The legislative regulation implies developingand setting some quality standards of the exercised function and servicedelivered that requires the involvement of two tiers of government. Theresponsibility for funding can be split between administrative costs and thefunding of the social preference itself and, accordingly distributed across theRussian budget system tiers. In connection with this, the methodological roleof the federal social protection agencies should be strengthened. Theirmission should comprise the elaboration of a broad range of methodologies forthe targeted provision of social protection and rendering technical assistanceto regional social protection agencies in terms of practical application ofsuch methodologies, including their adjustment to local conditions. With suchan approach, the regions will have a chance to concentrate the funds primarilyon the protection of the most socially vulnerable groups of the populationbased upon the most efficient kinds of methodology of provision of socialsupport and social services developed and tested both in the given region andin other ones.
It would be expedient to assign to the localself-governance bodies the organization of the provision of social support as akind of service (collection of applications for social support, theirconsideration, registration, etc.) provided to the population, for by theirnature the said bodies are maximally close to the population. Sometimes, shouldflexible regulation methods be practiced in terms of division of powers, theprinciples of maximal efficiency and territorial matching can interlace:that especially concerns the division of competence between the regional andlocal authorities. However the federal authorities should grant the Subjects ofthe Federation with a right to set a concrete division of competence betweenthe regional and local authorities in the frame of a general scheme for thedivision of the expenditure mandate.
For each kind of social benefits therespective sources of funding should be fixed in the legislative documents,including the budgets of different levels, social insurance, and alternativesources. One should identify mechanisms for the transfer of a number ofbenefits from the budget funding to the area of social insurance. The advantageprovided by the compulsory collective insurance is that the insurancecontributions accumulated in a form of common funds become then redistributedin favor of those for whom the insurance event arises. That secures the safetyand support to the insured individual facing hardships, along with asimultaneous decrease of the need in budget funds. That is why the role andsignificance of social insurance (public and non-governmental alike) with theexpansion of the participation of insured individuals should beincreased.
Because of the above, as well as due to thefact that the current law does not stipulate the concept of “benefits”, andbecause of different interpretations of the provision of benefits in differentlegislative acts (state support, social protection, etc.) and the existence ofconfusing notions –subsidy, social payment, benefit, compensation,- it would be expedient todevelop a bill that would deal with defining the conceptual apparatus andregulating legal relations that relate to the provision of benefits ( naturaltransfers) to the citizens as per the law. Such a bill would constitute aconceptual basis, and t would determine a policy and main conditions forcancellation or provision of certain social benefits.
All the aforementioned suggestions wouldallow a future refusal from the social benefit as category in its currentform and to proceed to the targeted support of the needy. That would createsaved funds that partly might be spent on funding the social support. Atthis point, the sequence of actions becomes especially important, for any hastycancellation of benefits without introducing an adequate mechanism for theprovision of social support would be most painful for the least protectedsocial groups and may entail substantial problems that might be avoidedotherwise.
In addition, one should pay attention to thefact that the problem in question is mostly political rather thansocio-economic one. It is necessary to note that an implementation of measureson reforming the system of social benefits and privileges would require a greatdeal of preliminary work, an adoption of a whole range of legal acts onamending the current law, as well as new laws that would deal with theregulation of the changed situation in the social support area, and, above all,the application of political will and the work with the population to promotethe idea of the inefficiency of the current system of social benefits andpayments.
Lacking financial resources, the governmenthas to take into account its actual capacity in terms of implementation of itssocial policy and, primarily, to seek the prevention of any declarative andunfunded promises to the population. At present we reap the fruits of theabsence of a sound policy in the area of setting and delivering benefits.Whilst the government is incapable of delivering the social obligationspromised to the population, it tends to shift all the expenditure on thedelivery of social benefits provided to residents on the basis of the federallaw to organizations that produce certain kinds of goods and services andto local budgets.
Thus, until 2000 the expenditure onimplementation of benefits stipulated in the federal law “On veterans”would be taken into account in the calculations base in the course ofidentification of the amount of financial support of the Subjects of theFederation allocated from the Federal Fund for Financial Support of theSubjects of the Russian Federation. However, in 1998 enterprises and entitiesoperating in the sector for housing and communal services were reimbursedwith as much as 60% of the costs the budgets of different levels incurred toimplement some provisions of the said federal law, while the communicationcompanies on average were compensated with a. 10% of their non-received incomefor the provision of benefits. There was no reimbursement of the costs incurrednational air-companies in 1997 and 1998 to ensure the veterans’ right for a beneficial airtransportation fares, because the government had failed to set therespective procedures of reimbursement for such costs. That entailed thedecision made by some air-companies to stop providing their services tobeneficial categories of air passengers and, accordingly their illegalactions.
2.2 The ongoing and suggestedmeasures
Active efforts to reform the current systemof social benefits are undertaken by both the federal authorities, whosefunctions comprise the pursuance of a policy aimed at the development of publicconsumption sectors, and by a number of the Russian Subjects that experience asignificant pressure on their budgets that is related to carrying out unfundedfederal mandates.
In order to reform the current system ofbenefits, Deputy Chairman of the RF Government V.I. Matvienko on September 16,1999 approved the Action Plan on the stage-by stage transformation of thesocial benefits (subsides) set by the RF Government. The execution of the Planwas scheduled for 2 years. The Plan provided measures on reforming benefits interms of payments for housing and communal services, transportation fares byall kinds of transport, communication services, and the reforming of the‘beneficial’ provision of residents with medicines and relatedgoods.
