BY GEORGI SHOPOV
JUNE 1993, SOFIA
CONTENTS
I. Introduction
II. The Dimensions of Unemployment
and Poverty
Quantitative and Structural Changes in Unemployment
Dimensions of Poverty
III. Social Security of the
Unemployed and the Poor - Main Points in the Development of the
Legislative Framework since the Start of the Economic
Reform
Social Assistance and Social Benefits for Unemployment
Social Assistance of the Poor
Kinds of Social Grants
Eligibility for Social Assistance
IV. Conclusion
I. Introduction
The rapid pace of political and economic changes over the last
three years have faced Bulgaria with a great variety of challenges.
The transition to a democratic society and a market economy, which
is taking place under a deepening economic crisis, has caused - or,
rather, made obvious - a number of acute problems. Against this
background, unemployment and poverty proved to be the social
problems with the highest conflict-generating potential.
At the beginning of the economic reform in Bulgaria in 1991, there
was no social security legislation. Then, political parties, the
trade unions, the legislature and the executive realized that
unemployment and poverty were the crucial factors not only in the
maintenance of social peace, but also for gaining the electorate's
support and - in the long run - for the survival of the population.
The elaboration and implementation of measures and mechanisms of
social security to cope with unemployment and poverty became a
major priority in the social policy of the Government. This issue
was also addressed by the trade unions and the employers'
organizations, while the system of consultations between them
ultimately gained recognition as a basic pillar in the solution of
social problems.
The concrete situation of the country, the extremely difficult
economic conditions and the lack of previous experience have
resulted in a number of weaknesses in the social security system:
it remains fragmentary; it is still incomplete and unstable; and it
is still above all reactive. The social security measures have
often been directed at the solution of isolated problems caused by
the changing socio-economic environment. This explains the frequent
changes in the normative documents of the Government regulating
social security provisions.
In the course of reforms, and in 1992 in particular, the executive
undertook an accelerated development of the legislative framework
governing social security. Laws on job creation, unemployment
security and social assistance have been drafted, becoming further
steps to the establishment of a complete social safety net.
Except for the internal political and economic factors mentioned
above, the development of adequate social security schemes has been
provoked by a number of external factors. Guided by their
experience, international financial institutions (the European Bank
for Reconstruction and Development, the International Monetary
Fund) consider the existence of a social safety net an important
factor of stability and a guarantee for their loans and for the
programmes for economic stabilization and structural adjustment,
which they support.
All this has conditioned the specific nature of the social
security system in Bulgaria. The examination of its experience to
date is the main aim of the present study.
II. The Dimensions of Unemployment and
Poverty
It was only several years ago, within the socialist model of
development, that the phenomena of unemployment and poverty were
not officially recognized to exist. On the contrary, full
employment and guaranteed (although low) incomes were considered
indicators of social prosperity. This artificially maintained
employment gave birth to the so-called "hidden unemployment". The
latter was one of the reasons for low labour efficiency and was
accompanied by low and very slightly differentiated wages.
The liberalization of economic relations has made impossible the
further maintenance of artificially full employment and guaranteed
labour incomes for all able-bodied individuals. The rising number
of unemployed accompanied by the inevitable fall in their incomes
and the high inflation rate have become the main reasons for the
fall in the standard of living of a great proportion of the
population.
Quantitative and Structural Changes in
Unemployment
Data analysis for the period between mid-1990 (when the
statistical reporting of unemployment started) and the beginning of
1993 shows a steady increase in unemployment.
This period, the number of unemployed grew 18-fold. The
unemployment rate shot up from under one per cent in 1990 to 15.2
per cent by the end of 1992. The average monthly increase in the
number of unemployed in 1992 was more than 13 thousand. As a whole,
this rate has been slowing down compared to 1991. However, it can
hardly be considered as the result of a better labour market
situation or a higher demand of labour. It is rather due to a
"stabilization of the process following the massive increase at the
end of 1990 and in early 1991 ",1
This resulted directly from the worsening economic situation and
the delay in structural reforms. It is no mere accident that the
average number of vacancies on offer stands at about one per 80
unemployed. The unfavorable economic environment and the still
absent macroeconomic stabilization impede the implementation of an
effective job-creation policy and bring about an increase in the
number of long-term unemployed. An indicator of this is the
declining proportion of people eligible for unemployment benefit,
which means that there is an increase in the number of people with
expired terms of benefit.
