Fighting poverty (?)Social Protection in AUSTRIA

EU-Grundtvig Project 19-22 Oct 2010

Caritas-MigrantInnenhilfe OÖMag.(FH) Mag. Brigitte Egartner

+43 (0)732 / 7610-2368brigitte.egartner@caritas-linz.at

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Overview

Facts & Figures

Structure of Social Protection Schemes

Universal schemesFamily allowanceChildcare benefit

Means-tested benefitsSocial AssistanceMeans-tested Guaranteed Minimum Income

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Facts & Figures• The percentage of population at risk of poverty shrinks from 43 %

before to 12,4 % after all social transfers and pensions.

• 1 Mio people at poverty-risk (< 951 Euros/mth), 500.000 (6%) in deprivation

• 250.000 children, 90.000 in deprivation=> every 4th at risk of poverty is under 20=> every 3rd child at risk of poverty has a migrational background

• Vulnerable groups:• Children (especially between 3 and 5 yrs)• Families with 3 or more children• Single parents• Migrants

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Structure of Social Protection Schemes (1)

=> Institutionally and legally seperated two-tier system

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Structure of Social Protection Schemes (2)

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Universal schemes• In general high percentage of cash benefits, but in terms of anti-

poverty-measures the following public services should also be taken into account:

• education system (cost-free but still very selective; visious circle)

• youth welfare system (preventive and interventive measures)• child-care facilities (obligatory but cost-free kindergarten year)

• high percentage of universal transfers (16% of total cash benefits), but only 3% of all cash-benefits are means-tested => lack of transfers for special groups at risk

• Universal family transfers (family allowance, childcare benefit)

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Family allowance

• < 3 yrs: 163,80 Euros• 3-10 yrs: 171,10 Euros• 10-19 yrs: 189,30 Euros• > 19 yrs: 211,10 Euros

• Additional payments for 2nd, 3rd and 4th/5th/6th…child

• Double pays 4 times/years

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Childcare benefit

• Until 2002 social insurance based entitelment

• Since then universal transfer with elements of means-test because restricts access for higher income parents (> 16.200 Euros/year) => also some element of general means-test!

• Different options: shorter periods of receipt lead to a higher monthly benefit. New income-based model introduced in 2010 (1 yr, 80% of last income)

• Top-up payments for low-income families (181 Euros/mth)

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Means-tested benefits

• Equalisation supplements in the pension system (top up payment for all pensioners at the equalisation supplement reference rate, currently 744 / 1.116 Euros), 10 % of all pensioners

• Income-tested unemployment assistance (Notstandshilfe) after 6 or 12 months of unemployment benefit depending of the family income

• Grants to pupils and students of low income families

• Social assistance

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Social assistance (1)• Main instrument to support people in need

• Principle of subisidarity: support only in cases where…• he or she doesn‘t receive enough payments out of

insurcances (=> top-up payments!), • has no claims on third parties (=> ex-spouses) and • cannot be assisted through family ties (=> recourse liability!)

• Conditionality:• make use of his or her means and abilities • willing to work => no guaranted minimum income for children

(dependent on how their parents‘ willingness to work)

• Principle of individuality

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Social assistance (2)

• Federal structure of Austria => 9 different regulations since the 1970s, frequent amendments

• Differing rates and various additional payments (clothing, heating, rent,…)

• Current rates for Upper Austria (full rates or top-up payments):• Single assisted person: 577,50 Euros• Main assisted person: 521,70 Euros• Co-assisted person without family allowance: 340,30 Euro• Co-assisted person with family allowance: 162 Euros

=> Rates do not reach poverty-risk treshold as defined by EU-SILC!

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Means-tested Guaranteed Minimum Income• For 2011 transformation towards a MGMI planned, but draft law for

Upper Austria still missing. Basic agreement on national level contains several major changes:

• Guaranteed national minimum income of 744 / 1.116 Euros will replace the currently nine rates of the provinces (=> harmonisation of regulations, avoiding poverty and exclusion)

• Job centers will serve as entry point for social assistance recipients categorised as fit for work (=> fostering employment)

• Recourse liability limited (=> reducing stigmatisation and increasing take-up rate)

=> No basic income but national income provision that still imposes certain conditionality on claimants