Romania Slashes Child-Rearing Benefit From June 1 – PM Adviser

Romania’s Government will reduce child-rearing benefits starting June 1 and it will soon be decided whether the benefits will drop to a given percentage or a fixed sum, said Tuesday Andreea Paul-Vass, economic adviser to Prime Minister Emil Boc.

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Imaginea articolului Romania Slashes Child-Rearing Benefit From June 1 – PM Adviser

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Paul-Vass told MEDIAFAX Tuesday that the optimal method to cut down child-rearing benefits will be determined after an impact analysis. She added social aid benefits and heating subsidies will also be reduced, as part of the 15% expenditure cut plan for social benefits.

According to Paul-Vass, the minimum guaranteed income will be maintained at current levels.

Sources said that Romanian President Traian Basescu suggested during Monday talks with union federation leaders that the current calculation method might be discarded and the child-rearing benefit might be set at a fixed rate.

According to Law 257/2008, taxpayers who have worked for at least one year before childbirth are entitled to a monthly benefit of either RON600 or 85% of their average income for the previous year, provided this sum is lower than RON4,000.

March statistics published by the National Agency for Labor Conscription say there are 193,004 child-rearing indemnity beneficiaries in Romania, who require total funds of RON189,883,868.

Basescu said Sunday, after talks with union federation leaders, that social benefits for children and people with disabilities will not be reduced, adding all other subsidies are further poised to "analysis, reduction or elimination."

He added Monday that Romania's many subsidies and social benefits have rendered the country's budget into one of social aid.

According to the additional letter of intent for the EUR13 billion standby agreement with the International Monetary Fund, Romania's Government has pledged to reduce or to better allot single-parent family allowances and children's complementary allowances, as well as to apply a 15% tax to the minimum guaranteed income.

An agreement between the World Bank and the Government last week established that Romania must cut family allowances from RON470 to RON370 per person and dispense them in two tranches. The main goal of the amended draft law, drawn up by the Labor Ministry, will be to support the families with the lowest incomes and largest number of members.

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