September 11, 2006Draft for comments

Program Implementation Matters for Targeting Performance:Evidence and Lessons from Eastern and Central Europe

Country Study:

Lithuania

ByLaimute Zalimiene1

1 The first version of this paper was written by Laimute Zalimiene. This version was edited and updated by Luisa Fernandez Consultant of the World Bank. Comments and suggestions are welcome to lfernandez@cable.net.co The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors and should not be attributed in any manner to the Work Bank, to its affiliated organizations or to members of its Board of Directors or the countries that they represent.

Acronyms and Abbreviations

HH HouseholdLCSA Law on Cash Social Assistance to Low-Income Families (Single

Individuals);LTL Lithuanian LitasMOF Ministry of FinanceMSSL Ministry of Social Security and Labor MT Means TestedNA Not availableNEC Not enough cases

NGO Non-governmental organizationPMT Proxy Means TestPPP Purchasing Power ParitySA Social AssistanceSAU Social Assistance UnitSI Social InsuranceSBP Social Benefit ProgramUS$ USA dollarsWB World Bank

Exchange rates:

Years 1998 1999 2000 2001 2002 2003 2004 2005 2006US$ in LTL

4.0 - 4.0 4.0 3.7 3.3 2.7 2.6 2.9

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Contents

Executive Summary.............................................................................................................v1. Motivation of the Study..................................................................................................12. Country Context..............................................................................................................23. Role of SBP Program within the Social Protection Sector.............................................83.1. Legal framework ………………………………………………………………… .124. Design and Implementation Features of Social Assistance Programs..........................144.1. Objective of the program...........................................................................................144.2. Targeting Mechanism.................................................................................................144.2.1. Application Process................................................................................................154.2.2. Eligibility Criteria...................................................................................................184.2.3. Verification of Eligibility.......................................................................................214.2.4. Update and recertification process..........................................................................214.2.5. Appeals resolution..................................................................................................224.2.6. Information Campaigns..........................................................................................234.3. Benefits Formula and levels......................................................................................234.4. Management of the Program and Institutional Capacity...........................................234.4.1. Management of the Program..................................................................................234.4.2. Training...................................................................................................................264.4.3. Maintaining program applicants or beneficiaries database....................................274.4.4. Reforms and Institutional changes..........................................................................294.5. Financing the Programs and Payment’s Systems......................................................304.5.1. Financing................................................................................................................304.5.2. Payment Systems....................................................................................................315. Coverage and Targeting Outcomes of NE....................................................................325.1. Coverage....................................................................................................................325.2. Targeting outcomes and coverage ……………………………………………… .27 6. Total and Administrative Cost of SBP program …………………………………… 296.1. Total and administrative cost of SBP ………………………………………. … . 356.2. Total cost per beneficiary and registry ……………………………………… …. . 367. Graduation and Emancipation Policies.........................................................................368. Monitoring and Evaluation ………………………………………...………… 378.1. Verification and Audits (ex-post verification system) ……………………………..329. Summary Conclusions and Lessons Learned...............................................................38References..........................................................................................................................41

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Annexes, Tables and Charts

Annexes …… .………………………………………………………………………..43

TablesTable 1 – Coverage of Targeted (MT, PMT) Social Assistance…………………………..1Table 2 - Targeting Outcomes of Targeted (MT, PMT) Social Assistance……………….2Table 3 – Costs of Social Programs in ECA and LAC Countries………………………...4Table 4 - Targeting Methods, Outcomes and Cost of ECA and LAC countries………….5Table 5 - Coverage, Targeting and Adequacy of Social Protection System in Lithuania, 2003 ……………………………………………………………………………………… 6Table 6 - Country Context (2000-2005).............................................................................8Table 7 - Composition of the Social Protection Sector.......................................................9Table 8 – The state supported income in Lithuania, 2004 ..............................................10Table 9 - Comparison of the old and new schemmes of SA.............................................13Table 10 – Application process of SBP.............................................................................17Table 11 - Institutions involved in SBP.............................................................................24Table 12 - Program Targeting Outcomes, Lithuania LSMS 2000 (%)..............................34Table 13 - Total and Administrative Costs for SA Programs in Lithuania, ....................34Table 14. Cost Analysis of SBP Program, 2004……………………………………. ….35Table 15 - Estimated Total Program Cost and Registry Cost per Beneficiary………..…36

Boxes

Box 1 information flows...................................................................................................28Box 2 Procedure for planning funds for the next year.....................................................31

Charts

Chart 1. Cash social assistance for families and children in Lithuania.............................12Chart 2 Number of beneficiaries and expenses on SBP..................................................33

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Executive Summary

In 1990, Lithuania introduced an extensive formal social assistance system to ensure a minimum standard of living for all households. This system is made up of a number of separate programs, including categorical social assistance (i.e. universal child benefit but also a range of specific in-kind benefits for disabled, elderly and socially disadvantaged groups), means-tested free school meals and other allowances (e.g. housing and utility allowances) and a means-tested cash transfer program referred to as the Social Benefit Program (SBP). The total social assistance budget in 2005 was US$ 210.9 (LTL548.4 million), of which categorical social assistance accounted for 72 percent, school meals and allowances accounted for 11 percent and the Social Benefit Program accounted for 10 percent, compensations and lump sum payments accounted for 7 percent. These programs covered 934,000 individuals (27 percent of population), categorical social assistance covered 428,000 individuals, free meals covered 115,000 individuals and Social Benefit covered 54,100 individuals. This study is focused mainly on the Social Benefit Program (SBP).

