site.btaOnly 1.2% of Population Receive Social Benefits, Analysis Shows

Social assistance for people with low income, or no income at all, has an extremely limited scope. Currently about 1.2 per cent of the population receive monthly benefits, while according to National Statistical Institute data, 23.8 percent of the country's population were below the poverty line in 2020. This is stated in an analysis by Lachezar Bogdanov, chief economist of the Institute of Market Economics (IME). The analysis was published on the IME website on Monday.

According to the IME, the proposals of the Ministry of Labour and Social Policy for changes in social assistance have long been needed.

The amendments envisage improving the exchange of data and registers, as well as easing some restrictive sanctions, reducing access to monthly benefits, as well as expanding the scope of support and increasing the amount of support, the analysis recalls.

Public resources aimed at supporting the lowest income households represent only 2 per cent of the total social assistance expenditure envisaged in the 2022 budget, at the expense of a number of other instruments for social transfers without an income test or with a very wide scope, according to the IME. The analysis points out that the overall architecture of the social security and social assistance system in Bulgaria does not guarantee targeted and adequate support, which logically leads to low efficiency of transfers to reduce poverty and inequality.

According to the IME, the basis of these problems is the linking of support with the so-called Guaranteed Minimum Income (GMI), a value the amount of which is determined and changed without any connection to objective criteria. For example, in the last more than 10 years the GMD has hardly changed. In contrast, the poverty line is determined every year, based on objective NSI data, according to the IME.

Lachezar Bogdanov explained that providing adequate social support to households in deep poverty is an important factor in the success of other long-term policies. For example, the inclusion and retention of children in school is a key tool for increasing opportunities for economic activity and permanently overcoming social exclusion in the future.