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InGRID Expert Seminar on Minimum Income Protection in Europe
Antwerp, 25-27.11.2015
Paper
“The development of national MIS under economic adjustment programmes –
Ambiguous lessons from Greece and Cyprus”
Prof. Dr. Gabriel Amitsis
Athens Technology University/ ASAP Greece
1
The author
Gabriel Amitsis is Associate Professor of Social Security Law in the Department of Business Administration (Unit of Health and Welfare Management) at the Technology University of Athens. He has undertaken research and teaching at the Greek Open University, the Athens National School of Public Administration and the Nicosia University in areas relating to EU and comparative employment, social security and inclusion policies. He is the Coordinator of the Greek Chapter of the Academics Stand Against Poverty Network.
He was appointed the Coordinator of the Green Paper on the National Social Inclusion Strategy (2013) and the key author of the Strategy (2014), while is the Coordinator of the Greek Strategy framework to tackle homelessness (2015-2016).
2
The national context
The development of sound minimum income schemes (MIS) for persons at high risk of poverty and social exclusion constitutes a key challenge for the Greek and Cypriot welfare regimes in the context of the sharp financial crisis that affects Greece and Cyprus. However, it does not represent a major policy issue in the debate on the reform of traditional employment and social security schemes, although it may affect a broad range of interested target groups (unemployment claimants, long term unemployed, welfare claimants, people excluded from current categorical minimum income schemes) during austerity times.
3
The Troika effect
The introduction of a national MIS is among the “social clauses” of the Troika Stabilization Programmes for both countries, given that it was clearly emphasised in the Third (2015) Stability Programme for Greece and the First (2013) Stability Programme for Cyprus. A MIS scheme was introduced by national legislation in Cyprus (August 2014), while the Greek administration has completed a pilot implementation phase of a MIS scheme at 13 municipalities (November 2014 – April 2015) .
4
The GMI paradigm in Greece
5
Minimum income support for vulnerable groups in Greece
Lack of a general minimum income scheme for needy persons / absence of an institutional poverty line
Fifty seven categorical income support programs with different eligibility conditions, administration mechanisms and level of protection
The majority of poor people are excluded from state protection or receive marginal benefits, as:
the welfare benefit for long term unemployed = 200 € per month
the welfare benefit for poor unprotected children = 44 € per month
6
The basic typology of social security benefits in Greece (2013)
Type of benefit Number of recipients System providing benefit
Pension (old age/disability /death)
2.714.034 Social insurance (contributory)
Family welfare benefit 497.894 Social welfare (non contributory / means
tested)
Disability welfare benefits
193.804
Social welfare (non contributory / non
means tested)
Unemployment benefit 135.050 Social insurance (contributory)
Welfare benefit for old uninsured poor people
39.168 Social welfare (non contributory / means
tested)
Welfare benefit for poor unprotected children
23.436 Social welfare (non contributory / means
tested)
7
GMI in the First Economic Adjustment Programme
No reference to the introduction of a GMI scheme was found in the First Economic Adjustment Programme. It was launched in May 2010 (http://ec.europa.eu/economy_finance/publications/occasional_paper/2010/pdf/ocp61_en.pdf) and committed a loan package of € 110 billion, subject to the strict clauses laid down in the First Memorandum of Economic and Financial Policies.
8
GMI in the Second Economic Adjustment Programme
The pilot implementation of a GMI scheme was among the “social clauses” of the Second Economic Adjustment Programme. It was agreed in March 2012 (http://ec.europa.eu/economy_finance/publications/occasional_paper/2012/pdf/ocp94_en.pdf), and committed a loan package of € 130 billion, subject to the Second Memoranda of Economic and Financial Policies (MEFP) and Understanding on Economic Policy Conditionality (MoU).
