Pact the government committed to a ½ percent of GDP reduction of the structural fiscal deficit each year for the next four years.
  - An adjustment of some ¾ percent of GDP is necessary to bring debt down to under 80 percent of GDP by 2020.
- Nature of past consolidation:
  - Consolidation to date has largely relied on one-off measures and horizontal, across-the-board cuts (e.g., freezes on pension and wage indexation and hiring freezes).
  - These measures have limited further scope and face political pressure to be reversed.
- Rationale for a structured spending review:
  - Expenditure levels have increased by over 5 percent of GDP since 2008.
  - A focused spending review is underway, targeting large-ticket areas: Health, Education, and Social Welfare (pensions).
  - Health is subject to a stand-alone spending review with World Health Organization support; Education and Social Welfare have new working groups (terms of reference need formal agreement).
- Sectoral diagnostics (high-level):
  - Education: Slovenia’s education spending is the fourth highest share of GDP in the EU; inefficiencies identified mainly in primary and to a degree secondary levels; rigidities in funding that do not adjust to changing demographics; policy options include consolidation of schools with very low numbers of children and setting a floor on student/teacher ratios.
  - Health: Produces good health outcomes but inefficiencies exist—continued reliance on costly secondary and specialist care and an overly generous benefit package; a separate review is reporting by July.
  - Social protection / pensions: High and growing social benefits are the biggest fiscal challenge, driven by a rapidly ageing population and generous schemes; recent reforms only temporarily constrained pressures; further measures needed (examples for review include benefit indexation, tax treatment of pensions, and restrictions on early retirement).
- Process and timing:
  - Working groups for Education and Social spending must identify saving measures and propose them to policy makers; the working groups are not decision-making bodies.
  - A political decision-making process is required (one option: a sub-committee of cabinet) to agree and implement measures.
  - To impact the 2016 budget, the process needs to be largely completed and agreed by end-July 2015 — necessitating a narrow focus, clear review criteria, and consistent methodologies to produce a menu of medium-term savings proposals.
  - Given the tight timeframe, additional measures may need to be identified for subsequent budget years.
- Institutional recommendations (high-level):
  - Explicitly identify and quantify spending pressures (parameter and policy pressures) within the review.
  - Embed the spending review process formally, preferably as an additional provision in the Public Finance Law (which is under review), to make it an ongoing fiscal management procedure.
  - Improve the quality of program performance information to focus on outcomes and better inform future reviews.
- Quantitative tasking:
  - The overall savings task of €200m a year is considered likely to be a conservative estimate given building spending pressures.
  - Review teams should start by identifying medium-term spending pressures to be offset, including demographic and price (“parameter”) pressures and political reversal risks (“policy” pressures).

### Introduction — purpose and scope of the report
- Objective: advise on establishing and operationalizing a spending review process focused on large spending areas (Social Benefits, Education, Health) to identify efficiencies, reallocate resources to higher priorities, and improve value for money.
- Report structure:
  - Section II: rationale for spending review and sectoral findings.
  - Section III: how to establish the process, drawing on international experiences.
  - Section IV: expected outcomes and next steps for Slovenia.

### Rationale for the Spending Review — objectives and methodology
- Threefold objectives of spending reviews:
  - Assist medium-term fiscal consolidation by identifying a menu of high-quality potential savings measures.
  - Improve allocative efficiency by shifting expenditure from lower to higher priority areas.
  - Improve value for money by identifying inefficient spending where similar outcomes can be achieved with reduced inputs.
- Core evaluation criteria to identify savings options:
  - Alignment of program objectives with government policy priorities.
  - Available evidence on program performance, including cost-effectiveness.
  - Scope to improve efficiency through program design, service delivery, or administrative simplification.
  - Scope to better target programs to meet policy objectives.
  - Scope to consolidate lower priority programs and remove duplication.

*Source: _cr15265 - Preface (IMF technical assistance mission to Slovenia, April 30–May 12, 2015).*

### 12.       Drawing on the findings of the program evaluations, the spending review

### _cr15265 - 12.       Drawing on the findings of the program evaluations, the spending review

### Spending review objectives and outputs
- The spending review should identify a range of savings options to feed into a ministerial decision making process.
- Key output: savings options that include medium-term financial implications, policy rationales, identification of affected groups and distributional impacts (see Appendix IV in source for an example).
- The review may also identify high priority spending areas and develop offsetting policy measures where some portion of the savings can be redirected to high needs groups.
- Given a two-month time horizon, reviews may need to focus on the largest programs or those identified as most promising ex ante (e.g., 69 types of social benefit payments within the welfare portfolio).