By 2005, expenditure on SBP was US$ 20.3 (LTL52.8 million) with coverage of 54,100 beneficiaries. Prior to 2004, eligibility was based solely on an income means-test. However, underreporting of income made it an unreliable indicator of economic need and an additional eligibility criterion linked to the value of household assets, was introduced. As a result, both the budget and program coverage fell substantially, to US$ 25.9 (LTL69.4) million and 84,000 beneficiaries (about 2.4 percent of the population) in 2004. Also, prior to 2004, the program was financed fully from the central budget and included benefits for households that did not strictly meet the program eligibility criteria but were still deemed needy. Since 2004, the financing of this group of beneficiaries, which accounted for an average of 5 percent of beneficiary households, comes solely from municipality budgets. Budget allocations to municipalities, which are distributed on a quarterly basis, are based on the average for the last three years but also on other socio-economic information provided by the municipality.

To become a beneficiary a household must fill out a 13-page application form requiring information on family composition, employment status, and sources/levels of income and ownership of various forms of property. The application form and supporting documents are passed to a program officer during the interview process during which any missing documents are identified. Once the application process is complete, the program officer enters the information in an electronic database and crosschecks the reported information with a range of government databases. Where inconsistencies arise a program officer will undertake a home visit to verify the reported information and fill in a special home-visit form. Applicants are expected to be informed of the outcome within one month, and also receive a form indicating the reasons for rejection and information on the appeals process. Program benefits are typically transferred via banks, post-offices or program offices on presentation of accepted identification documents. All beneficiaries must reapply every three months and fill out a shorter application form (not containing asset information).

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To be eligible to receive program benefits family members must be permanent residents and the per capita income of the family over the last three months must be below US$ 52 (LTL135/month). In addition, the value of the household’s property should be less than a certain threshold by household size and place of residence set by the government. Any employed family members must have worked at least two-thirds of the standard working hours with wages not less then the national minimum wage. For those unemployed, there are some conditions to receive the subsidy: a) receive unemployment benefit, b) undertake training, c) participate in public works, d) register with a labor exchange, e) have little children at pre-school, f) check ups for pregnant women and g) studying for full-time student in general education school. Eligible households receive a cash transfer equal to 90 percent of the difference between the average household income and an official threshold, which since 1998 has been fixed at US$ 34 (LTL135 per capita per month). If a beneficiary fails to meet program conditions (e.g. to register with an employment agency or to take up recommended employment or training) or if the family is perceived as dysfunctional, cash transfers can be replaced with in-kind services.

By law, municipalities also receive an additional 4 percent of their budget to cover administrative costs. Of this budget, 20.3 percent is absorbed by program design, planning and outreach activities, 27.9 percent by activities related to screening applicants, 15.1 percent by the cost of distribution of benefits and 36.7 percent by monitoring and evaluation (including the maintenance of a program database).

A study based on national household survey data for 2000 showed that the program is very well targeted. As much as 60 percent of beneficiaries came from the poorest income quintile and 80 percent from the poorest two quintiles. Transfers were also substantial, equivalent to 40 percent of total household consumption for the poorest quintile. However, program coverage was very small, with only 4 percent of all households, and 11 percent of the poorest quintile, receiving benefits. Therefore, in spite of being very well targeted and the fact that transfers were a substantial proportion of the total income of beneficiaries, low coverage has diminished the poverty impact of the program. Presumably coverage has also decreased since 2004 and it is important to determine how the addition of an asset ownership threshold has affected program targeting.

The experience with the SBP suggests a number of lessons for similar programs in the region. Firstly, in economies where informal or casual earnings are an important component of household income, the difficulty in verifying reported earnings will eventually require the use of a broader set of eligibility conditions than just reported income. It is important that any additional indicators are verifiable and sufficiently correlated with economic status to improve program targeting. Secondly, in a growing economy, requiring regular recertification and linking eligibility with participation in the labor market not only helps to improve targeting outcomes but also facilitates households in pulling themselves out of poverty. Thirdly, in order to verify eligibility rules, sufficient resources are devoted to program implementation, e.g. having a clear and well understood application process supported by a program database. The database is maintained on a routine basis and capable of being integrated with other government databases. Fourthly, maintaining good targeting performance requires an effective

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ongoing monitoring and evaluation system with those responsible for screening applicants.

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1. Motivation of the Study

Analysis of social programs, their targeting performance and efficiency in reducing poverty has been a very important subject of attention for governments and academy. Studies show that implementation arrangements are very important for achieving good targeting performance.1 Also there is a variety of targeting methods and each country selects the targeting mechanism depending on the country context, type of programs, and goals in terms of targeting outcomes and coverage. This study aims to analyze a set of means tested programs in 6 countries of Europe and Central Asia (ECA) Region that have shown a good targeting performance. Lithuania with its means tested poverty reduction program – called Social Benefit Program (SBP), has been selected for this study based on its good targeting performance, as seen below. In this report for Lithuania, the main implementation features will be reviewed, looking at issues of coverage, targeting performance, administrative cost and targeting cost of the program.

In 2002-2003 the coverage of targeted social assistance programs (Means Test (MT) and Proxy Means Test (PMT))—measured as the population of the lowest quintile of the income distribution covered by the program—was low for a sample of European countries (See Table 1).2 Lithuania had low coverage in this sample (14 percent). The country with the highest coverage was Kyrgyzstan (34 percent), then Albania (28 percent) and Armenia (26 percent). Comparing coverage rates with some LAC countries, the coverage of ECA countries is low. For instance, the coverage of the poorest quintile for Social Assistance Programs in Chile is 69 percent, Colombia 45 percent, Mexico 38 percent and Brazil 34 percent (See Table 4).3

Table 1 - Coverage of Targeted (MT, PMT) Social Assistance

CountryQuintiles of pre-noncontributory transfersPoor 2 3 4 Rich Total

Albania 28 14 11 7 3 13Armenia 26 11 10 7 6 12Bulgaria 15 1 1 1 0 4Estonia 10 2 1 0 0 3Hungary 5 3 1 1 1 2Kyrgyzstan 34 25 13 7 3 16Lithuania 14 2 1 1 0 4Poland 9 2 1 1 0 3Romania 19 2 1 0 0 4Uzbekistan 3 2 2 1 1 2

Source: World Bank Staff estimations.