The age structure of the unemployed is characterized by a high
proportion of people under 30. They account for 45 to 47 per cent
of total unemployment. The particularly hard social problem of
"youth unemployment" therefore emerges, and its solution requires
special measures (adequate occupational training in tune with the
requirements of the labour market, consulting services and training
aimed at starting own business, easy credit terms).
The share of unemployed aged between 30 and 50 is also very high
(48 to 50 per cent). Most of them belong to the group of long-term
unemployed and are suffering serious losses of qualification, which
means weak competitive chances on the unbalanced labour market.
The structure of unemployment by sex is characterized by a
declining trend in female unemployment, with some elements of
stabilization. The share of female employment fell from 54.5 per
cent in 1991 to 52.4 per cent in 1992, which is quite insignificant
compared to the previous year. Women under 30 and over 50 are in a
particularly disadvantaged position on the labour market.
The share of unemployed with higher education degrees has shown a
clear fall - from 16.2 per cent in 1990 to 6.1 per cent at the end
of 1992. This is an indication that in the process of labour market
formation and unfavorable economic conditions, the highly skilled
are more competitive and have better job prospects.
This was not typical of the centrally-planned economies and points
to a certain "normalizing" of economic values.
Dimensions of Poverty
In Bulgaria, there is no officially adopted "poverty line", which
necessitates the use of other indicators of impoverishment
The analysis of changes in the share of persons and households
with incomes at less than 50 per cent the average for the country,
which is a traditionally applied indicator of relative
impoverishment, points to a trend of expanding poverty in the years
of reforms. This is more clearly expressed with individuals (whose
share increased from 8 per cent in 1990 to 13 per cent in 1992)
than families (7 per cent and 8 per cent). An explanation for this
is the redistribution of incomes within households and the
crisis-driven consolidation of family and kinship ties, which arc
quite typical of the Bulgarian national psychology.
The trend of expanding poverty and deepening income inequality is
also confirmed by another widely used indicator: the share of
people with incomes below the minimum social level. This share
raised from 29 per cent in 1989 and 41 per cent in 1990 to 66
percent in 1991 and to more than 70 per cent at the end of
1992.
Specific indicators of poverty are also the ratios of the minimum
social level and the following three values: (i) the average wage;
(ii) the average pension; (iii) the minimum wage. In the first
instance, the decrease is from 153 to 128 percent; in the second -
from 94 to 67 percent; in the third - from 78 to 49 percent. These
basic sources of income are lagging behind the minimum social
level, which affects directly the ability of population to meet its
necessities.
Another indicator of poverty in Bulgaria is the number and size of
social benefits. The changes they undergo depend on the legislative
framework of social assistance and reveal the extent of its
efficiency. Data show a steady increase in the number and range of
beneficiaries. Special attention should be paid to the sharp growth
in 1992 of the number of beneficiaries and expenditures on social
grants as compared to 1991.
A sociological survey showed that, by December 1991, there was an
unemployed member in one out of every seven families. More than 60
per cent of those families had children. In households with
unemployed members, the gross average per capita income was about
18 per cent lower and the monetary income - about 20 per cent below
the incomes of the rest of households. The greater the number of
unemployed, the greater the decrease in the disposable income per
household. Households with more than one unemployed had gross
average per capita income at 45 per cent and monetary income at
about 53 per cent lower than those with one unemployed.2
A study carried out by the Center for Social Security and Social
Assistance at the Ministry of Labour and Social Welfare in the fall
of 1992 revealed that households with unemployed members had the
biggest share (85 per cent) in getting social assistance. In almost
half of them (41 per cent) or 11,500, there were two unemployed
members. Bearing in mind the deteriorating labour market situation,
it is not difficult to suppose that unemployment will be among the
factors affecting most strongly the impoverishment of the
population in the near future.