### International benchmarking and limitations
- Benchmarking compares Slovenia’s expenditure patterns to CESEE comparators and the broader EU using Eurostat Government Statistics; bank recapitalization effects removed to focus on underlying trends.
- Benchmarking identifies:
  - Spending areas where Slovenia is a relative outlier and candidates for savings or efficiency gains.
  - Areas of recent and future spending pressures, particularly pensions and health care.
  - Spending efficiency by comparing spending on outcomes.
- Caveats: benchmarking is not a substitute for deeper policy analysis due to potential country-specific needs, comparability issues (government boundaries, SOEs, public vs private responsibility), and intra-country heterogeneity hidden by country averages.

### Overall government spending
- Slovenia’s total public spending is high relative to comparators and has increased by around 5 percentage points of GDP since 2008.
- Increase driven by current spending as a share of GDP, not investment expenditure; bulk due to rising social benefit and wage expenditure.
- Much of expenditure increase followed an extremely large drop in output (some 8 percent) since 2008 that was not fully reflected in similar falls in expenditure.
- Table 1 highlights changes (percent of GDP) 2008–2013 (difference 2013–2008 shown as ppts of GDP and share of total increase):
  - Total expenditure: 44.1 (2008) → 49.1 (2013); difference 5.0 (percent of GDP)
  - Current spending: 38.2 → 44.9; difference 6.7
  - Compensation of employees: 11.0 → 12.3; difference 1.3
  - Goods and services: 6.0 → 6.7; difference 0.7
  - Interest payments: 1.1 → 2.3; difference 1.2
  - Social benefits: 16.6 → 19.9; difference 3.3
  - Capital spending: 5.5 → 4.2; difference -1.3
  - Functional highlights (2013–2008 differences, percent of GDP): General public services +1.7; Health +0.7; Education +0.4; Social protection +2.8
- Wage bill:
  - High relative to comparators; among upper quartile in EU.
  - Average wage of government employees ≈ 1.6 times GDP per capita versus EU average 0.9.
  - Compositional factors: public administration employees with tertiary qualifications 56.7 percent in 2011 versus EU-28 average 37.5 percent.
  - In education and health, relatively large wage bill driven by comparatively high employment levels.
- Government employment:
  - Lower than EU average but on an upward trend since 2004 in contrast to declines elsewhere.
  - Employment increases driven by education and health; partly offset by decline in public administration.

### Education: findings and potential savings
- Slovenia’s education spending is the fourth highest in the EU and the highest among CESEE comparators (2012).
- High spending concentrated in primary and secondary education; pre-primary and tertiary broadly in line with EU averages.
- Drivers: relatively high wage bills and goods and services; capital spending broadly in line with EU averages.
- Employment and enrolment trends (2000–12):
  - Teaching staff increased by 27 percent while enrolled people fell by 5 percent.
  - Tertiary: students +7 percent; teaching staff +103 percent.
  - Basic education: enrolled pupils -11 percent; teachers +14 percent.
  - Freeze on aggregate teaching levels since 2012 coincided with fall in student population.
- Indicators suggest potential room to reduce staff without harming outcomes:
  - Among lowest student-teacher ratios in OECD in pre-primary and lower secondary.
  - Public sector school class sizes in primary and secondary below EU and OECD averages.
  - Large variation in class sizes: range 4.5 to 24.2 pupils; around 40 percent of schools have class sizes <15; legal limit is 28.
  - 50 percent of primary schools have less than 200 pupils, leading to high numbers of support staff.
  - Net primary education teaching time is low: current teaching contact hours at OECD low of 22 hours.
- Education outcomes:
  - PISA scores around OECD average while spending is around 1 percent of GDP higher than countries with similar outcomes.
  - Secondary school enrollment rates relatively high relative to spending per student but not excessive.
- Tertiary sector inefficiencies and reform levers:
  - Eligibility criteria for student benefits could be tightened; universities’ use of resources better monitored.
  - Reforms to reduce “fake students” contributed to a 7 percent annual reduction in tertiary enrollment since 2011.
  - Potential savings from limiting financial support to those who complete within normal duration and by setting tighter family income criteria (evidence suggests less than 10 percent of state support goes to the bottom quintile).
  - Link state financing to specific outputs rather than lump-sum; change legal framework if needed.
- Potential areas for savings reform:
  - Raising pupil-teacher ratios, particularly in pre-primary and lower secondary education.
  - Optimizing the school network, addressing overcapacity in non-geographically isolated schools.
  - Increasing teacher contact hours from current OECD low of 22 hours.
  - Further tightening of financial support for tertiary students.