1 See for instance, Coady, Grosh and Hoddinott (2004) for a large number of programs all over the world and, Lindert, Skoufias, Shapiro (2006) for Latin American programs.2 The analysis of this chapter is based on coverage and targeting outcomes of the targeted means-tested and proxy-means-tested social assistance programs, not exclusively the SBP program. The SBP program outcomes will be reviewed on the following chapters.3 Lindert, Skoufias and Shapiro (2006).

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The targeting performance—measured as the percentage of benefits going to poorest quintile—is high for Lithuania compared with other countries in the region, Romania (85 percent), Bulgaria (83 percent), and Estonia (77 percent) (See Table 2). Comparing targeting performance with LAC countries, most ECA countries have higher targeting outcomes. Latin American Countries, for instance Costa Rica (56 percent), Brazil (38 percent), Colombia (33 percent), Argentina (32 percent) and Mexico (20 percent) have lower targeting outcomes.

Table 2 - Targeting Outcomes of Targeted (MT, PMT) Social Assistance

Country Quintiles of pre-noncontributory transfersPoor 2 3 4 Rich Total

Albania 43 23 17 12 5 100Armenia 43 19 16 11 10 100Bulgaria 83 4 7 3 3 100Estonia 77 14 5 2 2 100Hungary 44 25 12 9 10 100Kyrgyzstan 49 25 14 8 4 100Lithuania 80 8 8 2 1 100Poland 64 18 10 4 3 100Romania 85 10 3 1 1 100Uzbekistan 35 22 20 11 12 100Source: World Bank staff estimations

In terms of costs, Table 3 presents a comparison of registry, interview, administrative costs and cost transfer ratio among some ECA and LAC countries. All figures had been converted to PPP terms in order to make comparable analysis.4 There are differences among targeting methods used across countries. The ECA countries analyzed in this report and United States (USA) use Verified Means Test (VMT), Brazil uses Unverified Means Test (UMT) and the LAC countries included in the analysis use Proxy Means Test (PMT). Some countries use a combination of PMT and geographical targeting and others VMT plus workfare requirements (See Table 4).

In terms of targeting costs, it is hard to make comparison across countries, as the implementation arrangements vary much from country to country.5 There are great differences among annual program cost of registry per beneficiary. The registry costs are much higher for ECA countries and United States than LAC countries. LAC’s countries registry costs range from US$PPP 1-10, while ECA’s Countries and USA’s registry costs range from US$PPP 19 – 116. There are several factors that may explain the differences, including: a) The VMT method may be more expensive because of all the verification procedures, cross checking with other databases and institutions; b) although the

4 The purchasing power parity (PPP) conversion factor is the number of units of a country’s currency required to buy the same amount of goods and services in the domestic market as a US dollar would buy in the United States (World Bank, 2004b)5 This comparison does not include private costs which are significant in some countries. In some ECA countries applicants/beneficiaries need to go several times to social offices to apply, to update information, etc.

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application process is demand-driven, there are fixed cost of the program6 including all the institutional costs to keep updated the registry of beneficiaries; and c) the average salaries and qualifications of social workers are higher in ECA and USA than in LAC countries.7

The interview cost depends on the type of home visits performed. The great majority of the home visits carried out in the ECA countries analyzed on the sample, are for checking information already on the files. That takes less time than the interviews carried out by most LAC countries with PMT as targeting method. The interviews required for a PMT take more time because the surveyor needs to fill in information of many socioeconomic variables.8 In LAC countries home visits are generally used for identification and verification of household eligibility. This situation is reflected in the cost, and the interview cost is cheaper in Albania9 and Lithuania.10 The other ECA and LAC countries have similar costs between US$PPP 8 – 12. United States has the most expensive interview cost of VMT method and Chile for PMT method.

The total program (cash transfers) administrative costs are not much different among countries. These costs range from 6 to11 percent, except Brazil (2.6 percent). Lithuania has lower administrative cost (6.5 percent) than Albania (7.2 percent), Bulgaria (9.9 percent), Kyrgyz Republic (9.3 percent), USA (10 percent) and Colombia (10.5 percent) and higher than, Mexico (6 percent) and Brazil (2.6 percent). In SBP program the lion’s share of the administrative cost is for determining eligibility (23 percent) compared with Bulgaria (20.3 percent), and Kyrgyz Republic (13.2 percent). The cost transfer ratio11 at 6.9 for Lithuania is also lower than Albania’s (7.8 percent), Bulgaria’s (10.9) and Kyrgyz’s (10.3).12

6 The fixed costs include: national, regional or local offices, supplies, equipment, staff needed to manage and implement the program. 7 In Lithuania personnel’s qualifications, standards and discipline of work are quite high.8 The number of variables included in questionnaire varies by country, Colombia (70 variables), Mexico (more than 100 variables), Costa Rica (56 variables), Chile (50 variables). 9 Interviews are only to validate/verify information provided in the declaration and to get an assessment of the living condition.10 Interviews are made only when there are some inconsistencies or exceptional applicants.11 Calculated as administrative cost divided by transfers paid out.12 Taken from country case studies (2006).

