Assessing the Benefits Reform in Slovenia Using a Microsimulation ...

More documents

Recommendations

Info

for rent subsidies.A new Scholarship Act introducing a new means threshold for entitlement to state scholarships wasadopted in 2007. The Act for the first time independently governs the scholarship scheme which hasbeen regulated by the Employment and Insurance Against Unemployment Act prior to the change.With this new regulation, the responsibility for state scholarships was transferred from theEmployment Service of Slovenia to the centres for social work.Although the pension system contains various redistribution elements, some pensioners still receivevery low pensions due to their low incomes during their contribution period and/or an incompletecontribution period. Pensioners with low incomes and an incomplete contribution period can applyfor a pension income supplement provided they fulfil a set of conditions, such as: a) their pension isbelow a certain threshold; b) the family in which the pensioner lives does not have other incomesources which would allow a minimum standard of living; and c) the family has negligible property.The 1999 Pension and Disability Insurance Act (PDIA) introduced the state pension which is in facta form of a means-tested benefit. As a social assistance measure, it has no place in the pension anddisability insurance act; its inclusion was the result of considerable horse-trading among the politicalparties making up the ruling coalition. Unlike the pension income supplement, where one of the maincriteria is that a person is entitled to a pension, i.e. has accumulated a sufficient contributory period,the state pension can be granted to someone who is not receiving any pension. Both benefits aredisbursed by the Institute for Pension and Disability Insurance.Subsidies form an important part of the Slovenian system of social protection. Childcare services areaffordable due to the high means-tested subsidies from public sources. Regulated by the Pre-schoolChildcare Act, these subsidies are by far the biggest single transfer to families in Slovenia and aregoverned by municipalities. Children in compulsory and upper secondary education might be eligiblefor subsidised school meals – with some of these entitlements being universal rights and othersmeans-tested. Subsidised school transport is provided for pupils in upper secondary education andtertiary students.The Slovenian social protection system plays a significant role in maintaining low poverty rates inSlovenia. However, some drawbacks have become evident over time:a) Many state and municipality authorities are involved in assessing eligibility and disbursingthe benefits. Official records are not completely harmonised among the differentauthorities which leads to the possibility of incomes being underreported.b) The Slovenian social protection system enables the accumulation of benefits: a) relatingbenefits to the fact that one is receiving some other benefit; b) the non-inclusion of allincomes and benefits in family income when deciding on benefit entitlement; c) the2
definition of income ceilings for social benefit entitlement; d) the absence of a linkageamong registers of beneficiaries of various social benefits; and e) deficient co-ordinationand co-operation among authorities granting benefits etc. For example, the 10% childcaresubsidy and free lunches in primary school that are granted exclusively to social assistancebeneficiaries.c) Work incentives are low.d) The minimum income (which is the basis for social assistance and housing benefits) hasbecome too low.Therefore, the regulation concerning social benefits has been amended and two new Acts have beenadopted. 1 The Exercise of Rights to Public Funds Act introduces a “single entry point” andharmonises the criteria for granting four types of transfers and nine types of subsidies that are meanstested.The two main goals of the changes are to simplify the procedure of applying for transfers andsubsidies for the beneficiaries, while making the system more transparent and efficient and reducingthe possibility of fraud (by cross-checking income and wealth status). Centres for social work willbecome the “single entry point” in the system of social rights. Their work on applications will besupported by a centralised information system (a web application connecting different databases).The Financial Social Assistance Act introduces changes in the areas of financial social assistance andminimum pension support, previously governed by the Pension and Disability Insurance Act(National Reform Programme 2011-2012, 2011).For the purposes of assessing this ongoing comprehensive reform a second version of the Slovenianstatic microsimulation model has been constructed. The microsimulation model was a tool forestimating budgetary effects, identifying the winners and losers and assessing the distributionaleffects.The structure of the paper is as follows: Section 2 outlines the data and methodology, Section 3briefly describes the changes in social benefits, the results are presented in Section 4, while the finalsection offers some concluding remarks.2. DATA AND METHODOLOGYFor the purposes of the reform simulations, previous versions of the microsimulation model (Čok2002, Čok et al. 2004, Majcen et al. 2007) were updated and further developed. This second versionof the Slovenian static microsimulation model is based on a cross-sectional dataset representing apopulation of all ages at a certain point in time (the year 2007). The sample consists of 40,0001 The Acts were supposed to commence operation in June 2011. Since adequate records are not ensured (especiallyproperty valuation models) and the information system is not established yet the Acts will be enforced in January 2012.3
Page 1: Assessing the Benefits Reform in Sl
Page 5 and 6: Due to the lack of data it was impo
Page 7 and 8: Child benefit is currently a means-
Page 9 and 10: Currently, the people entitled to c
Page 11 and 12: child benefit for upper secondary s
Page 13 and 14: Table 11: Total effect of the forth

Assessing the Benefits Reform in Slovenia Using a Microsimulation ...

Create successful ePaper yourself

Delete template?

Save as template?