Social expenditure comprises cash benefits, direct in-kind provision of goods and services, and tax breaks with social purposes. Benefits may be targeted at low-income households, the elderly, disabled, sick, unemployed, or young persons. To be considered "social", programmes have to involve either redistribution of resources across households or compulsory participation. Social benefits are classified as public when general government (that is central, state, and local governments, including social security funds) controls the relevant financial flows. All social benefits not provided by general government are considered private. Private transfers between households are not considered as "social" and not included here. Net total social expenditure includes both public and private expenditure. It also accounts for the effect of the tax system by direct and indirect taxation and by tax breaks for social purposes. This indicator is measured as a percentage of GDP or USD per capita.

Pension spending is defined as all cash expenditures (including lump-sum payments) on old-age and survivors pensions. Old-age cash benefits provide an income for persons retired from the labour market or guarantee incomes when a person has reached a 'standard' pensionable age or fulfilled the necessary contributory requirements. This category also includes early retirement pensions: pensions paid before the beneficiary has reached the 'standard' pensionable age relevant to the programme. It excludes programmes concerning early retirement for labour market reasons. Old-age pensions includes supplements for dependants paid to old-age pensioners with dependants under old-age cash benefits. Old age also includes social expenditure on services for the elderly people, services such as day care and rehabilitation services, home-help services and other benefits in kind. It also includes expenditure on the provision of residential care in an institution. This indicator is measured in percentage of GDP broken down by public and private sector. Private pension spending includes payments made to private pension plan members, or dependants after retirement and covers persons working in both the public and private sectors.

Public unemployment spending is defined as expenditure on cash benefits for people to compensate for unemployment. This includes redundancy payments from public funds, as well as the payment of pensions to beneficiaries before they reach the standard pensionable age, if these payments are made because the beneficiaries are out of work or for other labour market policy reasons. This indicator is measured in percentage of GDP.

Family benefits spending refer to public spending on family benefits, including financial support that is exclusively for families and children. Spending recorded in other social policy areas, such as health and housing, also assist families, but not exclusively, and it is not included in this indicator. Broadly speaking there are three types of public spending on family benefits: Child-related cash transfers (cash benefits) to families with children, including child allowances, with payment levels that in some countries vary with the age of the child, and sometimes are income-tested; public income support payments during periods of parental leave and income support for sole parents families. Public spending on services for families (benefits in kind) with children, including direct financing and subsidising of providers of childcare and early education facilities, public childcare support through earmarked payments to parents, public spending on assistance for young people and residential facilities, public spending on family services, including centre-based facilities and home help services for families in need. Financial support for families provided through the tax system, including tax exemptions (e.g. income from child benefits that is not included in the tax base); child tax allowances (amounts for children that are deducted from gross income and are not included in taxable income), and child tax credits, amounts that are deducted from the tax liability. This indicator is broken down by cash benefits and benefits in king and is measured in percentage of GDP.

In national accounts social benefits to households are broken down into two distinct categories: social benefits other than social transfers in kind; and social transfers in kind. The former transfers are typically in cash and so allow households to use the cash indistinguishably from other income, whereas transfers in kind are always related to the provision of certain goods or services (predominantly health care and education), and so households have no discretion over their use. Social benefits other than social transfers in kind may be further broken down into two key components: pensions benefits and non-pensions benefits. The latter consists of cash transfers made by government or by non-profit institutions serving households (NPISHs) to households to meet their financial needs in case of unexpected events, such as sickness, unemployment, housing, education or family circumstances. The relevant indicators (social benefits other than social transfers in kind, and social transfers in kind) are measured as a percentage of gross domestic product (GDP). All OECD countries compile their data according to the 2008 System of National Accounts (SNA).

Public spending on incapacity refers to spending due to sickness, disability and occupational injury. It includes disability cash benefits that are comprised of cash payments on account of complete or partial inability to participate gainfully in the labour market due to disability. The disability may be congenital, or the result of an accident or illness during the victim’s lifetime. It also includes spending on occupational injury and disease, which records all cash payments such as paid sick leave, special allowances and disability related payments such as pensions, if they are related to specific occupational injuries and diseases. Sickness cash benefits related to loss of earnings because of a temporary inability to work due to illness are also recorded. This indicator excludes paid leave related to sickness or injury of a dependent child which is recorded under family cash benefits. Social expenditure on services for the disabled people encompasses services such as day care and rehabilitation services, home-help services and other benefits in kind. This indicator is measured in percentage of GDP.

Public spending on labour market programmes includes public employment services (PES), training, hiring subsidies and direct job creations in the public sector, as well as unemployment benefits.PES includes placement and related services, benefit administration and other expenditure.Training includes institutional, workplace and alternate/integrated training, as well as special support for apprenticeship.Employment incentives includes recruitment incentives, employment maintenance incentives, and job rotation and job sharing.Out-of-work income maintenance and support includes full unemployment benefits, unemployment insurance, unemployment assistance, partial unemployment benefits, part-time unemployment benefits, redundancy and bankruptcy compensation.Data are based mainly on information about individual labour market programmes which appears in state budgets, and the accounts and annual reports of bodies which implement the programmes.This indicator is measured as a percentage of GDP.