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Table 3 – Costs of Social Programs in ECA and LAC Countries

CountriesAnnual program cost

of Registry per beneficiary2

US$PPP1

Interview Cost 3

US$PPP1Administrative

Cost (%)Cost Transfer

Ratio4

Albania 49 2.5 7.2 7.8Bulgaria 19.1 9.7 9.9 10.9Lithuania 22.4 2.1 6.5 6.9Kyrgyz Rep. 115.6 11.9 9.3 10.3USA 86 86 10.09 n.aChile 8.6 20 n.a n.aColombia5 1.4 8.1 10.56 11.76

Costa Rica5 9.9 11.6 n.a n.aMexico5 1.0 8.3 6.07 6.47

Brazil 1.8 11.4 2.68 2.78

1 PPP conversion factors used for 2002 are: Albania (44.5) Bulgaria (0.6), Lithuania (1.4), Kyrgyz (9.3), USA (1.0), Chile (288.7), Colombia (727.5), Costa Rica (173.8), Mexico (6.8), Brazil (1.0) 2 Includes the cost of verification of eligibility (time and resources spent in the moment of presentation of

application and posterior cross checking), home visits and maintenance of databases, all divided by number of beneficiaries.

3 Includes cost of home visits for verification of eligibility, divided by number of beneficiaries.4 Calculated as administrative cost divided by transfers paid out5 An average interview cost was calculated.6 Administrative Cost and Cost Transfer Ratio of Familias en Accion (Conditional Cash Transfer (CCT)

Program) 2000-2004 (Lindert, Skoufias and Shapiro, 2006).7 Administrative Cost and Cost Transfer Ratio of Oportunidades (Conditional Cash Transfer (CCT)

Program) 2003 (Lindert, Skoufias and Shapiro, 2006).8 Administrative cost and Cost Transfer Ratio of Bolsa Familia Program (CCT Program) 2005 (Lindert,

Skoufias and Shapiro, 2006).9 TANF program (Lindert, 2005).n.a: not availableSource: Author’s estimation. LAC countries information calculated based on Castaneda et. al. (2005).

Making a comparison among countries on targeting outcomes (Table 4), coverage and registry costs, the following conclusions can be derived:

a) The sample of ECA countries have better targeting outcomes, lower coverage rates and higher targeting costs than LAC countries.

b) United States has good targeting outcomes, medium coverage rate and the highest registry cost among the VMT method.

c) Low coverage rates are associated, with high exclusion errors, but as seen from the table with a high targeting cost is not an easy task to increase coverage.

d) The ECA countries may consider the option of devoting additional resources to increase coverage by using more outreach methods to complement the on demand applications following the experience of LAC countries.

e) There is a trade off between the objectives of increasing coverage of the poor and improve targeting performance and there is not a fixed rule on how to approach this. It depends on the program’s objectives in terms of poverty alleviation.

Table 4 - Targeting Methods, Outcomes and Cost of ECA and LAC countries

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Countries Targeting Method

Targeting Outcomes

First Quintile

CoverageFirst Quintile

Annual program cost of Registry per beneficiary

US$PPP5

Albania1 VMT + Work 43 28 49Bulgaria1 VMT 83 15 19.1Lithuania1 VMT + Work 80 14 22.4Kyrgyz Rep.1 VMT 49 34 115.6USA2 VMT + Work 66 52 86Chile3 PMT 28 69 8.6Colombia3 PMT+geographic 33 45 1.4Costa Rica PMT+geographic 564 n.a 9.9Mexico3 PMT+geographic 20 38 1.0Brazil3 UMT 38 34 1.81World Bank staff estimations.2 TANF Program, 1998 data. Coverage measured as a percentage of eligible families for 2000 (Lindert, 2005).3 Lindert, Skoufias and Shapiro (2006).4 CEN-CINAI Program, 1999 data (World Bank, 2002b).5 Figures taken from Table 3.

Social Protection System in Lithuania

The social protection system (social insurance plus social assistance) of Lithuania presents high coverage rates of benefits for a wide range of the population including poor households. Coverage of whole social protection system was about 77 percent of poorest quintile and 70 percent of the second quintile of population, in 2003 (See Table 5). Social assistance programs (MT and PM) are more limited and covered 14 percent of the poorest quintile and 2 percent of the second quintile. However, the targeting performance of the SP programs (especially pensions) has been not so good, with about 19 percent of benefits going to poorest quintile and 21 percent of benefits going to the second quintile of population. By contrast, the targeting performance of social assistance programs (MT and PMT) has been much better distributing about 80 percent of benefits to the poorest quintile and 8 percent to the second quintile of the population. In terms of the adequacy, the social protection benefits amounted to 70 percent of consumption of the poorest quintile and 57 percent of the second quintile. The social assistance programs (MT and PMT) amounted to 22 percent of consumption of the poorest quintile, and 9 percent of the second quintile of population.13

13 These estimations are aggregated and include in the item “targeted social assistance programs (MT and PMT)” more programs than SBP program.

