Economic Policy Review ISSN 1313 - 0544

Poverty and Social Assistance in Bulgaria

02.06.2015
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The Institute for Market Economics (IME) presents two research papers on the topic of poverty and social assistance in Bulgaria.

Poverty and Risk Groups

This analysis focuses on the extent of poverty in the country, and its purpose is to highlight the vulnerable groups (those at the highest risk of poverty). We introduce the term “deep poverty”, which we use as a starting point in highlighting the groups in the worst socio-economic position.

Investigating the risk groups helps to not only better understand poverty, but also point out the key factors leading to poverty, as well as raising awareness for certain policies for dealing with poverty. In the following analysis, we highlight the relations between the groups at highest risk and the respective spheres of public policy, which have the highest relevance for their condition. Understanding the relation between different risk groups and the leading factors and policies that affect them, is key for achieving results and especially for decreasing deep poverty.

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Challenges Faced by Social Assistance in Bulgaria

The Challenges before Social Assistance in Bulgaria Study was conducted under the Active Citizenship and Good Governance in Fighting Poverty Project. In line with the project’s purpose, the analysis tries to pay attention to some shortcomings of leading programmes in the field of social assistance. The main goal of the study is to distinguish the sources of inefficient allocation of public assistance under some programmes and to propose possible solutions that could cause more efficient and purposeful assistance for people who need it the most.

Some structural defects of the Bulgarian social support system are outlined in the first part of the analysis, and four basic programmes, which are a subject matter hereof, have been represented.

The second part analyses the four programmes in terms of the main indicators, used by the World Bank, regarding effectiveness. Based on this approach, two of the social assistance programmes – Provision of Public Assistance by Applying a Differentiated Approach and Funding Assistance for Heating – demonstrate good results, i.e. they are currently relatively effective regarding the allocation of funds and spending these funds for the poorest people. The other two main programmes, however – Supporting Families with Children and Social Integration of the Disabled – have been considered as poorly performing, i.e. they waste considerable public resources. The analysis contains specific recommendations for increasing the effectiveness of both programmes, and some of these are the enhancement of the role and the scope of the social assessment in respect of the disabled and implementation of a differentiated approach when estimating the rate of the child benefit.

The third part of the analysis attempts to assess the expected increase of the guaranteed minimum income concerning the rate of the granted support, the cost thereof and the number of beneficiaries. The analysis also regards the expected effect of the public assistance increase on the financial stimuli for the employed, the people working for low salaries and the economically inactive people to actively seek jobs or higher compensation for their labour. The conclusion is that the increase of social transfers should be differentiated and it should regard the country’s labour market reality. It is therefore necessary that the planned increases should be gradually implemented, and the people who need them more should get higher allowances respectively.

The fourth part of the study reasons the main principles that a future reform in the field of social assistance should be based on. These principles are the following:

  • Transparency pertaining to administrative bodies’ decisions and analysis of the effect of the implemented changes and the suggested ones;
  • A differentiated approach in terms of granting allowances;
  • The increase of public assistance should follow the rate of increase of the public well-being.

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The Active Citizenship and Good Governance in Fighting Poverty Project is being financed within the NGOs in Bulgaria Support Programme under the 2009–2014 Financial Mechanism of the European Economic Area. 

This document has been drafted with the financial support of the Non-governmental Organisations in Bulgaria Support Programme under the Financial Mechanism of the European Economic Area. The Institute for Market Economics is entirely liable for the contents of this document, and it shall be acknowledged under no circumstances that this document relays the official opinion of the Financial Mechanism of the European Economic Area and the Non-governmental Organisations in Bulgaria Support Programme Operator.

 http://www.ngogrants.bg/