9
The need for reform
“Greece’s level of social spending (as a share of GDP) remains
well above the euro area average. We will thus continue to reform social benefit programs and the governance of social assistance and social security programs. As an upfront measure, we will improve the targeting of the family allowances by excluding high income earners. Drawing on external assistance, we will also undertake a thorough review of social spending programs with the aim to identify 1½ percent of GDP in additional measures to be taken over 2013-14. The review, to be completed by end-June 2012, will identify programs to be discontinued, and opportunities to rationalize and strengthen core social programs to better support individuals in need, while reducing transfers to individuals who do not require them” (Second Memorandum of Economic and Financial Policies, March 2012)
10
The real scope of the reform
Implementation Measure due to July 2012:
“Government to complete the reviews of social spending programs to identify 1 percent of GDP in savings, while at the same time making proposals to strengthen core safety net programs”
(Second Memorandum of Economic and Financial Policies, March 2012)
11
The reform mechanisms “In order to prepare the measures that will be adopted with the 2013 and 2014 budgets and contribute to meet the fiscal targets, the Government initiates, before end-February 2012, a review of public spending programmes. This review should be completed by June 2012. The review will draw on external technical assistance and will focus on pensions and social transfers (in a manner that will preserve basic social protection)”
(Second Memorandum of Understanding on Economic Policy Conditionality, March 2012)
12
The first ambiguous message
“Given the poor targeting of social programmes, there is quite
some scope to generate additional savings in this area, while, at the same time, more effectively protecting the most vulnerable. So far, social policies in Greece seem to lack a stringent strategy on how to target those parts of society that are truly in need of government assistance. In particular, while a wide-range of social benefits are allocated without means-testing to particular groups of society which are not subject to acute social hardship, certain groups of households at the lower end of the income distribution remain unprotected and are subject to pronounced poverty risks. The OECD review under preparation is expected to highlight areas where there is room for significant efficiency gains and savings can be generated, while improving social fairness of the respective policies” (European Commission, The Second Economic Adjustment Programme for Greece, Occasional Paper 94/2012, European Economy, March 2012, p. 36)
13
The OECD review
The Ministry of Labour, Social Insurance and Welfare asked December 2010 OECD to help the Greek Government define reforms to improve the effectiveness, efficiency and fairness of selected social programmes. The OECD received a mandate to establish a well-balanced analytical perspective of the current situation, including the construction of a database, in order to identify gaps and overlaps in social protection, and highlight areas where there is room for significant efficiency gains.
The OECD review was delivered in the second semester of 2012; it presented different reform options about GMIs and activation policies.
14
While expectations arise…
“The rationalisation of social benefits (other than pensions) is expected to deliver savings for about EUR 300 million (0.2% of GDP) over 2013-14. The measures adopted are aimed at improving the targeting and actual impact of social benefits on lower-income households, in line with the recommendations delivered by the technical assistance partners (OECD). The measures strengthen the requirements to receive social assistance while improving their targeting to the most vulnerable sectors of society. The package includes also the introduction of two new social programmes aimed at cushioning the impact of high unemployment rates and contraction in disposable income on the population.”
(European Commission, The Second Economic Adjustment Programme for Greece – First Review, Occasional Paper 123/2012, European Economy, December 2012, p. 27)
15
The agenda of the new social programmes…
A. Introduction of a benefit equal to €200 per month payable for up to 12 months to long-term unemployed who exhaust the full length of the unemployment benefit (12 months), provided they do not qualify for other training schemes and have family taxable income up to €10,000 (capped at 35 million);
B. Introduction of a Minimum Income Guarantee scheme applied in two pilot areas of the country with different socioeconomic profiles (capped at €20 million)
16
The legal establishment of the GMI pilot action
The implementation of the GMI pilot phase was regulated by art. 1 of the Law No. 4093/2012 (adopted in November 2012) and the Ministerial Decision No. 39892/7.11.2014 (a 24 months preparation period!!!), which set key operational and administrative guidelines.
Beneficiaries were persons:
residing in 13 Municipalities, selected by the Ministry of Labour, Social Insurance and Welfare;
at risk of extreme poverty.
17
Personal scope of application
Eligible persons are permanent legal residents of Greece - at least for six months before the application - who belong in one of the following categories:
• Greek citizens;
• EU citizens;
• third country nationals, who are long-term (at least five years) residents according to the Migration Law;
• recognized refugees;
• asylum seekers.
18
Main eligibility conditions
• The claimant should be a permanent resident in the selected Municipality.