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Table 5 - Coverage, Targeting and Adequacy of Social Protection System in Lithuania, 2003

Quintiles of pre-non-

contributory

transfers

Total SP

Benefits

Contributory SP benefits

Noncontributory SP benefits

Contributory

pensions

Unemployment benefits

Other social

insurance

Other pensio

ns

Family allowan

ces including CHA

Targeted (MT, PMT Social

assistance

Other Social assista

nce

Coverage1 77 42 54 35 4 15 9 37 14 152 70 52 31 46 4 14 3 19 2 123 60 46 24 40 3 15 3 13 1 114 52 43 16 37 2 13 1 8 1 75 42 31 17 27 2 8 2 6 0 10

Total 60 43 29 37 3 13 3 16 4 11

Targeting (Beneficiaries)1 26 20 38 19 28 23 50 45 76 272 23 24 22 25 27 22 16 23 12 213 20 22 17 22 19 22 16 15 6 204 17 20 11 20 14 20 8 10 3 135 14 14 12 15 12 12 9 8 2 19

Total 100 100 100 100 100 100 100 100 100 100

Targeting (Amounts)1 19 14 50 13 16 17 59 50 80 362 21 21 18 22 21 19 14 22 8 213 21 23 13 23 20 21 12 14 8 154 22 24 8 24 16 25 6 8 2 115 17 19 11 18 27 19 10 6 1 17

Total 100 100 100 100 100 100 100 100 100 100

Adequacy1 70 81 36 85 27 23 53 18 22 282 57 69 14 71 23 18 27 9 9 143 50 60 10 63 23 15 20 7 14 94 44 51 7 53 18 14 14 5 4 75 26 33 5 33 24 10 14 3 2 5

Total 45 53 14 54 23 15 30 9 16 10Notes: NEC - not enough cases (<1.5%). NA - not applicable/availableSource: WB staff estimations.

2. Country Context

Lithuania has put in an impressive economic performance in the past few years, earning such nicknames as the “Ballistic Baltic” and the “Baltic Tiger” from foreign market observers for the speed and sustainability of its recent economic growth. The economy made a sharp turnaround in the aftermath of the Russian crisis of 1998. GDP grew by 6.8 percent in 2001–02, 10.5 percent in 2003, 7 percent in 2004 and 7.5 in 2005. For 2006 the estimations of growth rate are about 8.814 or 6.615. The accelerated growth was due

14 Projected by Lithuania Statistic ( http://www.std.lt/uploads/docs/BVP_ivertis2.doc15 Projected by National Action Plan against poverty and social exclusion.

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mainly to a strong export performance. Two years later the initially export-led GDP growth translated into expanding domestic consumption, followed and complemented by bustling construction activity. All this started a positive growth cycle, and the Lithuanian economy is showing its best performance since the start of transition in 1990.16

Even so, Lithuania is merely catching up with the higher-income countries of the EU8.17 The conventional wisdom is that high economic growth is always more likely in lower-income countries. Indeed, Lithuania produced the highest growth in industrial production and overall GDP among the EU8 countries in 2000–03, yet still ranks at the bottom of this group in these areas relative to 1990: it is one of only two EU8 countries whose GDP remains below the 1990 level, and it had the slowest recovery in industrial production during the 1990s. Moreover, the recent rapid economic expansion has a downside, including high unemployment, the dependency of GDP growth on low-tech exports, and an ongoing loss of productive labor leaving for the larger EU countries in search of better-paying jobs and thus exacerbating the old-age dependency ratio.

Lithuania’s accession to the EU as a full-fledged member on May 1, 2004, crowned the long journey toward membership that started in the early 1990s. In the previous few years Lithuania had emerged among the leaders in the EU10 in making structural changes in preparation for membership and in completing accession negotiations with Brussels. The latest European Commission pre-accession report on membership readiness18 praised Lithuania for its efforts.19

16 World Bank (2005).17 The EU8 is the group of eight Eastern European countries acceding to the EU in 2004.18 European Commission 2002 Regular Report on Lithuania’s Progress Towards Accession19 World Bank (2005).

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Table 6 - Country Context (2000-2005)

2000 2001 2002 2003 2004 2005Population (millions) 3,512 3,487 3,476 3,463 3,446 3,425GDP per capita (US$)1 3,252 3,487 4,104 5,390 6,544 7,487GDP growth (%) 3.0 6.4 6.8 10.5 7.0 7.5Labor force (millions) 1,671.5 1,635.8 1,630.3 1,641.9 1,620.6 1,606.3Unemployment, total (% of total labor force) 16.4 17.4 13.8 12.4 11.4 8.5Employment in agriculture (% of total employment) 18.7 17.3 17.8 17.9 15.8 14.3Employment in industry and construction (% of total employment) 26.8 27.1 27.5 28.1 28.2 29.2Employment in services (% of total employment) 54.5 55.6 54.7 54.0 56.0 56.3Poverty rate (%), PPP$ 2.15/day National 16.0 16.5 16.6 15.9 16.1 16.9* All urban 10.5 11.1 10.6 10.3 11.3 11.3 Rural 27.6 27.6 28.5 27.4 25.7 29.5Gini (per capita)7 0.31 0.31 0.30 0.29 n.a n.a

Public expenditures on health (% of GDP) 1.4 1.2 1.2 1.3 1.2 n.aPublic expenditures on education (% of GDP) 6.0 6.1 6.1 5.8 5.8 n.aSocial Protection spending (% of GDP) 2.5 2.2 2.1 2.0 2.4 n.aNotes: 1 The exchange rates used are: 2000: 4.0, 2001: 4.0, 2002: 3.7, 2003: 3.3, 2004: 2.7, 2005: 2.6* Preliminary daten.a.: not availableSource: Statistical Yearbook of Lithuania. 2001 (2004) Statistic Lithuania. 2001 (2004).

3. Role of SBP within the Social Protection Sector

Spending on the Social Protection System (Social Insurance (SI) plus Assistance (SA)) represented about 13.7 percent of GDP in Lithuania in 200320 and 9.4 in 2004. In 2004, about 91 percent of the SP expenditure corresponded to social insurance where pensions take about 79 percent. This high expenditure on pensions is due to the mandatory Pay as you Go system that provides generous benefits including early retirement, high replacement rates, among others, to a wide range of pensioners (about 27 percent of population), plus several non-contributory benefits (sick leave, maternity leave, benefits to farmers). As a result of the aging population, there has been an increase in the number of beneficiaries coupled with a decrease in the number of contributors as a consequence of the high unemployment and of informal employment. The social assistance programs represented 9.4 percent of total SP expenditure reaching 0.8 percent of GDP, and the SBP expenditures were about 0.1 percent of GDP, in 2004.