### Health: findings and potential reforms
- Health spending relatively high for Slovenia’s income level and projected to increase: projected increase from 6.3 to 8.2 percent of GDP by 2060.
- High level driven by wage bill and goods and services; recent reforms reduced pharmaceutical prices and tightened hospital budgets.
- Health outcomes:
  - Health adjusted life expectancy is 71 in Slovenia, highest among CESEE comparators.
  - Some granular outcomes (infant mortality, deaths from heart disease) are favorable.
  - Spending in health is around 30 percent higher than countries with similar life expectancies; using healthy life years, Slovenia’s outcomes fall significantly to amongst the lowest in Europe.
- Identified inefficiencies include:
  - Continued reliance on costly inpatient and specialist care.
  - Insufficient partnership with private sector in ambulatory settings.
  - Historically generous primary health care benefit package.
  - Variable quality of care not consistently targeted to reward high performance.
  - Insufficient focus on treatment of proven clinical and cost effectiveness.
- Potential reform focus areas:
  - Strengthen primary health care by expanding practices providing broader integrated services including chronic conditions and early detection of non-communicable diseases.
  - Develop efficient provider payment systems for hospitals.
  - Use appropriate co-payments combined with a cost-effective basket of services.

### Pensions and social benefits: findings and reform options
- Social protection spending relatively high and growing: social benefits increased by more than 3 percentage points of GDP during 2007–13 to more than 18 percent of GDP.
- Pension spending accounts for about two-thirds of social protection spending and was responsible for the majority of the increase.
- Poverty among the elderly is relatively high despite large pension spending, linked to high early retirement rates and fewer contributory years leading to relatively low pension incomes.
- Projections and demographics:
  - Pension spending projected to increase by 6 percent of GDP by 2050 due to demographic factors and pension design.
  - Old age dependency ratio projected to double by 2050, one of the largest increases in Europe.
  - System dependency ratio (pensioners to contributors) anticipated to increase from 67 percent now to 145 percent.
- 2012 pension reforms (main measures):
  - Gradual increase in statutory retirement age to 65 for both men and women.
  - Tightening early retirement conditions: increase in earliest permissible retirement age by 1 year on average; revised eligible occupations list.
  - Introduction of early retirement penalties.
  - Increasing averaging period for pensionable earnings from 19 to 24 years.
  - Indexing benefits to composite of wages and prices (60:40), with indexation frozen during 2012–15.
  - Fiscal impacts: freeze in indexation contributed around 0.3 percent of GDP over its two year period; other reforms anticipated to have modest long-term impact—in the range of 2 percent of GDP by 2050.
- Features not fully addressed in reform and options for working groups:
  - Benefit indexation remains generous by international standards; many countries link benefits more to inflation than wages.
  - Pension bonus remains a residue from previous regulations, representing 0.35 percent of GDP.
  - Generous tax treatment of pensions with exemptions: only pensions exceeding 1095 per month (110 percent of the average wage) are subject to taxation, leaving 95 percent of pensioners not paying any tax.
  - Further tightening incentives for early retirement could include increasing early retirement deduction, limiting early retirement to no more than two years prior to statutory age of 65, and reducing non-contributory time recognition.

*Source: IMF staff chapter content as provided in the supplied PDF excerpt.*

### 37.      These and other potential reforms to the pension system could yield savings of

### _cr15265 - 37.      These and other potential reforms to the pension system could yield savings of

### Pension and Social Assistance Findings
- These and other potential reforms to the pension system could yield savings of 0.6 percent of GDP in the near term, and 2.6 percent of GDP by 2050.  
- Options and costings are laid out in greater detail in 2015 Selected Issues Paper Social Spending Reforms and Fiscal Savings in Slovenia.
- Social assistance spending appears to be more tightly targeted than pensions, resulting in relatively low poverty rates amongst under 65 population (Figure 16).
- By European standards, Slovenia has a relatively high proportion of means tested benefits (Figure 17), though some means testing still appears relatively loose and should be explored by the reviews.

### Recommendation Summary (Chapter II, Recommendations)
- Recommendation 2.1:
  - Establish, staff and task working groups in education and social welfare, in addition to the existing health working group, to undertake program evaluations, identify a menu of savings options and high priority spending alternatives within their portfolios.
- Recommendation 2.2 (initial savings identification focus):
  - For Education:
    - Raising student-teacher ratios and class sizes, particularly in schools where they are currently exceptionally low; and optimizing the school network with an eye to areas of overcapacity.
  - For Health:
    - Strengthening primary health care, and developing an efficient provider payment system for hospitals.
  - For Social Welfare:
    - Further reforms in the pension system related to benefit indexation, tax treatment of pensions and incentives for early retirement, and further strengthening means testing in other social assistance areas.