The analysis of poverty leads to the conclusion that a
considerable proportion of the Bulgarian population, living under
the burden of economic crisis and transition, actually struggles
for survival. The on-going economic processes give little
indication of a likely upturn in the near future. This, in its
turn, implies an increasing pressure on the social safety net.
III. Social Security of the Unemployed and the
Poor - Main Points in the
Development of the Legislative Framework since the Start of the
Economic Reform
In Bulgaria, the social security system still lacks a sound
legislative basis. Two draft laws are under discussion both in the
Tripartite Commission (employers, trade unions, government) and in
Parliament: the draft law on social security for unemployment and
the promotion of employment, and the draft law on social
assistance.
Formerly, social security and the assistance to the unemployed and
the poor were based on governmental decrees. In this way, the
executive enjoyed a considerable room for maneuver in making
decisions and undertaking measures in accordance with the changing
environment. This accumulated experience was used in the
elaboration of relevant draft laws. An important aspect of the
Government's approach in 1992 was that some key elements of those
draft laws were to be implemented in advance by means of decrees.
This allowed both the testing of their key elements and the
building of prerequisites for the practical implementation of laws
themselves once they had been adopted by Parliament.
Social Assistance and Social Benefits for Unemployment
In Bulgaria, the introduction of income-supporting schemes for the
unemployed has a very short history. The abolition of compulsory
job security (through a change in the Labour Code in 1990) and the
steep rise in unemployment called for urgent measures concerning
the social security of the unemployed and its improvement. Decree
57 (1989) of the Council of Ministers was the first government
document in this respect, which underwent a series of changes and
amendments in 1990-1992. The major changes were related to: (i) the
conditions regulating the entitlement to unemployment benefits;
(ii) the kind, size and length of payment; (ui) the sources of
financing.
The conditions for entitlement to unemployment benefits are in the
process of both becoming more targeted, and covering a wider range
of cases. This allows an enlargement of the circle of persons
eligible for unemployment benefit
In 1989, only people dismissed as the result of redundancies due
to "the improvement of labour organization and management, full or
partial liquidation, giving sites in rent, etc." were eligible. In
1990, when dismissals for economic reasons were legalized, the
network of social benefits expanded to cover people who were fired
for reasons other than personal behavior.
Since June 1991, people with expired labour contracts have also
been covered by the system. In this way, the system of benefits
became more adequate to the developing labour market. The scope of
the system was further widened with regard to young workers and
graduates who are newcomers to the labour market
Another important condition for access to unemployment benefit is
the length of last service, which was introduced in October 1990.
According to this condition, the unemployed should have worked for
at least 6 months during the last 12 months before his/her
dismissal. In this way, the system is made more precise, its
financial stability is provided to a certain extent and claims by
seasonal workers (in tourism, in particular) are difficult.
There is also a number of conditions which limit access to
unemployment benefit and through which the targeting of the system
is improved and the prerequisites are created to relieve the
pressure on this component of the social safety net These
limitations include cases when: the person is working on a labour
contract; the person has registered his/her own firm or has shares
in a collective firm;
income is received from craftsmanship or other free-lance
activities; he/she draws a pension; regular monthly income is
received on short-term labour contracts, which is higher than 150
per cent the minimum wage; the person is reluctant to accept a job
or attend a training or retraining course offered by the labour
bureau. Also, an important condition is that the unemployed
individuals declare regularly their active search for a job and
their willingness to start work, provided job opportunities are
offered by the labour bureau.3 All this is aimed at providing
unemployment benefits and assistance only to people who meet the
relevant eligibility criteria.
Kinds, Size and Length of Unemployment Payments
(i) There are two kinds of unemployment payments:
compensations and social benefits. Compensations are paid to
"secure" unemployed individuals on the basis of employers'
contributions for social insurance. Benefits are provided for
particular groups of unemployed (higher education graduates and
qualified workers), without insurance contributions. Both kinds of
payment are universal in nature and do not account for differences
in the property, income or marital status of beneficiaries.
