In most countries, the social security model is based on three levels of protection:
The basic, non-contributory or welfare level provides benefits to anyone who has never contributed to their social security system or, if they have done so, these contributions are insufficient to provide them with benefits at the contributory or occupational level. The aim is that in situations of need, everyone should have a certain standard of living that ensures, at least, their welfare.
Through the contributory level, the government guarantees a series of benefits, based on providing sufficient protection against certain situations, to workers and their dependents.
The main difference with respect to the previous level is that while the welfare level is financed by the state, the contributory level is financed mainly by contributions from the workers themselves.
The benefits vary greatly from country to country.
This is private cover, additional to that usually offered by state systems. It means that those people who are in a financial position to do so can guarantee themselves benefits close to or near the level of income they will cease to receive when, for example, they retire or in other foreseen situations, by taking out certain insurance or financial products created for this purpose, such as pension plans or life-savings insurance. Examples of this level are pension plans or life-savings insurance.
This third level makes up the supplementary welfare system. It refers not only to the supplementary provisions that each person can make individually, but also to corporate welfare, whereby the system is set up as part of the worker’s remuneration.