Economic Reform Programme 2022-2024 -MODS proposals 

MODS proposals for ERP measures within the area of SOCIAL PROTECTION AND INCLUSION

As of 2015, all candidate countries and potential candidates submit annual Economic Reform Programmes (ERP) to the European Commission. They are an expanded version of the previous Pre-Accession Economic Programmes for candidate countries. The ERPs contain medium-term macroeconomic projections (including for GDP growth, inflation, trade balance and capital flows), budgetary plans for the next three years and a structural reform agenda.

The Economic Reform Programme 2022-2024 was adopted by the Government of of the Republic of Serbia on January 20, 2022.

MODS prepared proposals for ERP 2022-24 measures within the area of SOCIAL PROTECTION AND INCLUSION.

Within the 5.2.12 area of the draft Economic Reform Programme 2022-2024, there is a lack of STRUCTURAL REFORM in the field of SOCIAL PROTECTION AND INCLUSION. This gap is visible mainly in the lack of measures and activities related to increasing the coverage and adequacy of social benefits, as well as improving the quality of social protection. Thus, it is of the utmost importance to establish and expand the reform by introducing measures that will directly contribute to the improvement of the situation of the poorest and most vulnerable categories in the country. Recommendation no. 6 of The EU Economic and Financial Affairs Council states: “Reduce poverty by increasing the adequacy of benefits of the Financial Social Assistance (FSA) scheme for individuals and families with children” [1]

Activities presented at the Economic Reform Program 2022-2024 (5.2.12. The area of SOCIAL PROTECTION AND INCLUSION) are primarily focused on the Social Card Bill and the establishment of the register “Social Card”

We emphasize that further investments are necessary to ensure that every child can reach their full potential. It is necessary to introduce the following measures:

1. Guarantees for Every Child which will include: a. Decent and adequate housing conditions; b. Good quality of education; c. Protection from all forms of violence and exploitation; d. Good quality and affordable health care and environment; e. Full support for living and staying in a family that is a safe and supportive place, all with the aim of providing equal conditions for every child;
2. Increasing social protection expenditures – In Serbia, public spending on social protection has been gradually declining. Expenditures for social protection are below the EU average and the benefits are not commensurate with the cost of living. In Serbia, social protection expenditures amounted to 19.4% of GDP (2018), while in the EU to 27.8% (2017). Since social protection expenditures are one of the most important indicators for the scope of intervention that provides citizens with protection and security, it is necessary to envisage measures related to increasing social protection expenditures;
3. Increase social assistance expenditures – Social assistance expenditures amounted to 2.9 GDP in 2020 (3.1% of GDP in 2019), which, as the report states, is insufficient for systematic focus on users who need help the most;
4. Increase in total allocations of child allowance – For years now, children and families with more children are at the highest risk of poverty and are most exposed to poverty. Nevertheless, total child allowance allocations, as one of the poverty reduction measures, are declining. The number of children who were entitled to child allowance in the period 2013-2019 has been reduced by a margin of 94,000. Measures that need to be implemented are related to child allowance policies, all with the aim of better targeting, and should include higher birth order children and children from particularly vulnerable groups.
5. Increasing the coverage of the financial social assistance (NSP) and, at the same time, increasing the amount of assistance – Financial social assistance (NSP), a basic program for the protection of the poor in the Republic of Serbia, covers just under 100,000 families and close to 250,000 people. This kind of (cash) social assistance does not provide sufficient coverage and is not effective enough. Approximately, 3-4% of the population receives NSP which is less than half of the number of people living in absolute poverty. NSP share of GDP is about 0.35% which is significantly lower compared to other European countries. Also, in the period 2013-2019, the number of families exercising the right to financial social assistance was reduced by over 14,000. Since the amounts of NSPs are insufficient to meet the basic needs and to prevent the deepening of poverty, it is necessary to increase the coverage and amount of NSPs.
6. Adoption of a strategic framework for the development of social protection in Serbia – This should be done by using а transparent and consultative process of defining and adopting the Strategy for the development of social protection. This Strategy should include a detailed plan for financing social protection services which will also encourage local governments to start participating in providing these services at the local level.
7. Amends the Law on Social Protection – These changes should be directed towards providing adequate financial and material assistance that will not be conditioned in a way that endangers the rights and dignity of citizens, and will not lead to their exploitation and abuse. They should also aim at developing and financing social protection services that will support the independence and autonomy of the most vulnerable social groups and children, and provide long-term care for children with disabilities in a non-institutional environment. In addition to amendments to the Law on Social Protection, further work should be done on introducing amendments and defining new bylaws that would regulate special areas of social protection and would lead to an increase in the coverage and adequacy of social protection services (e.g. Rulebook on minimum standards for providing counselling and therapeutic services or Amendments to the Rulebook on Licensing of Service Providers). It is necessary to omit the time limit for receiving cash social assistance (NSP) which states that an individual who is able to work, or a family in which most members are able to work, receive cash social assistance for only up to nine months during the calendar years. The interruption in the provision of financial social assistance leaves individuals at risk of falling into deeper poverty and may affect the greater presence of informal work, i.e., “undeclared work”.

8. Simplify the procedure for exercising the right – The right to different types of material support is exercised in order to ensure the subsistence minimum and support social inclusion of users. The Law on Social Protection should be harmonized with the Law on General Administrative Procedure, according to which the responsible body is obliged to collect data on facts necessary for decision-making. Accordingly, the Center for Social Work should be obliged, when deciding on the right to financial and material support, to inspect and process data from available records. This would simplify the procedure for beneficiaries to exercise their rights. It would also reduce the risk for persons who are unable to provide an existential minimum, not to exercise their right to social protection due to complicated administrative procedures.
9. Implement the general ban on the admission of children to institutions, including children with disabilities, by providing emergency support to children and families at risk. This support might include assistance to social work centers in finding adequate solutions for children at risk of separation, professional and material support, or the development of appropriate community-based services to support the family. It is necessary to introduce services that will primarily support the family and prevent the separation of children from the family, or, if separation does occur, provide the most appropriate form of care for each child in accordance with the principles of the UN Guidelines for Alternative Care.
10. Preventing further investments in an infrastructural strengthening of institutions – Serbia has an immediate obligation to “ensure that public or private funds are not used for the maintenance, renovation, construction or creation of any form of institution or institutionalization.” Funds need to be redirected to the improvement of professional and financial support to the families, the development of specialized foster care, and the accessibility of general services in the community for children with disabilities and their families. The state should ensure the availability of various alternative care arrangements, in line with the principles of necessity and appropriateness (crisis, short-term and long-term care).
11. Adoption of a fixed term plan for closing all institutions for children in the next 5 years – Considering the existing experience and expertise in implementing the process of deinstitutionalization of a large number of children without parental care, it is realistic to predict that the deinstitutionalization process for all children could be implemented in the next 5 years. It is imperative to make plans, without any further delay, to close institutions and redirect human and material capacities towards the development of sustainable support services for families, with the active participation of organizations of persons with disabilities.
12. Provide adequate professional and financial support to families to prevent the separation and institutionalization of children based on the disability of a child or parent – Programs should be designed to help families at greatest risk, including families of children with disabilities, single mothers, and children living in poverty. It is especially important to resolve the issue of financing community-based services from the central level until the conditions are created for local governments to ensure their further development and sustainability.
13. Improvement of the mechanism for earmarked transfers – provide a mandatory part of the funds for the provision of support services to families with children.

[1] Joint Conclusions of the Economic and Financial Dialogue between the EU and the Western Balkans and Turkey – https://data.consilium.europa.eu/doc/document/ST-10622-2021-INIT/en/pdf