EXCLUSIVE: Romanian Govt To Reduce No Of Social Services, Beneficiaries

The Government argues the social assistance system has become "too costly" compared to expected results (e.g. high expenses on child-rearing benefits have not led to a rise in the birth rate), as spending on social services has increased from 1.4% of the GDP in 2005 to 2.86% in 2010, including social pensions and other benefits, without a significant improvement in the indicators measuring quality of life.

The plan is to reduce the number of social services and their value per person, merge the complementary family allowance, the single parent allowance, the minimum wage and the heating subsidy (all destined for families with low income) into a single program, called "minimum insertion income," by January 2013, and have the beneficiaries of this program bear part of the responsibility by requiring parents to be actively looking for jobs and children to have good school performance.

Services and benefits for people with disabilities will be merged into a single program, which will also include invalidity pensions. The amount received by a beneficiary will depend on their disability and specific needs. The Labor Ministry will take over the payment of benefits currently provided by various institutions, to reduce management costs.

The Government will see to it that the number of people able to work, from families receiving the minimum guaranteed wage, who take part in professional training courses will increase to 20% of the total by January 2012; it will tie the social services provided to people able to work to their participation in relevant "social activation" programs, until July 1, 2013; it will require beneficiaries to access the social services recommended by a social worker, until June 2012; it will introduce a single social aid application form, by June 2011; it will create efficient methods to check whether beneficiaries are still eligible for aid, by the end of March 2011.

The share of qualified social workers will grow to at least 50% in 2011, at least 75% in 2012 and 90% in 2013, while that of specialists attending training courses will increase to at least 20% in 2011, 40% in 2012 and 60% in 2013.

Other steps the Government plans to take are increasing the frequency of inspections, to combat fraud, improving the system of "notices" from the public (through toll-free phone numbers or the Internet), creating a system to penalize fraudulent requests for social assistance, using alternative payment methods (such as direct payments to a service provider, vouchers or social cards for vital goods), joining the databases on social insurance rights to other relevant data banks (those of the Pension House, Employment Agency, Civil Registry, revenue service).

Once this program is implemented, the share of social services in the GDP should drop from 1.77% to 1.41% in 2013, while that of social pensions and other benefits should drop from 1.08% to 0.67%.

Concurrently, child-rearing and protection benefits will be reduced from 3.42 million lei (EUR1=RON4.2509) in 2011, to RON2.98 million in 2012 and to RON2.56 million in 2013, while the average monthly number of beneficiaries will drop from 207,000 in 2011, to 166,000 in 2012 and to 129,000 in 2013.

The value of other child allowances provided by the Labor Ministry will drop from RON166 million in 2011, to RON132 million in 2012 and to RON110 million in 2013, while the average monthly number of beneficiaries will be reduced from 237,000 in 2011, to 189,000 in 2012 and to 155,000 in 2013.

Assistance for low-income households will be reduced from RON2.43 billion in 2011 to RON2.4 billion in 2012, while family support benefits will be reduced from RON468 million in 2011 to RON461 million in 2012. The number of families receiving this form of aid will drop from 684,000 in 2011 to 675,000 in 2012.

Budget expenses on minimum guaranteed income will be reduced from RON651 million in 2011 to RON632 million in 2012, while the number of beneficiaries will be diminished from a monthly average of 319,000 in 2011 to 310,000 in 2012.

The Government says these cuts are prompted by problems with the fair distribution and the value of assistance provided to low-income households, a rise in fraud and a high level of dependence on state benefits, reducing the aggregated labor supply. According to the document, of 11 million adults from families receiving social assistance, who are able to work, 2.2 million people do not work, nor are they undergoing professional training.

"In Romania, the social security system has a high coverage - more than 84% of citizens receive at least one form of financial benefit, directly or indirectly. (…) The global economic crisis requires financial resources to be directed mainly to the public investments sector, with a view towards economic recovery. Because of this, it is imperative we reform the social security system and support the most vulnerable categories," says the Government.

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