Slovenia’s social protection system is well developed and social spending has a large impact on redistribution of resources, reducing the risk of poverty by half. Overall spending on social policy amounts to about a quarter of GDP which is around the OECD average. With economic growth and favourable employment trends, the number of social assistance beneficiaries went down. Although recent reforms aimed at activating unemployed people were implemented, they did not fully succeed. The participation of social assistance recipients in active labour market programmes remained low, at least initially. Hence increasing the activation of welfare recipients remains a policy challenge, all the more in time of economic slowdown.

Family policy is well developed, and includes a wide array of child benefits, parental leave and maternity leave allowances, and financial support towards childcare and kindergartens. On the whole childcare provisions are comparable with the OECD average and in terms of work and family outcomes, Slovenia generally scores well in international comparison. However, fertility rates are currently well below the replacement level. The reasons behind this low fertility rate can be found in difficulties young people encounter in getting established in stable employment as well as in difficulties they face in moving out of the parental home because of housing costs.

Social transfers have relatively broad coverage in Slovenia and social spending appears to have a high effectiveness with regard to poverty and inequality reduction. Nevertheless, the tax burden on low-wage work is high in Slovenia compared with other OECD countries with well developed outof- work support systems.