(ii) There is a tendency towards the reduction of compensation
differentiation. Until June 1991, there was a progressive monthly
decrease in compensations as a percentage of the previous wage
received (100 per cent, 90 per cent, 80 per cent, 70 per cent and
60 per cent); for the last three months, the unemployed was
entitled a compensation equal to the minimum wage. In the period
between June 1991 and July 1992, the amount of compensation was
formed as a sum total of the minimum wage plus 20 per cent of the
difference up to the average monthly remuneration, which would have
been the basis for the employers' contributions in the last six
months preceding the dismissal.
At present, unemployment compensation stands at 60 per cent of the
average gross remuneration in the preceding six months. An upper
and a lower limit were introduced, at 140 per cent and 90 per cent
of the minimum wage. Social benefits for unemployed graduates and
young workers are 80 per cent of the minimum wage. The reduced
differentiation implies a decrease in expenditures and
preconditions the promotion of job search/acceptance on the part of
unemployed.
(iii) The length of unemployment payments depends on the age group
and length of service of beneficiaries. The age component is given
a higher priority, aiming at the protection of older workers and
employees who are less competitive on the labour market.
Unemployment payments are received for a period of 6 to 12 months.
After this term has expired (or parallel with it), the "second
social safety net" comes into operation under certain
conditions.
Financing of the System of Unemployment Compensations and
Benefits
Unemployment compensations and benefits are financed by the
special "Vocational Qualification
and Unemployment" Fund - VQU.4
For the time being, the VQU Fund still lacks the characteristics
typical of a classic unemployment insurance fund. It is formed only
by employers' contributions; moreover, this kind of contributions
are not made for the employees in the budget sphere (the public
sector).5
In the last few years, there has been a clear trend towards an
increase in the rate of contributions aiming at the financial
stability of the Fund in accordance with rising unemployment At
present, the insurance contributions are 7 per cent of the actual
payroll, against 5 per cent in 1991, 3.75 per cent in 1990 and only
0.5 per cent in 1989. Obviously, these contributions turn out to be
a peculiar "resource tax" which raises the price of labour and is
entirely at the employer's expense. Parliament did not adopt a
proposal of the Government from early 1992, according to which
insurance contributions to the VQU Fund should be paid partially by
the employees. The main argument against this was the low level of
wages in Bulgaria. These are therefore problems to be settled and
regulated by the Law to come on unemployment security and job
creation.
Social Assistance of the Poor
Unlike the income supporting schemes for the unemployed, the
system of social assistance in Bulgaria has been created and
developed during the last three or four decades, albeit, of course,
in compliance with the conditions and requirements of a centrally
planned economy and the socialist ideas and principles of social
policy. With the start of reforms in 1991 and the problems of
poverty under the conditions of economic crisis, Bulgaria turned
out to be lacking an adequate system for the social assistance of
the poor. The only existing and still valid Law on social
assistance dates back to 1951. The elaboration and implementation
of relevant measures is taking place piecemeal, "on-the-move", and
quite often by trial-end-error. Yet, the development of poverty
relief has gradually become one of the priorities of social policy.
The unfavorable economic situation and the restrictive budget
policy require specific (and, at the same time, mainly reactive)
measures for relieving the situation of people in poor financial
circumstances. This environment determines the specificity of the
Bulgarian practice of social assistance.
Since the beginning of the economic reform, three mechanisms
(schemes) of social assistance have been in successive operation in
Bulgaria. The main points in their development were related to the
conditions of eligibility, the size, length, kinds and ways of
financing.
Kinds of Social Grants
According to their regularity, social grants are monthly, one-off
and regular (up to six times a year). According to their economic
form, they are in-cash, in-kind and in services. Monthly grants
(in-cash) are usually permanent and are given while the eligibility
conditions exist One-off and regular aid (in-cash or in-kind) are
at the discretion of local welfare officials. They are for persons
with urgent financial needs and/or temporarily poor financial
circumstances and for the meeting of certain extreme necessities,
e.g. purchase of expensive medicines, coverage of damages for a
destroyed house, meeting seasonal needs (warm clothes, heating).
Some groups of the population (mothers of many children, people
with disabilities) are allowed free railway or water transport,
assisted payment of telephone services, free or partial payment of
balneotherapy for disabled people. Local welfare authorities may
provide coupons for free or subsidized food in public kitchens,
provide services in buying and delivering food at home, and also
provide public services.6
As a whole, the changes with regard to social grants in the form
of services or in-kind are insignificant. There is an urgent need,
however, to develop and implement specialized programmes for
in-kind assisting of groups at particular risk. Such programmes are
to supplement the scheme of in-cash assistance and stabilize the
poverty relief network.
