Social benefits have an important role in
supporting the vulnerable. The analysis of official data shows that pension
increases reduced poverty in Moldova by 12 percentage points. Still, these
increases are insufficient for a sizeable part of the population, including
retirees. The income of about four in 10 retirees is insufficient for avoiding
poverty. Another at-risk category is households with children. Social benefits
represent one of the income sources of these families. On average, they
contribute 7.2 percent to the incomes of the households with children, the most
important social benefits being the social insurance payments, especially
pensions (5.0 percent). Based on the welfare of families with children, it has
been assessed that social benefits, including pensions, contribute a greater
share of the income of the least prosperous households. This fact shows that
poor households are more dependent on social insurance payments.
Studies show that social
assistance has an insignificant effect on poverty. Poverty rates in the case of
households receiving social assistance payments (child care benefits and
individual allowances), differ by less than one percentage point before and
after the payment. From the perspective of the efficiency of social benefits
distribution, it should be pointed out that only 26 percent of the poorest
households benefited from individual allowances in the amount of 26.2 percent
of the total sum in 2008, while more prosperous households were granted 14.3
percent of the total amount for this type of benefits. It is forecast that the
introduction of social aid will improve the distribution of social benefits and
will contribute even more to the reduction of poverty. Besides the provision of
different social services, the current system for social protection of children
offers two types of social benefits for children, based on the principles of
social insurance and social assistance: i) child care benefits for children
under 1.5/3, independent of income; ii) child care benefits for children aged
between 1.5/3 and 16, depending on the income of the parents. These two types
of benefits are granted according to categories, so that the proportion of
households with children benefiting from these social payments practically does
not differ depending on the welfare of the household. An analysis of the way
childcare benefits for children under 1.5/3 cover households, shows that that
there are certain flaws, like the inclusion in the system of prosperous
households, the main reason being the gaps in the criteria applied when
assessing the real level of the household's welfare. In 2008, some 35 percent
of the poorest families received child care benefits amounting to 38 percent of
their income, while 6.6 percent of prosperous families received child care
benefits, with the sums covering 5.3 percent of their total income. At the same
time, once social aid based on an assessment of households' incomes was
introduced, the Government took the decision to annul child care benefits for
children aged between 1.5/3 and 16.
Targeting child care benefits
towards the most vulnerable categories is an effective way of using the
resources allocated to children. At the same time, the creation of an equitable
child support system can contribute to the reduction of child poverty only if
the payments are substantial. Over recent years, child care benefits have
increased; their size, however, is still insignificant. In this way, childcare
benefits for children aged under 1.5/3 contributed to the reduction of poverty
rate in 2008 by 0.5 percentage points, while child care benefits for children
aged between 1.5/3 and 16 contributed a 0.2 percentage point reduction.
Benefits paid by category have a greater impact on child poverty in urban
areas, since salaries are higher in cities and therefore the child care
benefits for children aged under 1.5/3 are more significant.
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