• His/her annual income is below €2.400, increased by €1.200 per annum for each additional adult, plus €600 per annum for each child; in the case of single-parent families, the eligibility threshold for the first child is increased by €1.200 per annum.
• He/she does not own a real estate, either himself/herself and/or any other member of the family, which exceed 90.000 € at current prices, increased by €15.000 for each additional dependent adult, plus €10.000 for each dependent minor, subject to an overall ceiling per assessment unit of €200.000.
19
Main benefits
• The main benefit of the GMI Scheme is the so called basic allowance, a monthly non-contributory cash grant (payable up to 6 months), whose rate depends on the difference between the actual resources of the applicant and the guaranteed subsistence level (as determined by the relevant legislation).
• The GMI monthly rate was set to 2o0 € per person. In a household, the person`s spouse will receive an additional amount of the allowance (100 €), while if the family has dependent children aged below 14 years, it will receive an additional amount of the allowance (50 €) for each child.
20
National policy initiatives in favour of a full GMI implementation
After the adoption of the Second Economic Adjustment Programme (March 2012), the Coalition Government (in power since June 2012) put forward the need of a national driven welfare reform agenda with the aim to address the lack of a sound social inclusion system. This process was initiated by the Ministry of Labour, Social Insurance & Welfare and led to the compilation of the Green Paper on the National Strategy for Social Inclusion in September 2013.
The Green Paper introduced a new institutional and operational framework for the design and implementation of active inclusion policies: adequate income support; inclusive labour markets; access to quality services. Although the Green Paper was not eventually presented for public consultation, it was endorsed by the government.
21
The GMI option in the Green Paper
The Green Paper recommended a radical reform of the welfare income support programmes, through the establishment of a coordinated set of means tested schemes that include:
1. A General Minimum Income scheme for persons aged 18-64 years with no working ability or low activation potential;
2. An “Active” Minimum Income scheme for people with working capacity but excluded from the labour market;
3. A Minimum Income scheme for minors living without parents and, therefore, without access to the GMI scheme;
4. A Minimum Income scheme for uninsured elderly people.
22
And the Troika responds -1
“The Government will produce a Green Paper on social protection and policy with a view to increase the effectiveness of income support programmes by September 2013” (European Commission, The Second Economic Adjustment Programme for Greece – Third Review, Occasional Paper 159/2013, European Economy, July 2013, p. 172)
The scope of the Green Paper project was obviously misunderstood by the Troika. It focused on an overall reform of the fragmented social welfare sector (that includes not only income support programmes but also social care, benefits in kind and activation programmes).
23
And the Troika responds -2
“The Green Paper has been presented and submitted to
EC/ECB/IMF. Α Steering Committee has been established under S.G. of M.o.L.; EC/ECB/IMF are not satisfied with the result mainly because of lack of costing of the whole project. M.o.L. contacted prof. Amitsis in order to add quantitive data to the study and present it to EC/ECB/IMF”.
(European Commission, The Second Economic Adjustment Programme for Greece – Fourth Review, Occasional Paper 192/2014, European Economy, April 2014, p. 107)
This a second serious misunderstanding on the part of the Troika. Green Papers - by definition - identify reform needs, set reform priorities and present relevant policy scenarios open for public discussion. They do not offer “one size fits all” solutions.