### Lessons from Successful Spending Reviews (Section III.A)
- More successful spending review processes have these features:
  - The objectives of the review were established at the outset;
  - Clear saving targets were provided to review teams;
  - A medium-term perspective has been adopted;
  - A decision making committee has been put in place to arbitrate disputes;
  - The review has been integrated into the annual budget processes;
  - Sufficient time has been left to implement the reforms.
- Examples of targets adopted elsewhere:
  - Canada: each agency reviewed to present saving options of at least 5 percent by year three from their lowest-priority, lowest-performing program spending.
  - France: RGPP during 2010–11 set a target for a 10 percent reduction in non-salary administration costs by year three.
  - Netherlands: 2010 Comprehensive Spending Review required each review team to develop saving options capable of delivering at least a 20 percent reduction, over four years.
- Cautionary evidence:
  - In Greece, around half of the options identified by reviews were either not adopted or were rejected by the constitutional court.
  - The 2014 IMF Article IV report indicated that the authorities only implemented about a fifth of the original measures envisaged to support their fiscal consolidation effort and subsequently had to rely on one-off measures including large decreases in public investment spending.

### Spending Review Design Pitfalls to Avoid (Box 2 highlights)
- Do not omit specific ministry spending ceilings and savings targets at the start.
- Prevent line ministry officials from re-opening their ministry’s targets within Working Group discussions.
- Rigorously challenge ministries’ quantification of baselines, spending pressures and measures; ensure:
  - realistic assumptions that are clearly specified;
  - any negative impact on tax revenues from cuts be subtracted from gross yield;
  - assessment of implementation risks with historic examples where possible.
- Avoid designing policies solely on past domestic experience; use international benchmarking.
- Over-estimating savings across loosely accountable entities (schools, universities, independent agencies, SOEs) must be avoided; quantify conservatively and integrate savings into individual budget ceilings.
- Limit reliance on administrative measures; quantify conservatively and expect most savings to be spread over the medium-term. Administrative savings would be expected to account for no more than 5 percent of the structural fiscal consolidation package for the next year unless greater short-term savings can be clearly demonstrated.

### Establishing Objectives and Targets (Section III.B)
- Ministers must determine whether the review’s primary focus is overall expenditure reduction or expenditure reprioritization.
- Allocating a specific savings target to each spending area ensures the review is calibrated to fiscal consolidation objectives.
- A common approach: set the target as a certain percentage reduction in the overall budget allocation to be achieved over a medium-term period.
- Incentive mechanism: allow spending ministries to retain part of the value of any expenditure cuts for other priorities within their sector.
- Targets should recognize numerous options will not go ahead; the menu of options should be considerably larger than the end savings target required. Example: in Greece about half of options were not adopted or rejected.

### Structure for Successful Design, Review, and Implementation (Section III.C)
- The spending review in Slovenia should operate on two levels:
  - Technocratic level: working groups to examine education and social benefit programs and identify saving proposals.
  - Policy making level: ensure political buy-in; Working Groups are not decision making bodies—final proposals presented to Ministers.
- Consider establishing an Expenditure Review Committee (a sub-set of Cabinet members) to review, assess and agree measures against the fiscal consolidation objective.
- Working groups composition and roles:
  - Broad representation: MoF, line ministries, external experts (including IMAD), possible representatives from the office of the Prime Minister.
  - Chaired by a senior official from the MoF (the Budget Director and her deputy).
  - Terms of reference to be agreed between the Minister of Finance, Minister for Education, Science and Sport, and Minister for Labor, Families, Social Welfare, and Equal Opportunity.
- MoF central role:
  - Provide guidance on timetable, outputs, review criteria, templates for policy submissions.
  - Challenge line ministries, ensure technical consistency in costings, test credibility of saving options, and pull proposals and pressures together for ministers.

### Process, Timetable, and Phasing (Sections III.C–III.D)
- Integration with the budget process imposes tight timeframes:
  - To feed into the 2016 budget, saving options would need to be finalized by around mid-July 2015 to allow development and inclusion in multi-year budget allocations.
  - This timeframe is likely ambitious; working groups will need further analysis to identify structural measures for inclusion in the 2016 EU stability program and the 2017 medium-term budget process.
- Given tight timeframes, working groups should:
  - First agree areas of policy to focus on—prioritize largest or fastest growing programs or areas flagged by international expenditure benchmarking.
  - Develop an explicit set of review criteria focusing on:
    - Alignment of program goals with government policy objectives;
    - Effectiveness—whether the program is meeting its objectives;
    - Efficiency—whether there is scope to deliver at a lower cost.
  - Present a menu of saving options considerably larger than the end saving target, with conservative quantification and assessment of implementation risks.