Eligibility for Social Assistance.7
In early 1991, the inherited system of monetary assistance as a
product of the "socialist social policy" did not acknowledge the
existence of the poor. It was directed to the so-called "socially
disadvantaged" individuals and families. A family was considered
socially disadvantaged and became eligible for monthly assistance
if its monthly income was below BGL 70 8 for the
first member, additional BGL 50 for the second member and BGL 40
for each of the other members of the family. The monthly grants
were supplementing the family income to a certain amount Aside from
income, an essential eligibility factor was membership of a
strictly defined category, for instance, the disabled, the single
elderly people, some groups of children and teenagers at risk,
families with many children. Political considerations were quite
typical of this scheme of determining the above-mentioned
categories, giving freer access and certain privileges to people
who were close to the regime. Regardless of incomes, some of them
enjoyed special privileges in receiving free medicines and
balneotherapy, they had priorities in buying flats and were allowed
even the free use of public baths.
Naturally, this kind of scheme proved to be inadequate in the
changing and increasingly difficult socio-economic environment, for
at least two reasons: first, the targeting of social assistance was
poor and unreliable because, on the one hand, the income level was
considered a sufficient eligibility factor and, on the other, the
property status of the would-be beneficiary was not taken into
consideration; second, the size of grants was determined on the
basis of fixed amounts, which were losing rapidly their purchasing
power with the growing inflation rate.
In March 1991, a number of amendments were introduced to this
scheme. According to the new Regulation on Social Assistance,
"socially disadvantaged" were considered families with per capita
income of less than 65 per cent the minimum wage. This was aimed at
achieving higher flexibility and adaptability of social assistance.
For the first time, some limitations were introduced regarding the
property status of people (own house, real estate and/or movable
property, which can be a source of income). This was a step towards
the better targeting of social grants. The circle of people
eligible for social assistance was thus divested of its political
characteristics.
Yet, this mechanism bears some of the shortcomings already
mentioned. Again, the minimum income test criterion is per capita
income and doesn't differ according to the number and age of
members in the family. Moreover, monthly social benefits are
envisaged rather as a legal opportunity (i.e., the estimation of
local welfare authorities is decisive) and not a guaranteed right
to everybody who needs them.
Through the changes made in August 1991, more precise preliminary
requirements were introduced regarding the property status of
socially disadvantaged individuals and families. It was stipulated,
for instance, that one and two-member families should inhabit a
single-room (plus lavatory) dwelling; three and four-member
families - a double-room (plus lavatory) dwelling. In case these
limitations were exceeded, a part of the house was to be given in
rent so as to become a probable source of income.
The monthly social assistance was to cover the expenses on
heating, electricity, rents and unavoidable personal needs (food in
particular). The latter component of social assistance was fixed as
a percentage of the minimum wage and differed according to the
number and age of family members, as follows: for the first
working-age member - 37 per cent; for each of the rest - 24 per
cent; for each member at retirement age (55 for females and 60 for
males) - 40 percent.
A positive element was the requirement for the unemployed
beneficiaries to be registered with the local labour bureaus as
actively looking for job.
With those changes, the eligibility for social assistance was
related to the final result (the status of poverty) and not to the
initiating factors, while the social grants were minimal and
differentiated.
A shortcoming of this scheme was the retained functional relation
of social grants to the minimum wage. This resulted in the
"freezing" of the former, as the minimum wage remained constant
within a whole year. The very method of calculation created
difficulties for welfare officials. Students turned out to be also
subject to social assistance, thus increasing enormously the
pressure upon the system and causing additional expenditures. Due
to the underdeveloped tax administration, the control on declared
incomes was hampered when carrying out the means tests. The
rigorous property status requirements turned to be a factor for an
increase in expenditures as a result of "poorly weighted" one-time
or regular benefits, which were granted on the decision of social
welfare services.