The Lithuanian social protection system benefits about 70 percent of the national population. Within this share the beneficiaries of social insurance take about 39 percent while those of social assistance take the remaining 31 percent. In terms of trends, total social protection spending has declined as percentage of GDP in 2000-04, by about 17 percent. The number of beneficiaries of SP has increased by about 20 percent since

77 National Strategy for …. - NAP (by Eurostat methodology)20 Statistical Yearbook of Lithuania. 2001 (2004) Statistic Lithuania. 2001 (2004)

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2000. In 2004, expenditure for the means tested (MT) social assistance was of about 0.3 percent of GDP, while in 2005 it was about 0,22 percent.3

Table 7 - Composition of the Social Protection Sector

2004 TrendsSpending

(% of GDP)Number of

beneficiariesAverage

benefit/year (US$)1

% of Change 2004/2000

Thousands

% of pop. Spending% of GDP

Benefic.% of pop.

Average benefit/y

ear (US$)

Total Social Protection4

9.4 2,406 69.8 - -17.4 20.1 -

Total Social Insurance 8.6 1,339 38.8 - -16.3 5.1 -Pensions 6.8 942 27.3 109 -15.4 2.0 -Unemployment Benefits 0.05 14.9 0.4 1260 -71.2 -53 -Others 1.7 382.1 11.1 - -15.1 20 -Total Social Assistance 0.8 1067 31.0 - -26.5 46.6 -MT programs 0,3 547 15.9 - -35.8 6.2 --SBP 0.1 84 2.4 26 -44.2 -25.6 --Compensations 0.1 2311 6.7 502 -38.6 7.5 --Free meals to pupils 0.1 181 5.3 13 -21.7 19.8 --lump sum 0.01 51 1.5 - 19.9 40.5 -NMT programs 0,5 520 15.1 - -19.3 144.2 -- Benefits for families growing children

0,3 434 12.6 - -18.8 232.6 -

- benefits for deprived children (orphans)

0,1 15 0.4 - -10.4 39 -

- Birth grant 0.04 30 0.9 - -39.1 -10.1 -Other programs (funeral benefit)

0,05 41 1.2 - -22.9 7.1 -

Pro Memoria 2000 2001 2002 2003 2004 2005

Average wage US$ (netto)

173 175 197 235 309 356

Average wage for unskilled workers US$

n.a.

Minimum wage US$ 108 108 116 130 185 211Notes: 1 The exchange rates used are: 2000: 4.0, 2001: 4.0, 2002: 3.7, 2003: 3.3, 2004: 2.7, 2005: 2.62 2005 data. 3 For heating season.4 This figure differs from the one presented in Table 6 because the concept of social protection described here is wider than the normal SP composition in national accounts.

In Lithuania the SA system to family and children is based on provision of means-tested (MT) and non-means-tested (NMT) assistance. SA to low-income families consists of:

- Social benefit which has been established to assure minimum subsistence of low-income individuals;

33 The social and economical development of Lithuania. The Lithuanian Department of Statistics, 2004; Social Protection in Lithuania 2004. Statistic Lithuania. Vilnius, 2006.

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- Compensations which has been established for those not able to pay for the main utilities (heating, cold and hot water);

- Free meals to children in low-income families at schools of general education.

Means tested cash social assistance is given to individuals unable to ensure sufficient earnings for subsistence by themselves, and also in cases when other social security guarantees (e.g., pensions) are insufficient for subsistence. In recent years the demand for SA services has been low due to the rapid growth of the economy and the decrease of the unemployment rate.

In 1990, after reinstatement of the Lithuanian Independence, in the course of restructuring of the soviet social security system, the Seimas21 approved a law on Individual Income Security, which was a first step in the creation of means test social assistance. The system provides cash benefits, in-kind benefits and social services.22 Over the last 15 years the system carried out numerous amendments and adjustments in order to form a balanced (tested – categorical; cash benefits – social services) social assistance system, which would cover all individuals who need assistance.

Social Benefit Program (SBP) as a guaranteed minimum income has existed since 1990, Compensations program since 1994, and Pupils’ free meals program since 1995. During this period the first two programs were focused on the poorest. The eligibility criteria was mainly based on income, until 2004. A new Law on Cash Social Assistance to Low-income families (Single Individuals), introduced assets as eligibility criteria, since 2005. SBP Program (as other programs of social assistance) is administered by social assistance departments in municipalities, autonomously. There is not a standard regulation about implementation. In 2002, with The Phare Consensus project, the social benefit procedures were standardized, however it didn’t cover all social benefit implementation process.

The categorical social assistance supports families with children or individuals belonging to particular social groups. The benefit-to-children program stipulates allowances to families who grow children. The employees with minimal wage, unemployed receiving unemployment benefit and retirees (if they don’t have dependants) are not covered by SBP. They are covered by the compensation of heating and water costs system.

Table 8. The state supported income in Lithuania, 2004Benefit – LTL Benefit – US$

1. State supported income 135 502. Minimum wage 500 1853. State social insurance basic pension3 172 644. SB threshold 121,5 455. Average unemployment benefitminimum maximum

179135693

6650257

Source: Statistical Yearbook of Lithuania. Statistics Lithuania. 2004. P. 103, 588, 596. and http://www.std.lt

21 Seimas: Parliament 22 The concept of social assistance. Resolution of the Government of the Republic of Lithuania, 1994.