*Source: IMF staff report content as provided in the supplied excerpt.*

### 52.      Working groups should develop a menu of saving options to be considered by

### _cr15265 - 52.      Working groups should develop a menu of saving options to be considered by

### Policy proposal requirements (from paragraph 52)
- Each policy proposal submitted to ministers should include:
  - The fiscal impact for the Budget and three forward years, with costings to be made using consistent methodologies and assumptions across programs;
  - The public policy rationale for the proposal;
  - The impact of the policy proposal on affected groups and any social, regional or economic consequences;
  - The legislative requirements, implementation arrangements (including whether the measure could be implemented as part of the 2016 Budget or requires further development), and the process for consultation if required.
- The mission provided an example template for policy proposals and an example template for decision making submissions with a hypothetical policy proposal (see Appendices III and IV).

### Identifying and quantifying spending pressures (paragraph 53)
- A consolidated list of spending pressures should be presented to ministers alongside saving options.
- The list should detail the fiscal impact over the budget and three forward years.
- Significant cost pressures beyond the near-term horizon should be made clear and quantified where possible.

### Legislative underpinning to embed the spending review process (paragraphs 54–55)
- Existing Public Finance Law (PFL) of 1999 (as amended) is the main legislative instrument governing public finances in Slovenia.
- The PFL is under review; amendments were intended for presentation to parliament in 2015 to complement a new Fiscal Rules Act supporting the constitutional fiscal rule voted into the constitution in 2013 and coming into effect in 2015.
- The Fiscal Rules law will transpose EU fiscal compact requirements into national legislation.
- The amendments primarily relate to: establishment of a fiscal council, defining automatic correction mechanisms in the event of fiscal slippage, and introduction of the principle of balanced structural budgets over the medium term.
- Recommendation: Consider including provisions in the planned 2015 PFL amendments to require periodic spending reviews and upgraded performance indicators to feed into the process.

### Improving the quality of program performance information (paragraphs 56–60)
- Current performance information is published with the budget but is not likely to meaningfully inform the spending review process.
- Budget decision making remains primarily focused on line item inputs rather than performance; line ministries largely prepare program objectives and indicator targets with limited MoF input.
- Table 2 (Program Objectives and Indicators – 2015 Budget) shows a high number of objectives and indicators across policy areas, suggesting a less than strategic approach.
- Indicator typology and counts (sample from text):
  - Health policy area: 82 indicators total — 34 input, 35 output, 13 outcome indicators.
- Analysis of indicator targets over the last 5 years shows:
  - In many cases the target was already achieved at the outset;
  - In some cases targets were maintained despite cuts; in others targets were reduced when funding was reduced;
  - In a few cases targets increased despite funding cuts;
  - Baseline, target, and actual performance data is often incomplete.
- Conclusion: Existing performance information is insufficiently systematic to support robust spending review conclusions.

### Recommendations (Section G) — Immediate (1-3 months)
- Recommendation 3.1 - The working groups for education and social benefits should be formalized as a priority, with representatives from MoF, the relevant agency responsible for programs under review, a representative from the Prime Minister’s Office and external experts;
- Recommendation 3.2 - A terms of reference for the Working Groups should be agreed and communicated outlining the objectives, responsibilities, review criteria, outputs and timetable for the review;
- Recommendation 3.3 - The MoF should develop a template submission for spending review proposals (Appendices II and III can be used as a reference);
- Recommendation 3.4 - Working groups should be provided with the minimum quantum of saving options to be identified, as soon as is practicable;
- Recommendation 3.5 - Formalize the decision making arrangements for the review and consider establishing an Expenditure Review Committee as part of this process, comprising key members of Cabinet, to consider the proposals developed by the working groups.

Short-term (3 months to 1 year)
- Recommendation 3.6 – The working groups should continue to identify structural savings measures for inclusion in the 2016 EU stability program to ensure that the medium-term fiscal objective is met;
- Recommendation 3.7 – Consider including a provision in the Public Finance Act establishing a regular spending review process as part of the medium-term budget framework preparation process.

Medium-term (1-2 years)
- Recommendation 3.8 – Rationalize the number of performance objectives and indicators and align them with the new objectives and measures established through the spending reviews.
- Recommendation 3.9 – Review the format and contents of performance annexes submitted along with the budget to make them more informative and accessible to the public, and strengthen the ongoing monitoring of this data as an input into the budget.

