13. The output produced by those employed in managing these schemes is part of government output, valued at the cost of production. Consequently, no service charge is calculated for social security schemes of government.

Employers'contributions to social security schemes of government (D.121) are treated as part of compensation of employees, shown as payable by the employer's sector in the generation of income account and receivable by the household sector in the allocation of primary income account. Employers’ contributions reappear in the secondary distribution of income account as part of employers' actual social contributions (D.6111), payable by the household sector and receivable by government. Employees' contributions (D.6112) and contributions by self-employed and non-employed persons (D.6113) are also recorded in the secondary distribution of income account as payable by the household sector and receivable by government. Social security benefits in cash (D.621) are shown in the secondary distribution of income account as payable by government and receivable by households, while social security benefits in kind are shown as item D.6311 and D.6312, payable by government and receivable by households in the redistribution of income in kind account.

14. The units managing social security schemes of government are classified in sub-sector S.1314 ‘Social security funds'. The activity classification according to NACE rev. 1 is class 75.30 ‘Compulsory social security activities'.

When a resident works for a non-resident employer, the employer's contributions are shown as payable by the rest of the world in the external account of primary incomes and current transfers. If the employee also participates in a social security scheme run by a non-resident government, all receivables and payables normally concerning the government sector are receivable or payable by the rest of the world, recorded in the external account of primary incomes and current transfers. However, in the ESA social transfers in kind occur only between resident units. Any benefits from non-resident social security schemes to residents are therefore by definition social benefits other than social transfers in kind (D.62).

When a non-resident works for a resident employer, the employer's contributions are recorded as receivable by the rest of the world in the external account of primary incomes and current transfers. If the non-resident employee is covered by a resident social security scheme, the transactions between the employee and the government sector are recorded in the external account of primary incomes and current transfers. By definition, any benefits to non-resident employees are social benefits other than social transfers in kind (D.62).

An example of the flows recorded for social security schemes of government is shown in Table A.III.1.