These circumstances implied new and, in some respects, radical
changes in the system of social assistance for making it more
adequate to the internal socio-economic realities as well as to the
requirements of the international financial institutions and the
similar systems applied in the EC member-countries. These changes
were necessary, so that the system could cope with the increasing
number of able-bodied and non-working people, who were in need of
temporary income support rather than social services.
The major efforts were focused on the building of an adequate and
flexible income-supporting scheme for the poor, to whom social
assistance was given after checking income and property status,
i.e. the so-called means-test. The proper targeting of benefits was
to be achieved in that way. It was stated that this scheme should
become the foundation of social assistance under the new
conditions. The essence of this well-known scheme existing in a
number of countries (England, Belgium, the Netherlands, France)
consists in providing assistance which guarantees a minimum
subsistence level, provided that the applicant meets the strictly
fixed requirements of the means-test. The social grants were to be
transformed into multi-targeted benefits of the highest instance
and turn into the last resort for beneficiaries.9
In this connection, a number of changes were introduced:
(i) abolition of the direct dependence of social benefits on the
minimum wage
(ii) a guaranteed basic minimum income (BMI) to people who have
proved to be eligible for regular social assistance
(iii) a differentiation of the BMI according to the family
structure and formation of its guaranteed minimum income (GMI)
(iv) regulation of the size of benefits, in order to increase the
incentives for beneficiaries to actively offer their work force on
the labour market
(v) conforming the size of BMI to the rest of minimum incomes
(minimum pension and minimum wage, unemployment compensations), in
order to maintain the ratios between them and avoid the inflow of
pensioners, insured unemployed and low-paid employees into the
system of social assistance.
The current income support scheme for the poor, which was
introduced in July 1992, made for the accomplishment of these
measures. A basic minimum income was introduced with an initial
size of BGL 500. It was below the level of former minimum wage (BGL
850), the retirement minimum pension (about BGL 500) and the
minimum unemployment compensation. The size of GMI is determined
according to the number of members in the family, by applying to
the BMI the following system of coefficients: for single persons -
1.00; for spouses - 1.80; for each child - 0.40; for persons living
together - 0.90 each.10 To maintain the incentives for searching
and accepting a job, 20 per cent of the labour incomes of
beneficiaries is not taken into consideration when determining
their personal incomes.
In this situation, the BMI (the GMI, respectively) is aiming at
the relief of beneficiaries, by providing for their subsistence
level. It is universal in nature, because it is destined for the
poor regardless of the reasons of their poverty. At the same time,
it is a targeted assistance, aimed at people who meet particular
requirements. The conclusion, therefore, can be made that by these
parameters the Bulgarian income support system for the poor
approaches European practice and standards. But there is a growing
need for programmes on the development of additional services, aid
and relief for particular risk groups of the population. The policy
against poverty should thus become multilateral and complex.
Size and Length of Social Grants
By March 1993, after compensatory measures, the BMI was fixed at
BGL 750. This is the maximum monthly social assistance for a single
person without any income. For families, it differs according to
the system of coefficients mentioned above. If the individual or
the family disposes of some income, then social assistance
supplements it to the maximum allowed amount of BMI (resp. of
GMI).
Monthly social grants are not limited in time and depend only on
the availability of eligibility conditions and can be constantly
renewed.
The amounts of one-off and regular social grants are not strictly
fixed. Given that expenditure on these grants is heaviest, a more
complicated procedure is being applied to grants which exceed two
times the size of the BMI. There is also a limitation according to
which regular grants are allowed up to 6 times a year. Besides,
monthly grants are financed with priority as they are guaranteed to
the beneficiaries.
Financing
Financing is based on the principle of national solidarity and is
carried out by, and at the expense of, local budgets. According to
the Law on the State Budget, these are to provide a fixed minimum
of resources for the needs of social assistance. For its part, the
central (state) budget provides for the local budgets targeted
funds for social needs.
The shortcomings of this system of financing are as follows:
- the unstable financial condition of most of the local budgets,
which cannot rely on considerable own receipts given the stagnation
of local economies
- because the Law on the State Budget is passed with delay by
Parliament (usually in the spring of the current financial year),
local authorities can dispose only of limited financial
resources
- the intermunicipal redistribution of funds is quite difficult as
municipalities are autonomous in making decisions relating to the
social sphere;
- the Ministry of Labour and Social Welfare is not able to provide
mechanisms and additional financial resources for the local welfare
services.