### Next steps and indicative action plan (Section IV, Table 3 — selected tasks and deadlines)
- Design Phase
  - Formally appoint members of the working groups (Education and Social Benefits): Ministers of Finance, Education & Sport, and Labor, Family, Social Affairs & Equal Opportunities, PM’s Office — Mid-May 2015
  - Agree and issue the terms of reference for the working groups: Ministers of Finance, Education & Sport, and Labor, Family, Social Affairs & Equal Opportunities, PM’s Office — Mid-May 2015
  - Establish high-level Expenditure Review Committee of the Cabinet: Minister of Finance, PM’s Office, Cabinet — Mid-May 2015
- Analysis and Decision Phase
  - Commence meetings of the working Groups: Working groups — Mid-May–Mid-July 2015
  - Finalize initial program evaluations: Working groups — Mid June 2015
  - Finalize policy recommendations for 2016 budget: Working groups — Early July 2015
  - Submit consolidated proposals for decision: Working groups, Budget Department — Mid-July 2015
  - Decision on measures to adopt for 2016 medium-term budget framework: Expenditure Review Committee of the Cabinet — End-July 2015
- Implementation Phase
  - Prepare budget submissions based on measures adopted by Expenditure Review Committee: Ministries of Health, Education & Sport, and Labor, Family, Social Affairs & Equal Opportunities — Aug-Sept 2015
  - Develop and implement communication strategy detailing rationale behind chosen spending measures for 2016 budget: Ministries of Finance, Health, Education & Sport, and Labor, Family, Social Affairs & Equal Opportunities, Government Communications Unit — Aug-Sept 2015
  - Prepare changes to the presentation of performance information in the 2016 budget documentation: Budget Directorate — August-Sept 2015
  - Include measures in 2016 Budget proposals: Budget Directorate — Sept-Oct 2015
  - Ensure 2016 spending measures are fully reflected in 3 sectors’ performance annexes: Budget Directorate and Line Ministries — Oct 2015
- Second Design/Analysis/Implementation Phases and embedding measures include a sequence of tasks with deadlines spanning Nov 2015 through Oct 2016, and a medium-term measure to amend provisions of the PFL law to embed periodic spending reviews (Ministry of Finance and PM’s Office — Oct 2015?).

### Detailed Working Group timetable (Table 4 — selected timeline entries)
- Formal establishment of WGs, ideally with indicative aggregate spending ceilings per Ministry in line with Stability Programme target scenario: May 15, 2015
- WGs to discuss details on programs, funding and spending trends for period 2016-2019 and identify programs to evaluate: May 22, 2015
- WGs to finalize quantification of spending pressures and the savings target; discuss initial findings and canvas policy and saving options: May 29, 2015
- WGs finalize program performance evaluations: June 5, 2015
- WGs discuss savings policy proposals including quantification assumptions: June 19, 2015
- WGs discuss feedback from MoF, Experts and IMF (if requested) on line ministry savings proposals: June 26, 2015
- WGs finalize savings proposals and identify those implementable for 2016 Budget vs. those requiring more time: July 3, 2015
- WGs finalize documents summarizing savings proposals and send to Expenditure Review Committee: July 10, 2015
- Decision on measures proposals by Expenditure Review Committee: July 24, 2015
- MoF sends binding spending ceilings to line Ministries for preparation of 2016 Budget: July 31, 2015

*Source: _cr15265*

### Appendix II. Example Program Submission Template

### Appendix II. Example Program Submission Template

### Program template and resourcing table
- Programme name: PROGRAM NAME
- Sub-program name: Sub-program name
- Agency: < >
- Resourcing ( (€ ‘000) ):
  - 2015 Baseline: Programme expenditure: 0.0; Administrative expenditure: 0.0; Payroll expenditure: 0.0; Total resourcing: 0.0
  - 2016 Budget: Programme expenditure: 0.0; Administrative expenditure: 0.0; Payroll expenditure: 0.0; Total resourcing: 0.0
  - 2017 FY1: Programme expenditure: 0.0; Administrative expenditure: 0.0; Payroll expenditure: 0.0; Total resourcing: 0.0
  - 2018 FY2: Programme expenditure: 0.0; Administrative expenditure: 0.0; Payroll expenditure: 0.0; Total resourcing: 0.0
  - 2019 FY3: Programme expenditure: 0.0; Administrative expenditure: 0.0; Payroll expenditure: 0.0; Total resourcing: 0.0
- Staffing level (‘000): (blank in template)