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The amount of the state supported income (US$ 50) is approved by governmental resolution since 1998. Only in 2006, it changed to 165 LTL (US$ 57).23 This amount is the basis to calculate SB benefits. SB threshold is 90 percent of the difference between the state supported income and average monthly income of the family.24

State social insurance basic pension’s amount is equal, by Law, for all, who has mandatory record participation years in labor market. It cannot be lower than 110 percent minimal living standard in the country. As a consequence, retiree is excluded from SB receivers. This amount is confirmed by government. The additional part of social insurance benefit depends on previous wage amount and record participation years in labor market. The minimal unemployment benefit is composed by a basic component which is the State-supported income plus the additional component which depends on previous wage during last 36 months. The maximum benefit is equal to 70 percent of insurance income, which is confirmed by the government.

Categorical Assistance

Assistance to families irrespective of their earnings is sought not only to minimize the level of poverty in families with children, but also to improve the subsistence level in all families who grow children. Other categorical social assistance, such as burial allowance, transport privileges, compensation of transport costs or various social care services are rendered to individuals belonging to particular social groups (e.g., to the disabled, schoolchildren/students, elder population, victims of abuse, the homeless, etc.).

Means Tested Assistance

Means tested social assistance, which includes cash benefits and social services (benefits in kind), is rendered subject to family’s (or single individual’s) income and property (to qualify for some particular type of benefits).25 In addition to this benefit, there are other auxiliary tested social assistance programs, such as compensations for heating, hot and cold water costs, free of charge catering at schools for children from poor families. It is quite difficult to compare the rates of categorical and means tested social assistance by the number of beneficiaries due to insufficient information. However, based on estimations available from existing official information, the ratio between categorical and social assistance expenditure was of about 1: 0.7 in 2004 (See Annex 1).26

23 For 2006 an exchange rate 1US$=2.9 was used.24 In 2005 Minimum wage was 550; State social insurance basic pension was 200. In 2006 State supported income is 165. The average unemployment benefit: minimum 165 and maximum 759.25 See section 4.3 for calculation of benefits.26 Social Report. The Ministry of Social Security and Labor, 2004, page 113

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In Chart 1, there is a description of the cash social assistance programs in Lithuania.

Chart 1 - Cash social assistance for families and children in Lithuania 271

Cash social assistance for families and children

3.1. Legal framework:

In 1990 the Parliament approved a law on Individual Income Security, which stipulated that families with income less than the state supported one (per each person) should be beneficiaries of SBP. The Law also specified that the size of the state-supported income should be approved by the Government of the Republic of Lithuania on the proposal of the Ministry of Social Security and Labor.28 The procedure for payment of the mentioned benefit was regulated by the Provisions of the Assignment and Payment of Social Benefit, as approved by the resolution of the Government. These provisions have been exposed to repeated amendments and supplements.

27 In 2002, the Ministry of Social Security and Labor (MSSL) made a Report on the Social Assistance System, which stipulates the basic regulations governing social security and labor protection, administration systems for some particular branches of social security, eligibility to social benefits, calculation thereof, etc. www.socmin.lt1

28 Since 1998 it has been LTL 135 (US$ 34).

Mean teasted

Social benefit Reimbursement of heating, hot and cold

water costs Free of charge catering school children One Lump sum benefit Benefit for families with 3 children Support for educational books for school

children

State benefits to families with children

Benefits to children deprived of Parental Care Support in case of

death

Family benefit Benefit for families with 4 and

more children Military family benefit Pregnancy benefit to studiyng

women Lump sum for swaddling-

clothes

Child foster benefit Orphan’s grant Settlement benefit for

orphan’s and children without parental support

Funeral grant

Categorical

Birth grant

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The SB program is governed by the LCSA adopted on 1 July 2003, which entered into force on 1 April 2004, and a number of secondary legislation approved by the Minister of Social Security and Labor and Minister of Finance (MOF). These regulations specify in detail the mechanism for receiving SB, specifying:

- application form for provision of cash social assistance (see Annex No. 3);- household testing report form;- methodology for property family assessment (single person) for those applying

for cash social assistance;- instructions for assessing the value of agricultural production; standards of

income from agricultural activities; income standard per hectare of agricultural land;

- procedure for recruiting of recipients of social benefits for socially useful work;- explanation of computation and payment of social benefits;- annual statistical report containing data on cash assistance rendered to families in

the territory of municipality.

Comparing the old and new SB program, the key difference is that assessment of property is introduced in the new program. Other characteristics of the program changed insignificantly or remained the same.

Table 9. Comparison of the old and new schemes of SA Program

characteristicsOld system

(applied until March 2004)New system

(valid from April 2004)Unit of benefit Family (or single person) Also a family (or single person), but

the family (single person) is strictly defined

Criteria to qualify for benefit

Only income Property is also used in addition to income

Documents to be provided obligatory upon application for benefit

No substantial changes

Income included in the tested one

Basically the same, but some income of social nature is not included (see LCSA Art. 12, § 1.12)

Addition conditions to qualify for benefit

Insertion of new conditions to qualify for benefit, such as: - no restrictions for land holders- divorced or unmarried persons with children need decision approved by a court - owner of personal enterprises can apply if have a status of liquidation

Benefit formula No changesSize of benefit No changesPeriod of application renewal

No changes

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Exceptional procedure Municipality’s right to pay benefit to beneficiaries not meeting general criteria. Used to be paid from the funds assigned by the state to municipality

The same, but payable from municipal funds

See Annex No. 4 for more detail comparison of LCSA programs.

