site.btaTrade Union Proposes Measures to Boost Incomes and Make Social Assistance More Accessible

Belchin, Sofia Region, July 12 (BTA) - The Confederation of Independent Trade Unions in Bulgaria (CITUB) insists that the maximum monthly pension in the country should be increased to 1,000 leva in 2018 from the current 910 leva, CITUB Executive Secretary Assya Goneva told a seminar for journalists in Belchin on July 11. The proposed rise of the cap on pensions is estimated to cost between 42 million and 45 million leva annually. The current limit of 910 leva per month prevents 45,500 pensioners from receiving the income they have actually earned.

CONTRIBUTORY INCOME

The CITUB also proposed that the maximum monthly contributory income be increased to 3,000 leva in 2018 from the current 2,600 leva. This will bring between 76 million and 78 million leva in additional revenues into the public social insurance budget. Between 89,000 and 90,000 people in Bulgaria earn more than 2,600 leva per month, which is where the additional revenues can come from.

The trade union called for accelerated increase of work-contingent pensions. They said the weight of each year of contributory service should rise annually, with the relevant quotient gradually going up from 1.2 in 2018 to 1.5 in 2024.

The differentiation between various groups of self-insured persons should be abolished and a minimum contributory income of 600 leva per month should be established for all of them. For farmers and tobacco producers, the contributory income should be 330 leva, the union said.

Another CITUB idea is that the 1 per cent unemployment insurance contribution rate should be doubled. "No other country in the EU has such a low unemployment insurance contribution rate," Goneva argued. The measure is expected to generate 250 million leva in additional annual revenues to the public social insurance budget compared with 2017 (the estimate is based on the April 2017 level).

The minimum unemployment benefit should be between 14 and 15 leva per day, which means about 300 leva per month. The measure will cost 56 million leva annually, the trade union said.

With seasonal, temporary and fixed-term employment becoming ever more common, people must be given cumulative rights, according to the CITUB. The current rule is that entitlement to unemployment benefits requires payment of social insurance contributions for at least nine consecutive months in the last 12 months. The union proposes a new rule whereby an unemployment benefit applicant must prove 12 months of social security payments in the last 24 months - and these 12 months do not have to be consecutive, because seasonal workers are often employed for five or six months in the year.

All of the measures listed above will bring a total of 475 million leva into the public social insurance budget annually, but at the same time they will require 913 million leva in additional annual public expenses, including 800 million leva in pension-related expenses.

Furthermore, the CITUB insists that the minimum contributory incomes should be increased by the same percentage as the minimum wage, which means 80 million leva in additional income for the working people. Goneva noted that the minimum contributory incomes have proven to be an efficient instrument for combating the informal economy. She urged the ministers of labour and finance to take a clear stance as regards the legal implementation of the minimum contributory incomes and the responsibility of employer organizations. The CITUB will use all legal leverage to defend the minimum contributory incomes and ensure their increase, she said.

GUARANTEED MINIMUM INCOME

The CITUB further suggested that the guaranteed minimum income should no longer be the main benchmark for allowing access to social assistance. Instead of that, access to social assistance should depend on how an applicant's income relates to the poverty line, Goneva said. The guaranteed minimum income of 65 leva per month has stayed frozen since 2009. There are no rules for calculating its size; it is all up to the Finance Ministry's discretion, according to Goneva.

She said: "Social assistance in Bulgaria has a limited scope and the amounts of cash benefits are irrelevant, which is why they cannot perform their function of pulling people out of poverty." The CITUB wants the poverty line to be calculated using the EU-SILC instrument. It believes that social assistance should be made contingent on the individual needs of the beneficiaries.

The CITUB has designed a voucher system for social assistance. The idea is that beneficiaries can use subsidized vouchers to pay for at-home services at lower-than-market prices. These vouchers can be given to working people with young children, families with dependant members, and people who have permanent disabilities and live alone. The at-home services could include babysitting by the hour and care for persons with disabilities or lone elderly persons (also on an hourly basis), and should be exempt from tax. Beneficiaries will pay for the services using the above-mentioned kind of vouchers which will be subsidized by the government at a ratio of 2:1.

CHILD BENEFIT CONTROL

The CITUB called for enhanced control over the spending of welfare benefits for children. According to Goneva, it is unclear whether the one-off benefit for first-graders really produces the desired effect and whether the money actually goes towards learning aids and clothing for the students.

Teachers' Union leader Yanka Takeva noted that half a billion leva is allocated every year to finance Roma inclusion and all other measures for the Roma. The sum includes 229 million leva provided by the government and 212 million leva coming from NGOs which raise donations and have access to EU structural funds. Takeva said: "If social assistance was linked to responsible parenthood and if the money for the Roma was spent properly, the Roma would have been integrated by now." She said that each kindergarten and each school ought to employ a social worker to oversee the spending of Roma inclusion funding.