### I. Background and assessment — guidance prompts
- Programme description and rationale:
  - Provide a description of the existing program (include details of when it was introduced and recent amendments if applicable).
  - What is the public policy rationale?
  - What are the program objectives and outputs?
- Background (if required):
  - Have there been any previous program evaluations undertaken? If so, what where the recommendations and were they implemented.
- Benchmarking, trends, and pressures:
  - Outline recent trends in program expenditure and drivers;
  - Provide details of short and medium-term cost pressures;
  - Summarize relevant benchmarking of program parameters and outcomes.
- Programme evaluation — suggested assessment dimensions:
  - a. Alignment:
    - Is the program aligned with the Government’s policy priorities?
  - b. Effectiveness:
    - How well does the program meet the policy objectives?
    - Are there other means to achieving these objectives?
  - c. Efficiency:
    - Can specific steps be taken to improve cost effectiveness?
    - Is there scope to improve service delivery or simplify administrative arrangements?
    - Can the program be better targeted?
    - Is there scope for outsourcing or engaging a non-state provider at lower cost?
    - Is there overlap or duplication with other government programs? Is there scope for rationalization?
    - Is there scope to introduce (or increase) user-charges or co-contributions?

### II. Policy proposal(s) template
- Programme name: PROGRAM NAME
- Sub-program name: Sub-program name
- Agency: < >
- Option 1: [Title] — <Describe proposed reform>
- Financial implications ( (€ ‘000) ):
  - 2016: Change in programme expenditure: 0.0; Change in administrative expenditure: 0.0; Change in payroll expenditure: 0.0; Total change in resourcing: 0.0
  - 2017: Change in programme expenditure: 0.0; Change in administrative expenditure: 0.0; Change in payroll expenditure: 0.0; Total change in resourcing: 0.0
  - 2018: Change in programme expenditure: 0.0; Change in administrative expenditure: 0.0; Change in payroll expenditure: 0.0; Total change in resourcing: 0.0
  - 2019: Change in programme expenditure: 0.0; Change in administrative expenditure: 0.0; Change in payroll expenditure: 0.0; Total change in resourcing: 0.0
- Change in staffing levels (‘000): (blank in template)
- Policy rationale: <Summarise policy case for the reform>
- Impact — prompts:
  - Who will be affected by the policy change? How many will be impacted?
  - What is the financial impact/cost to those affected?
  - What are the social/economic consequences?
  - Are there any spillovers to other programs?
- Implementation arrangements — prompts:
  - How much time is required for implementation?
  - Is legislative change required?
  - Is negotiation with third parties required?
  - Are there impacts on departmental resourcing?
- Consultation — prompts:
  - Is further consultation required within government or with third parties? If so detail the recommended process.

### Appendix III: Example decision making template (structure)
- PROGRAM — Budget Impact ($m) cost (-) / saving (+):
  - 2015 Baseline, 2016 Budget, 2017 FY1, 2018 FY2, 2019 FY3, Total (columns provided; values to be filled)
- Recommendation: Option A – Summary of policy change; Option B – Summary of policy change; Option C – Summary of policy change
- Memo: Total resourcing
- Policy description: [Describe policy proposal]
- Public rationale: [Provide public policy rationale for policy proposal]
- Who will be affected: [Detail impact of policy change: who will be impacted; the number impacted; the financial impact on those affected; any regional or sectoral impacts.]
- Other sensitivities: [Identify other sensitivities e.g. Are there any adverse social / economic consequences of the change? Is the policy change inconsistent with previous government policy commitments? Are there consequences for other programs?]
- Implementation: [Legislative change will / will not be required. When will legislation need to be implemented by? Does the policy change require consultation with third parties prior to implementation?]
- Likely third party reaction: [Detail stakeholder reaction: are there any lobby groups/think tanks/institutions who will advocate for/strongly oppose the change]