24
The GMI journey begins… “The Greek authorities are also seeking ways to improve social safety nets to support the jobless and the needy. A guaranteed minimum income scheme, means tested and targeted to the poor, will be launched on a pilot basis, in parts of the country by January 2014 and progressively rolled out more widely as of 2015. The development of an unemployment assistance scheme for the long-term unemployed, means tested and targeted to the poor as well, is also being considered. Moreover, the authorities are expected to elaborate on the linkages between these schemes and public works programmes mentioned above and other labour policies, the activation of beneficiaries, and other social transfers. The front-loading of these income support initiatives shall be considered once they are designed and to the extent that the fiscal space is found within the existing budgetary envelopes”. (European Commission, The Second Economic Adjustment Programme for Greece – Third Review, Occasional Paper 159/2013, European Economy, July 2013, p. 39)
25
The scope
“The Government will launch a means-tested income support scheme (minimum guaranteed income scheme) that targets the poor, including the long-term unemployed, to mitigate poverty and prevent the deterioration of skills and human capital (pilot phase by January 2014 at the latest and national roll-out by 2015). The pilot phase will enable the development and testing of targeting mechanisms, registration procedures and benefits platform, delivery channels and payment systems with adequate control procedures. The pilot programme will include some activation of beneficiaries; and there will be phased integration of other benefits and social services”. (European Commission, The Second Economic Adjustment Programme for Greece – Third Review, Occasional Paper 159/2013, European Economy, July 2013, p. 172)
26
The GMI journey continues…
“Improving social safety nets is an urgent policy priority. Greece has been historically a country with a welfare system quite limited in scope. Faced with the current major challenges, there is now growing awareness in the country that the current welfare system urgently needs a major overhaul to better support both transitions across jobs and the needy. Indeed, strengthening the welfare system and improving social safety nets within the current budgetary envelopes by increasing effectiveness and efficiency of welfare spending are urgently needed to create a fiscally sustainable, integrated and cost effective welfare system in Greece”
(European Commission, The Second Economic Adjustment Programme for Greece – Fourth Review, Occasional Paper 192/2014, European Economy, April 2014, p. 50)
27
The implementation of the GMI pilot action
The World Bank was contracted by the Ministry of Labour, Social Insurance and Welfare (November 2013) to provide technical support during the design and implementation of the GMI pilot action. Key position papers were delivered, with the aim to:
setting out the timetable and roadmap for the national rollout;
identify pilot geographical areas and targeted population;
present budgetary provisions;
describe the institutional framework including registry.
28
Preliminary results of the GMI pilot action
1. The pilot implementation of the GMI was applied in 13 municipalities (November 2014 – April 2015) to test their capacity and accessibility in bringing the programme to its beneficiaries at the local level.
2. Only the income support pillar was activated due to administrative and financial constraints.
3. 17.500 claimants received relevant cash benefits.
29
The evaluation of the GMI pilot action
A process evaluation would be carried out by the World Bank of the operation of the means-tested income support program. This would include a review of how all the basic procedures have been implemented in practice at both the municipalities and central level and the extent to which actual performance has been consistent with plans, and if not, explore the reasons for deviations. The process evaluation would include a review of the existing regulations relating to the means-tested income support program and identify areas for improvement.
30
The GMI option within the National Social Inclusion Strategy (NSIS)
Taking into account the recommendations of the Green Paper, the Ministry of Labour, Social Insurance & Welfare produced a new framework of principles, priorities and targets for active inclusion policies. This framework took the form of the National Strategy for Social Inclusion (NSSI), following a consultation process with key stakeholders and target groups during December 2014. The European Commission welcomed this initiative and affirmed, in January 2015 (three days before the general elections!!!), that the Strategy fulfilled the relevant ex-ante conditionality for the release of ESF resources in Greece (Thematic Objective 9 “Policies against poverty and social exclusion / Community Support Framework 2014 – 2020).
€
31
Global policy inspirations for the new Strategy
• UN Millennium Development Goals: A Compact among Nations to End Human Poverty, 2000
• ILO Social Protection Floors Recommendation, 2012
• The Revised European Social Charter, Council of
Europe, 1996 • The Poverty Reduction Strategy Initiative, Word Bank
and the International Monetary Fund, 1999 • The Poverty and Social Impact Analysis, Word Bank,
2002
32
The E.U. framework
Council Recommendation on common criteria concerning sufficient resources and social assistance in social protection systems, 92/441, ΕΕ L 245/26.8.1992
Commission Communication on the active inclusion of people excluded from the labour market, 17.10.2007, COM(2007) 620
Commission Communication on a Commission Recommendation on the active inclusion of people excluded from the labour market, 3.10.2008, COM(2008) 369
Commission Recommendation 2008 on the active inclusion of people excluded from the labour market, COM(2008) 369 final
European Parliament, The role of minimum income in combating poverty and promoting an inclusive society in Europe, Resolution of 20 October 2010, Brussels
Commission Communication on “The European Platform Against Poverty and Social Exclusion - A European Framework for Social and Territorial Cohesion”‚ COM(2010) 758
Commission Communication, Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020, COM (2013) 83/20.2.2013
Council Recommendation, Investing in Children, C(2013) 778
33
The European model for inclusion policies
(A) Member States are advised to prepare national strategies combining: integrated and comprehensive design / integrated implementation / vertical coordination / active participation of all relevant stakeholders
(B) National strategies should focus (at least) on three basic strands:
• Adequate Income Support (through targeted benefits only for people without adequate resources and irrespectively of their working ability)
• Inclusive Labour Markets (through activation services only for those with working ability)
• Access to Quality Services (through personalized services adapted to specific needs ex. psychological and social support, child care, care for elderly and disabled, health care, rehabilitation etc.)
