Pilot project for the development of a common methodology on reference budgets in Europe : review of current state of play on reference budget practices at national, regional, and local level

This report is the first deliverable of a pilot project for the development of a common methodology on reference budgets in Europe. This project has two main objectives. The first is to establish a 'Reference Budgets Network' that consists of key EU experts and EU representative stakeholders, as well as 28 national networks of experts on reference budgets, and societal stakeholders. This network will bring together and internally disseminate to all its members the expertise on the development, the implementation, and use of reference budgets in social policy, social assistance, and debt counselling. The second goal of this project is to assess the possibilities for and actively strive towards building a consensus on one common theoretical framework and a common methodology that is able to support the development of cross-nationally comparable reference budgets in all EU Member States suitable for evaluating the adequacy of minimum income support and help designing efficient and adequate income support throughout Europe. In the literature, there is a remarkable absence of a general overview of the prevailing methods used to construct reference budgets in Europe. Such an overview would be most useful for identifying good and less satisfactory practices for constructing reference budgets in Europe. In order to fill this gap, this paper summarises the literature on reference budgets in Europe as well as the results of a survey on reference budgets among national experts in the 28 EU Member States. By doing so, the paper aims at identifying various practices for constructing reference budgets. In order to support the analysis, we propose a conceptual framework and a list of more precise criteria that will help to evaluate the quality of the methods used for constructing reference budgets. On the basis of this framework, we identify good and less satisfactory practices for constructing cross-country comparable reference budgets in Europe which we compare with the evaluations made by the national experts.