In the course of implementation of the Plan,the list of social benefits and subsidies to various categories of residentswas prepared; a bill was drafted that provided the cancellation of benefits interms of payments for housing and communal services for all the beneficialcategories of residents, except veterans of the war and the groups of thepopulation equaled to them in terms of benefits they are entitled for. It wasintended to restructure the provision of the said benefits to veterans of thewar with account of the provision of benefits exclusively within the limits ofthe ‘social livingarea’ and communalservices consumption standards, as well as considering the provision ofbenefits to an individual person leaving alone or with the family and having aper capita income not exceeding the subsistence minimum level set in therespective Subject of the Federation.
The social protection of the population interms of payments for housing and communal services would be carried out incompliance with the RF law, in a form of providing compensations (subsidies)for paying for housing and communal services, as well as n a form of the publicsocial support. At the same time the RF Ministry of Labor and the RF Ministryof Construction suggested that the basic documents should be amended withprovisions designated for regulation of legal relations in the housing andcommunal area (to amend the Housing Code of RSFSR and the Federal Law“On fundamentals of the federal housing policy”.
The essence of the proposals was that thebenefits in terms of payments for housing and communal services set by thelegislative and other legal acts should be practiced within the limits of asocial standard of living area and communal services consumption standards. Theright for a subsidy (or a benefit) in terms of payments for housing andcommunal services should be correspondent to its recipient’s income per capita and tothe value of the subsistence minimum set in the respective Subject of theFederation.
Having considered the opinions expressed bythe federal executive power agencies, in 2000 the RF Government developed andadopted its Resolution “On procedures of funding at the expense of the federalbudget funds of expenditure related to the implementation of single provisionsof the federal laws ” On veterans” and “On social protection of disabled”. TheResolution stipulates the procedures of funding of the expenditures related tothe provision of benefits in terms of resort and sanatorium treatment of singlecategories of disabled persons – veterans, manufacturing and repair of prosthetic and orthopedicarticles for disabled, providing invalids of the war with transportation meansand compensations for transportation services instead of their receipt of avehicle. The Resolution regulates relationships between the social protectionagencies and the RF Ministry of Finance and introduces the responsibility ofevery link in the chain.
The work in this direction was conductedproceeding from the Plan of the RF Government in the area of social policy andeconomic modernization for 2000-2001. The contents of the declared measurescomprises plans of cancellation of socially unjustified benefits; to transformnatural benefits and payments set for single categories of civil servants,military and interior personnel into the form of wages and monetary allowance.It is also intended to gradually transform the remaining benefits for veteransof the war, disabled of the GPW, Heroes of the Soviet Union and Russia intotheir monetary equivalent.
The reforming of the social benefits systemrequires revision of a great number of federal legislative acts that form thebasis for the provision of benefits to the population. That is why it wasdecided in 2001, proceeding from the RF Subjects’ needs, to form the Fund forCompensations within the federal budget expenditure, to implement the federallaws “On veterans”, “On social protection of disabled in RF”, “On thegovernment subsidies to citizens with children”. It is proposed to use as asource for the formation of the Fund the projected revenues, as follows: 15% ofVAT on goods (works, services) produced in the RF territory that previouslywere due to be collected to the consolidated budgets of the RF Subjects. Theallocation of the Fund’s resources across the regions would be conducted regardless ofthe level of the regions’ budget sufficiency in proportion to the quantity of therespective groups of the population, with the account of regional factors thatincrease the budget expenditure.
The items below form the most “costly”benefits for the budgets of different levels of the budgetarysystem:
benefits in terms of payments for public transportservices;
payments for the services of the housing and communalsector;
benefits in terms of payments for communicationservices;
beneficial provision of medicines.
Let us consider possible ways of theirreforming
2.2.1 Reforming the benefits in terms ofpayments for housing and housing and communal services.
The benefits in terms of payments forhousing and housing and communal services should be reformed in conjunctionwith the housing reform in the part related to hosing subsidies. At present,the provision of the housing and communal benefits is carried out according tothe ’categorial’ principle, regardless of the material position of theirrecipients. In all there are 43 categories of residents (accounting for over60% of the total population) that enjoy the noted benefits. Notably enough, itoften happens that the source of the respective compensation for the benefitshas not been identified, and, because of that, the housing entities sufferlosses. In 1999, the respective compensations accounted for only 41% of thetotal amount costs incurred by housing and communal companies in conjunctionwith the services they provided to the ‘beneficial’ residents, while the main burdenof funding such costs fell on the local budgets. The compensation for theprovision of benefits in terms of payments for housing and communal services tothe biggest group of their recipients as per the federal law “On veterans” ismade at the expense of the RF Subjects’ budget funds. However, despitethe fact that the social protection of the Heroes of the Soviet Union andRussian Federation, Heroes of the Socialist Labor, full holders of the ordersof Glory and Labor Glory and members of their families should be ensured theexpense of the federal budget funds, de-facto the costs for the housing andcommunal benefits are compensated at the expense of the RF Subjects’ budget resources and those oflocal authorities.
The number of residents of the RF enjoyingthe housing and communal benefits (January to December 1999)
Proportion of costs of the housing and communal enterprisesrelated to the provision of services
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