(C) National strategies should regard prevention as an investment priority (investing on services combating factors that can generate or reproduce exclusion causing multiple social problems in the future ex. school drop out)
34
The Key implementation instruments
Instruments Aim
1. Regulatory introduction of a subsistence level (uniform, horizontal and legally recognized) 2. Activation techniques (for income support recipients with working ability)
3. Social innovation techniques (in the provision of social care and activation services)
4. National Quality Framework for Basic Social Care Services
1. Social justice and viability of interventions 2. Empowerment of vulnerable unemployed
3. Mobilization of the third sector’s resources in fields where service provision by the state is either inexistent or inadequate 4. Minimum quality standards regulating cooperation between public and private (profit or non for profit) sector
35
Eligibility conditions
Profile Population groups concerned
Financial need in income terms
(the “need” principle)
Inability to cover need through other social protection systemw - mainly social insurance
(the “subsidiarity” principle)
Exclusion from the labour market due to age, health condition, disability or long term unemployment
(the “subsidiarity” principle)
Poor elderly people excluded from social insurance pensions
Poor uninsured children without parents
Poor uninsured adults with no working capacity (disabled / mentally ill)
Poor long term unemployed excluded from social insurance unemployment benefits
36
Groups outside the scope of the Strategy
Profile Population groups
(a) Social insurance beneficiaries Social insurance coverage Inadequacy of income
due to the low level of benefits / pensions
(b) Employed adults Participation in the
labour market Inadequacy of income
due to low level of wages or low level of self-employment income
Adults receiving low pension for old age / disability / death (lowest pensions at 360 Euros / month)
Insured unemployed receiving the regular unemployment benefit (standard benefit at 360 Euros / month)
Low wage employees and mainly part timers (minimum salary for full employment at 586 Euros)
People with very low income from self employment
37
The socio – political pillars of the Strategy
• PILLAR A. Combatting Poverty
• PILLAR B. Access to Services
• PILLAR C. Inclusive Labour Market
38
The Operational Axes
Operational Axe Pillars
AXE 1. Combatting extreme poverty
AXE 2. Preventing and combatting child poverty
AXE 3. Promoting inclusion of vulnerable groups
AXE 4. Good governance of inclusion policies
PILLARS 1 / 2
PILLARS 1 / 2.
PILLARS 1 /2 / 3
39
The architecture of the 1st Axe – Combatting Extreme Poverty (1)
Priority 1.1 Access to basic goods
Measure 1.1.1 – Access to basic subsistence means
Measure 1.1.2 – Access to basic health care
Measure 1.1.3 – Protection in case of crisis
Measure 1.1.4 – Access to adequate housing
Measure 1.1.5 – Access to electric power
Measure 1.1.6 – Access to financial services
Measure 1.1.7 – Access to Justice
Measure 1.1.8 – Access to cultural and recreational activities
40
The architecture of the 1st Axe – Combatting Extreme Poverty(2)
Priority 1.2 Access to adequate resources
Measure 1.2.1 – Pilot implementation of a General Minimum Income Scheme
Measure 1.2.2 – Establishment of a General Minimum Income Scheme
Measure 1.2.3 – Coverage of needs in fuel through special cash benefit
41
The regulatory development
Framework – Law on the National Social Inclusion System
Framework – Law on the National System of Protection Against Unemployment
aiming at: Defining basic principles and setting minimum
standards (subsistence level, minimum levels of basic services etc.)