### Appendix IV: Example of a policy proposal decision making submission — Social benefits: Child Allowance
- Policy area: SOCIAL BENEFITS – FAMILIES – CHILD ALLOWANCE
- Budget impact (€ millions) cost (-) / saving (+):
  - 2015 Current
  - 2016 Budget
  - 2017 FY1
  - 2018 FY2
  - 2019 FY3
  - Total (columns provided; example option values below)
- Recommendation — example option totals:
  - Option A – Change the income taper rate: 2016: 6.5; 2017: 6.6; 2018: 6.7; 2019: 6.8; Total: 26.5
  - Option B – Tighten the means test: 2016: 13.7; 2017: 14.0; 2018: 14.2; 2019: 14.4; Total: 56.3
  - Option C – Pause indexation for four years: 2016: 0.5; 2017: 1.5; 2018: 2.5; 2019: 3.6; Total: 8.0
- Memo: Total current resourcing: 65.9
  - 2016: 66.4
  - 2017: 67.5
  - 2018: 68.6
  - 2019: 69.7
- Policy description (summary of options):
  - Option A reduces the benefit to those with income per family member above 35 percent of the average wage.
  - Option B restricts the benefit to those with income per family member of less than 55 percent of the average wage (€545 p/m). The means test currently is set at the average wage (€990 p/m).
  - Option C continues the pause on indexation for four more years from 2016.
- Rationale:
  - Option A and B ensures that the child benefit allowance is targeted to those who need it most.
- Who will be affected:
  - Currently around 200,000 families benefit from the Child Allowance.
  - Option A reduces the benefit for the 64,500 families with income above 35 percent of the average wage by between €5 to €14 euros per month.
  - Option B eliminates the benefit entirely for families with average income above 55 percent of the average wage (around 44,650 families). The impact ranges from a loss of around €23 to €35 in benefits per month.
  - Under Option C the average family would forego around €4 a month after four years.
- Other sensitivities:
  - Reducing the child allowance may be perceived as discouraging households from having children and being counter to the government’s policy objectives.
- Legislative requirements:
  - Legislative change will be required.
- Implementation:
  - Legislation will need to be passed by November 2015 to allow payment schedules to be adjusted for the 2016 calendar year.
- Third party reaction:
  - The amendment will be strongly opposed by Social Welfare groups.

### Option detail matrices (child allowance amounts and changes)
- OPTION 1: Change in income taper rate — Amount of child allowance for each child (€per month); Income per family member as a percent of average wage:
  - Current Schedule / Revised Schedule / Change in benefit columns with values:
    - up to 15%: 1st child 114.85, 2nd child 126.33, 3 or more 137.83 | Revised: 114.85, 126.33, 137.83 | Change: 0.00, 0.00, 0.00
    - 15% to 25%: 1st child 98.19, 2nd child 108.55, 3 or more 118.84 | Revised: 98.19, 108.55, 118.84 | Change: 0.00, 0.00, 0.00
    - 25% to 30%: 1st child 74.83, 2nd child 83.65, 3 or more 92.42 | Revised: 74.83, 83.65, 92.42 | Change: 0.00, 0.00, 0.00
    - 30% to 35%: 1st child 59.03, 2nd child 67.35, 3 or more 75.83 | Revised: 59.03, 67.35, 75.83 | Change: 0.00, 0.00, 0.00
    - 35% to 45%: Current 48.27, 56.33, 64.33 | Revised 43.44, 50.70, 57.90 | Change -4.83, -5.63, -6.43
    - 45% to 55%: Current 30.58, 38.28, 45.93 | Revised 24.46, 30.62, 36.74 | Change -6.12, -7.66, -9.19
    - 55% to 75%: Current 22.94, 30.58, 38.28 | Revised 16.06, 21.41, 26.80 | Change -6.88, -9.17, -11.48
    - 75% to 99%: Current 19.97, 27.63, 35.28 | Revised 11.98, 16.58, 21.17 | Change -7.99, -11.05, -14.11
    - 100+: Current 0 0 0 | Revised 0.00 0.00 0.00 | Change 0.00 0.00 0.00
- OPTION 2: Change in the means test — Amount of child allowance for each child (€per month); Income per family member as a percent of average wage:
  - up to 15%: Current 114.85, 126.33, 137.83 | Revised 114.85, 126.33, 137.83 | Change 0.00, 0.00, 0.00
  - 15% to 25%: Current 98.19, 108.55, 118.84 | Revised 98.19, 108.55, 118.84 | Change 0.00, 0.00, 0.00
  - 25% to 30%: Current 74.83, 83.65, 92.42 | Revised 74.83, 83.65, 92.42 | Change 0.00, 0.00, 0.00
  - 30% to 35%: Current 59.03, 67.35, 75.83 | Revised 59.03, 67.35, 75.83 | Change 0.00, 0.00, 0.00
  - 35% to 45%: Current 48.27, 56.33, 64.33 | Revised 48.27, 56.33, 64.33 | Change 0.00, 0.00, 0.00
  - 45% to 55%: Current 30.58, 38.28, 45.93 | Revised 30.58, 38.28, 45.93 | Change 0.00, 0.00, 0.00
  - 55% to 75%: Current 22.94, 30.58, 38.28 | Revised 0.00, 0.00, 0.00 | Change -22.94, -30.58, -38.28
  - 75% to 99%: Current 19.97, 27.63, 35.28 | Revised 0.00, 0.00, 0.00 | Change -19.97, -27.63, -35.28
  - 100+: Current 0 0 0 | Revised 0.00 0.00 0.00 | Change 0.00 0.00 0.00

*Source: Appendix II–IV. Example templates and decision-making submission (from provided PDF content).*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2015/_cr15265.pdf_