Center for Public Expert Opinion analyzes the system of social protection and social security, effective in Ukraine

For almost a year, the Center for Public Expert Opinion under the support of the Rule of Law Program of the International Renaissance Foundation had been conducting a project called “New View on the System of Social Rights and Social Guarantees of the Citizens of Ukraine”. Specialists of the Center presented the results of the project during a roundtable.

The goal of the project is to initiate a public discussion of reforming Ukraine’s current system of social guarantees, benefits and social payments and services, by means of conducting a complex research of legislative and financial prerequisites and limitations that concern functioning of the current system of social protection and social security, and also to prepare corresponding proposals and recommendations.

Within the scope of fulfillment of this project, experts of the Center for Public Expert Opinion focused on issues that concerned both legislative regulation and financial base of the system of social protection and public welfare, which is currently effective in Ukraine. They actually conducted an audit of the overwhelming majority of available benefits, social payments and social services that are financed at the expense of the state budget and special purpose extra-budgetary funds (state funds of general mandatory social security).

Specialists of the Center for Public Expert Opinion note two differently directed vectors of development of the system of social protection and public welfare, which is effective in Ukraine:

1) consistent restoration of awkward, socially and financially unjustified system of benefits and social payments, with preservation of ineffective sophisticated system of state institutions of social protection that corresponds to traditions and approaches of the Soviet model;

2) introduction of new, more effective and economically sound forms and types of social protection, which are supported by development of a network of institutions of social service on the level of communities, which in a bigger way corresponds to the European model and international standards.

It should be noted that even after recognition of orientation on the European model as a strategic priority, quite a number of times Ukrainian lawmakers resorted to provision of benefits that had been familiar during the Soviet times; they were introducing such benefits for new categories of citizens especially in a broad way before some regular elections.

Thus, the mass of the legislation that is current today in the area of social protection and public welfare comprises legislative acts, which have been adopted in different times and are often contradictory. Additionally, the current legislation establishes many more various types of benefits, social payments and social services than stipulated by the Constitution of Ukraine or international and legal obligations of Ukraine. Without having necessary resources, the state takes upon itsefl additional obligations in the area of social protection and public welfare, which often does not provide any social or economic effect, except for establishment of privileges for representatives of certain professions or separate social groups.

At the same time, experts of the project draw attention to the fact that financing of different expenses in the area of social protection and public welfare at the expense of budget resources and special purpose extra-budgetary funds is being done not in a systemic and transparent manner. So, some expenses of social nature are listed, in addition to social protection and public welfare expense items, in other expense items of the budget too, namely: housing and communal services, education, spiritual and physical development, health care, public order and defense etc. Such way, expenses of social nature can be found practically in each of the expense items of a consolidated budget, which includes indices of state and local budgets.

Under such conditions, the real volume of all social expenses of the state will exceed by 3-4 times the volume, which is declared under the expense item “Social Protection and Public Welfare” of a consolidated budget.

In addition, there remains a problem of implementation of international and legal guarantees of citizens’ social rights and Ukraine’s international and legal obligations regarding modernization of the current system of social protection in the national legislation. In most cases, the laws on issues of ratification of international agreements are adopted without simultaneous adoption of new laws or making changes in Ukraine’s current laws, which arise out of these agreements. Thus, Ukraine recognizes international standards in the social area, but does not take sufficient measures for their practical implementation.

Specialists of the Center for Public Expert Opinion emphasize the necessity of conducting a system reform in the area of social protection and public welfare. In their view, the reform must be implemented in the following directions:

• review of legislation, which establishes different types of benefits and social payments, for the purpose of decreasing the number of categories of their recipients;
• implementation of a moratorium on establishment of new benefits and introduction of new categories of social security beneficiaries; provision of gradual transfer from the system of provision of benefits to people according to social feautures of their population group to a system of recipient-oriented social payments and social services;
• substitution of benefits according to professional categorization for an adequate remuneration for one’s labor — salary;
• review of the system of criteria and grounds, according to which benefits are provided to and social payments are assigned to citizens;
• ensuring of transparency and coordination under fulfillment and financing of all state programs of social purposes;
• coordination of current legislation in the area of social protection and public welfare with the current budgetary legislation;
• enhancing effectiveness of fulfillment of international and legal obligations, which Ukraine has taken upon itself, in the area of improvement of the state system of social protection and its integration into the international system, in particular, into the European one.

Seven facts about the system of social protection and public welfare, which is effective in Ukraine

• Various benefits, social payments and social services in Ukraine are directly stipulated in 58 laws and in more than 120 regulatory normative-legal acts.
• According to the current legislation of Ukraine, there are about 120 categories of social security beneficiaries, among which only 45 are determined according to their social features and 57 — by their professional categorization.
• In Ukraine, there are more than 130 categories of recipients of different social payments, among which only 70 receive payments according to their social features and about 50 — according to their professional categorization.
• All privileged categories, including socially unprotected ones, have the right for more than 120 types of benefits and more than 60 types of social payments.
• “Social Protection and Public Welfare” is the most cash-consuming budgetary item – it is even bigger than expenses for health care, education and economic activity.
• Under the ratio “Social expense to GDP”, the volume of social expenses* amounted to 29% of GDP in 2008 in Ukraine. Under this parameter, Ukraine is outpaced only by Sweden and France.
• In terms of per capita amount, social expenses in Ukraine are one of the lowest, if compared to developed countries: they amounted to 1,677 USD per year in 2005. In the indicated year, only Korea and Mexico had lower corresponding levels.

* Including expenses for social protection and public welfare, health care, education and sector social programs.

For additional information, please refer to:

Center for Public Expert Opinion

Project Director –Lyubomyr Chorniy

tel.: 8 (093) 246-02-46

е-mail: liubomyr.chornii@expertise.org.ua

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The Center for Public Expert Opinion is an independent analytical center, whose activity is directed on information, analytical and expert support to carrying out systemic changes both in public and private sectors of Ukraine.

The activity of the Center is based on combination of knowledge, qualification and experience of the organization’s members, who are experts in different areas: economy, investments and regional policy, state management, sociology, law and regulatory policy, state finances, budgetary and social policy etc.

			Vasуlуna Yavorska, Rule of Law Program Manager tel: +380 (44) 482 03 63 | fax: +380 (44) 486 76 29 email: yavorska@irf.kiev.ua office: Kyiv, Artema Street, 44, room 1