New report finds most national minimum income schemes fall short of EU objectives
Newsletter 2009-2
Publication date : 2009-10-14
The
importance of ensuring adequate social safety nets has grown considerably with the
current economic downturn. Yet, according to a recent overview prepared by the
Core Team of the European Network of Independent Experts on Social Inclusion, most
countries within the EU still fall far short of having sufficiently developed and/or
generous minimum income schemes (MISs) that allow people to live their lives
with dignity. However, in many cases they do play an important role in reducing
the severity of poverty. The
overview, which draws on national non-governmental reports assessing the different
Member States’ MISs, comes just one year after the Commission published its
Recommendation on the active inclusion of people excluded from the labour
market1. The Recommendation,
adopted on 3 October 2008, contains common principles and practical guidelines
for a comprehensive social inclusion strategy, based on a combination of three
policy pillars: adequate income support, inclusive labour markets and access to
quality services. The minimum income strand of the Recommendation calls on
Member States “to recognise the basic right of a person to sufficient resources
and social assistance to live in a manner compatible with human dignity as part
of a comprehensive and consistent drive to combat social exclusion”. However,
the overview reveals that, although most Member States (with the exception of
Greece and Italy) have some form of minimum income scheme at the national level
to help people of working age ensure a minimum standard of living for themselves
and their dependants when they have no other means of financial support, these
vary widely in their coverage, comprehensiveness and effectiveness. It also
highlights that MISs work best when they are clearly a scheme of last resort operating
within a comprehensive and effective social protection system. In
the countries with the most generous and effective MISs, there is a clear
recognition that they play a vital role in ensuring that people do not become
so demoralised and excluded that they are incapable of participating in active
inclusion measures and effectively seeking work. More generous social benefits are
seen as a means to invest in people’s capabilities and, thus, to re-integrate them
into society as well as the labour market. Even
in countries with the most comprehensive schemes, some groups are often
excluded from minimum financial assistance. In particular, these include homeless
people, undocumented migrants, refugees and asylum seekers. Indeed, meeting
strict eligibility criteria generally presents more of a problem for vulnerable
groups. For example, requirements for individuals to have ownership/tenant
status in order to receive housing allowances means the segregated Roma
community is often excluded from this type of financial aid. Further to this,
wide variations in eligibility conditions across countries and an increasing trend
to tighten eligibility conditions, namely by making payments conditional on agreeing
to some sort of insertion contract, mean there are still many people on very low
incomes without access to MISs. The
non-take-up of entitlements emerges as a major problem in a number of countries.
This phenomenon can occur when the system is overly complex and people are
therefore unaware of their rights and eligibility or lack the skills to make the
claim. It can also result from poor administration, where authorities fail to
inform claimants correctly, do not apply legal regulations consistently or
systematically refuse to award benefits. The lack of sufficient social workers
to support the application process can also play a role. Furthermore, nontake- up
can be a result of people subjectively thinking they do not need the support or
that, because they only need it for a short period, the time and efforts
involved in the application procedures are too high compared to the benefits.
People can also be discouraged by the sometimes discretionary nature of benefits
or the fear of being stigmatised. Many
experts found that minimum income payments in their country fall very far short
of lifting beneficiaries out of poverty. This is partly because they have been
set inadequately or have not kept up with wage increases due to a lack of clear
procedures for establishing and uprating payment levels. What’s more, the
priority given by most Member States to ensuring that MISs do not create disincentives
to take up work has often also contributed to lower levels of minimum income. Several
Member States have sought to make arrangements to address the problem of
disincentives to taking up work, namely by easing the transition into work by
tapering out benefits and/or topping up benefits to lift people out of in-work
poverty. The general trend to strengthen links between minimum income recipients
and activation measures, such as training programmes, was also viewed
relatively positively by experts. However, they also noted that such measures are
not always sufficiently targeted at or tailored to the needs of the most
vulnerable and that they vary widely in effectiveness. Many experts were
critical of the lack of specific links between MISs and the third strand of the
active inclusion agenda, ensuring access to quality services. Lastly,
experts noted that the financial and economic crisis and the resulting rise in
unemployment are beginning to take their toll on MISs in many countries.
Increasing numbers of people seeking support and growing financial strains on
national budgets have led to the curtailing of benefits uprating in some
countries. The crisis is also undermining efforts to link MISs with measures to
encourage return to work. In
light of this situation, the report makes sixteen suggestions for action at the
national and/or EU level to enable the minimum income strand of the
Commission’s October 2008 Recommendation on active inclusion to become a
reality. These cover the issues of adequacy, uprating, coverage, non-takeup, disincentives,
linking the 3 pillars of “active inclusion”, monitoring and reporting and the
economic and financial crisis. 1 See:
http://eur-lex.europa.eu/ LexUriServ/LexUriServ.do?uri=OJ:L:
2008:307:0011:0014:EN:PDF