Recognizing a legal right to a basic set of specific benefits and services for every person in need not covered by social insurance
Establishing basic coordination and monitoring mechanisms for public inclusion policies
Establishing standard procedures and techniques for the active management of unemployment
Establishing mechanisms enabling the systemic cooperation and networking between public and private sector in the field of social care and activation services
42
GMI in the Third Economic Adjustment Programme
On 19 August 2015, the European Commission signed – on a request by the Greek government, after expiration of the country’s Second Programme on 30 June - a Memorandum of Understanding (MoU) with Greece following approval by the ESM Board of Governors for further stability support accompanied by a Third Economic Adjustment Programme. This paves the way for mobilising up to €86 billion in financial assistance to Greece over three years (2015-2018). Moreover, the Greek authorities signed a Financial Assistance Facility Agreement with the ESM to specify the financial terms of the loan.
43
The policy context “A fairer society will require that Greece
improves the design of its welfare system, so that there is a genuine social safety net which targets scarce resources at those who need it most. The authorities plan to benefit from available technical assistance from international organisations on measures to provide access to health care for all (including the uninsured) and to roll out a basic social safety net in the form of a Guaranteed Minimum Income”. (August 2015 MOU, p. 4)
44
Key commitment No. 1 The government commits as a prior action to agree the terms of reference and launch a comprehensive Social Welfare Review, including both cash and in-kind benefits, tax benefits, social security and other social benefits, across the general government, with the assistance of the World Bank, with first operational results to be completed by December 2015, targeted to generate savings of ½ percent of GDP annually which will serve as the basis for the redesign of a targeted welfare system, including the fiscally-neutral gradual national roll-out of the GMI. The overall design of the GMI will also be agreed with the institutions.
45
Key commitment No. 2
The Authorities by September 2015 will set out their detailed preparations for a gradual nationwide roll-out of a Guaranteed Minimum Income (GMI) scheme from 1 April 2016, including for the set up of a benefits registry and a strategy to ensure the inclusion of vulnerable groups and to avoid fraud. Close linkages with municipalities and employment services will be established.
46
Key commitment No. 3
By January 2016, the authorities will propose and legislate reforms to welfare benefits and decide on the benefit rates of the initial GMI rollout in agreement with the institutions. The design of the GMI will be closely based upon the parameters of the pilot schemes after the evaluation of the World Bank, with potential additional targeting of priority needs in the short-term in order to meet budgetary constraints.
By September 2016, the authorities will establish an institutional benefits framework to manage, monitor and control the GMI and other benefits. An evaluation of the performance of the GMI scheme will take place, with the objective of a full national rollout (key deliverable) by the end 2016.
47
The GMI paradigm in Cyprus
48
Minimum income support for vulnerable groups in Cyprus
A Public Relief Scheme was introduced in 1975 by the Public Benefits and Services Law (Law No. 10/1975), modified during the 90΄s (Law No. 8/1991) and regulated by the Law No. 95/2006 “Public Benefit and Services Scheme”.
The scope of this Scheme is to guarantee decent living standards through the provision of financial assistance and /or social services to persons whose resources are not sufficient to meet their basic and special needs as determined by the relevant legislation. Basic needs include food, essential clothing and footwear, electricity, water supply, hygienic living conditions and pocket money allowance. Special needs include rent, equipment, special diet, allowance for nappies, disability allowance, as well as allowances for home care, day care and residential care.
49
GMI in the Economic Adjustment Programme
A GMI clause was included in the Economic Adjustment Programme, launched in April 2013 (ec.europa.eu/economy_finance/publications), and committed a loan package of € 10 billion, subject to the Memoranda of Economic and Financial Policies (MEFP) and Understanding on Economic Policy Conditionality (MoU):
“The increase in unemployment underlines the need for an overall
assessment of activation policies and available instruments for income support after the expiration of unemployment insurance benefits. The planned reform of public assistance should ensure that social assistance serves as a safety net to ensure a minimum income for those unable to support a basic standard of living, while safeguarding incentives to take up work, ensuring consistency with the reform of the welfare system” (MoU, p. 25).