All these factors "contribute" to the delayed payment of social
grants and the inefficient functioning of the system and also give
rise to social tension.
The New Legislative Framework of Social Assistance.
The changes in the schemes of social assistance during the last
few years were mainly aimed at the adjustment and stabilization of
the working elements of the existing system. The development of the
new legislative framework of social assistance was a parallel task
of equal importance. In the fall of 1992, the Government put
forward in the Parliament the draft law on social assistance.
Its main aspects refer to:
First, the regulation of rights and responsibilities of the state,
institutions and citizens with regard to social assistance.
Second, the main goal of the Law is defined as securing the social
safety of population, i.e. social assistance is considered one of
the elements of the social safety net.
Third, the establishment of a minimum income security system which
makes social grants targeted and the regulation of particular
additional services and relieves given to indigent people.
Forth, the defining of social assistance eligible individuals and
the relevant conditions. A new individual right is thus legally
approved, i.e. the entitlement to social assistance under certain
conditions and circumstances.
Fifth, the legal regulation of kinds and forms of social
assistance.
Sixth, the additional relief for particular groups who are in need
of specific social protection and assistance - the disabled and the
old mainly.
Seventh, the issues of organization, financing and control over
the system of social assistance. Unlike the present situation of
limited possibilities and influence, the Ministry of Labour and
Social Welfare will be entitled to greater rights and
responsibilities in this sphere.
The draft law has been given the support of the "social partners"
(the trade unions and the employers' organizations) and the World
Bank experts who have contributed to the elaboration of the
document by way of recommendations and suggestions.
IV. Conclusion
1. The transition from a centrally planned to a market economy in
Bulgaria is taking place under the conditions of deep economic
crisis and it is accompanied by a growth in unemployment and
poverty. The development of programmes for the limitation of these
social problems and their effects therefore has become a priority
of the newly formed social policy.
2. The foundations of social security for the unemployed and the
poor have been laid in Bulgaria. There are structures established,
they work and provide this kind of minimum social safety.
3. Most of these structures are still governmental. The
non-governmental organizations arc few in number and their role in
social security is insignificant. This points to one of the main
directions of future development - non-governmental forms of social
protection.
4. The development of a new legislative framework of social
security is forthcoming, with the relevant institutional structures
being reorganized and improved on its basis.
5. In the course of developments, the issue of priorities and
technical assistance by international institutions and
organizations have become key problems.
6. In conclusion, it should be pointed out that no social safety
net can sustain an ever growing pressure on it. This implies,
therefore, that the long-lasting effects of policies on poverty and
unemployment limitation will depend on the progress of economic
reforms and the revival of the economy.
1 Burszashki.S. "Employment and unemployment in the
Process of Stabilization", Agency for Economic Co-ordination and
Development, Sofia, 1992, p. 11.
2. See: Social and Financial Problems of Households in the
Transition to Market Economy. National Statistical Institute,
Sofia. 1992, p. 12.
3 See: Decree 209 (1992) of the Council of Ministers, State
Gazette, iss.90, 1992.
4. As it is seen from its name, this Fund also covers the
expenditures on qualification and retraining of unemployed
(amounting to about 2 per cent of total resources), the maintenance
of labour bureaus and the promotion of some active job-creation
measures.
5. All the expenditures, however, made by the VQU Fund on
compensations for the unemployed from this sphere are covered by
the state budget.
6 . There is also a network of public welfare institutions for
servicing aged people and people with physical or mental
disabilities.
7. The regular monthly in-cash assistance is considered here. "
This amounted to about 42 per cent of the minimum wage in 1990.
8. This amounted to about 42 per cent of the minimum wage in
1990.
9. The outlined essential features of the income supporting scheme
for the poor have been summarized in the Report of N.Bare,
disseminated by the World Bank in November 1991. It is the result
of profound discussions of leading experts.
10. In this way, the system is oriented at households as well.
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