50
The legal establishment of the GMI scheme
The Government decided the introduction of a GMI scheme in mid-2014 to replace the Public Relief Scheme and other non-contributory social benefits. The GMI was adopted by Law No. 109/2014 that passed before the Parliament in 10.7.2014 (with 34 votes in favour and 20 abstentions).
The GMI is supported by active labour market programmes (ALMP), which are scaled up in order to reinforce work incentives and enhance the labour market prospects of various unemployed groups.
51
Personal scope of application
Eligible persons are permanent legal residents of Cyprus - at least for five years before the application - who belong in one of the following categories:
• Cypriot citizens;
• EU citizens;
• third country nationals, awarded the status of third-country nationals who are long-term residents according to the Aliens and Migrants Law;
• recognized refugees (asylum seekers are not eligible);
• victims of trafficking.
52
Eligibility conditions
• The claimant should be over 28 years.
• His/her income is below the amount specified for the family’s needs (The minimum living requirement to the final amount that each family will receive depends on the composition and size of household. As dependent family members are defined the unmarried children up to the age of 28).
• He/she does not own a real estate, either himself/herself and/or any other member of the family, which exceed 100.000 € at current prices.
• He/she does not own any financial assets, either he/she or any member of his family and the amount his/her deposits not exceeding 5.000 €, increased by 1.000 € for each additional family member.
53
GMI main benefits
• The main benefit of the GMI Scheme is the so called basic allowance, a monthly non-contributory cash grant, whose rate depends on the difference between the actual resources of the applicant and the guaranteed subsistence level (as determined by the relevant legislation).
• The GMI monthly rate is set to 480 € per person. In a household, the person`s spouse will receive an additional 50% of the allowance (240 €), while if the family has children aged below 14 years, it will receive an additional 30% of the allowance (144 €). The additional allowance increases to 50% in case the children are above 14 years of age (€240).
• In case of a disabled beneficiary, an additional monthly benefit of 226 € is paid.
54
GMI supplementary benefits
• A lump sum grant may be provided - by a discretionary decision of the Minister of Labour and Social Insurance - to a person who does not meet the eligibility criteria for the basic allowance but is in urgent need as a result of special personal circumstances or an unexpected or emergency situation.
• The GMI will also cover the rent of a family, or the interest rates that are equivalent to the rent.
• People who work part-time with very low income are entitled for the very first time to apply for welfare support.
55
Concluding remarks for Greece
After five years in the Economic Adjustment Programmes’ regime, Greece remains one of the very few EU Member States without a national GMI scheme. This has severe implications for persons at high risk of poverty and social exclusion during austerity times.
Although national based initiatives (i.e. the Green Paper and the National Social Inclusion Strategy) set the establishment of a GMI scheme as a key social cohesion priority, no real progress has been achieved so far. The pilot implementation has not received any significant public attention, while it has not led to a serious welfare reform initiative yet.
56
Concluding remarks for Greece - 2 Troika’s approach so far focuses exclusively on budgetary constraints and social spending surveillance. It does not follow a rights or a capabilities based strategy towards the introduction of a comprehensive social safety net.
The rationale behind a fiscally-neutral gradual national roll-out of the GMI is controversial and creates a serious welfare paradox. While welfare needs of the population in Greece arise, welfare policies are subject to external fiscal considerations that lead unavoidably to lack of protection. This is not compatible with the European active inclusion discourse, as promoted by EU institutions and many Member States.
National authorities have no space for political leadership of the GMI implementation. All decisions should be negotiated and agreed with the donors.
57
Concluding remarks for Cyprus
It took Cyprus only 18 months after its entry to the Economic Adjustment Programme’s regime to establish a national GMI scheme. Contrary to Greece, no technical assistance from International Organizations (i.e. the World Bank and the OECD) was delivered to the Cypriot Government.
The Ministry of Labour and Social Insurance was responsible for the design of the new scheme, strongly backed up by the President of the Cypriot Republic and the Minister of Finance. Competences and responsibilities related to the administration and provision of all social benefits were transferred to the Ministry of Labour and Social Insurance, which was appropriately equipped in terms of financial and human resources, reassigned from other departments of the public administration.
The Cypriot GMI paradigm is compatible with the values and the objectives of the European active inclusion discourse.
58
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