Municipalities are left the right to award social benefit according to the established procedure also to individuals who do not meet the criteria specified in the law, when they deem it necessary. However, in this case the benefit shall be paid from the municipal budget.

4. Design and Implementation Features of Social Assistance Programs

4.1. Objective of the program

The objective of means tested cash social assistance programs is to provide assistance to families or individuals who are unable to ensure sufficient earnings for subsistence by themselves, and when other social security guarantees (e.g., pensions) are insufficient for subsistence.29 The SBP seeks to ensure the minimal level (supported by the state) to families (or single individuals) who lack funds for subsistence. The benefit provides assistance for a certain period of unfavorable conditions until individuals are able to take care of themselves. In addition, the conditions qualifying for this benefit are sought to encourage individuals to work and save.

The objective of the compensations is to assist individuals with low income to pay for utility services, so that they would not lose their housing. The objective of free of charge meals for children at schools is to ensure full-value meals for children from families in need, because full-value meals are vital for health and welfare of children.

4.2. Targeting Mechanism

Since the beginning of the SBP and until 2004, the eligibility of the families and individuals was means tested based on income only. After 2004, the Law on Cash Social Assistance to Low-Income Families (Single Individuals) of 200430 set up the foundations of a uniform system of cash social assistance based on income and property. The program for free meals for children has been linked to family income testing, but in the future it is planned to introduce family property testing. SBP is awarded to a family (individual) only when the following circumstances are tested: a) property; b) family’s income; c) other circumstances preventing the family from earning enough income for subsistence. Such circumstances are, but not limited to, personal state of health, career motivation, age and number of children.

The first criteria for receiving SB is whether or not grown-up family members may qualify for SB include whether they are either employed, disabled, growing small

29 The concept of social assistance. Resolution of the Government of the Republic of Lithuania, 1994.30 See annex 2.

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children, registered with the labor exchange for a period exceeding 6 months, or nursing sick family member, etc. The second criteria is whether or not income is less than the state-supported income per family member (per capita). And the third criteria is whether or not the value of family’s property is less than a certain fixed amount (according to approved methodology) for the particular family in the place of its residence.

The compensation program has the same eligibility criteria based on family income and assets. The free of charge catering of children at schools is defined by testing family’s income exclusively (without assessing its property).

4.2.1. Application Process

In Lithuania, there are different models for administration of social benefits and compensations. They can be grouped into two models: a) a model of combined functions where program administration and delivery of benefits are carried out by the social assistance unit (SAU) at the municipality; and the acceptance of applications could be delegated to Wards (structural territorial unit of the municipal administration);31 and b) a model of fully deconcentrated functions where program administration is carried out by SAU and delivery of benefits is delegated to the social assistance center at the municipality.

A person applies to a social assistance unit (center)32 and fills in an application form (13 pages) to receive social benefit.33 The person fills in this form all information about his/her family composition, employment status, income and property (see Annex No. 3- Application form). A person shall fill in the form himself/herself, but in case s/he is unable to do so, an accepting officer will assist her/him. Some municipalities recruit unemployed individuals participating in public works programs to assist in their social assistance related work. Such assistance is more relevant when at the beginning of the heating season the number of persons applying for Compensations, increases. During the questionnaire survey, some municipalities (about 35 percent) indicated that assistance of persons employed by public works programs of is used for organization of payment of the social benefit (e.g., assisting customers to fill in application forms, etc.). According to estimations a municipality employed on average 9 people from public work programs and they worked on average 5.7 months and 3.7 hours/month.

An officer reviews the filled in form and supporting documents and checks whether all items in the application form are filled in. Concurrently, the officer asks additional questions in case of any doubts. Should the applicant fail to fill in all necessary information or to provide with all documents required for the benefit, the officer hands

31 For detailed description of Wards see Annex 11.32 There is no uniform procedure to present applications and each municipality deals with the situation in the way it finds more convenient. Also beneficiaries decide where to apply depending on the distance of the centers.33 Some municipalities have special customer reception units where intake workers simply accept applications, while computation of benefits is delegated to the staff members of other units; other municipalities don’t have such units and intake workers carry out all functions related to award and computation of the SB.

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him/her a list of missing information/documents to be delivered additionally. The applicant shall witness correctness of the indicated data by affixing his/her signature and pledge to notify the circumstances for which social benefit should be cancelled or recalculated within a period of one month. The applicant is given back the original documents after copies are made.

Crosschecking of the submitted data with databases. After the officer of the social assistance unit accepts the application containing all necessary information, s/he shall crosscheck the data with the databases (Center of Registers for the possessed property; database of the Board of the State Social Insurance Fund for the social insurance benefits; Register of Individuals for the declared place of residence).

Filling in of a household testing report. If the officer has any doubts of the submitted information or documents, or when it is planned to award social benefit in the exceptional procedure on the municipal decision, the officers of the municipal social assistance unit (center) shall visit the applicant at home and fill in the household testing report. Municipalities are granted the right to assign the SB when a person does not meet the conditions specified by the law, but assessment should be made on site. The form of this report is standardized and approved by a ministerial order.34

In 2004 social assistance was given under an exceptional procedure to about 5 percent of all beneficiaries of SB. Yet, in different municipalities this percentage varies from 0 to 7 percent. Richer municipalities award more SB on exceptional procedure because in such cases SB is payable from municipal funds.

Data entering into computer and computation of the size of property and income . Information about the applicant and his/her family members is entered into a computer.35

Formation of a customer file. All documents of the applicant and his/her family are kept in one file. Computer storages also keep information about each customer.

Data crosschecking . Some social workers from the staff have access to the databases. They personally crosscheck information about particular person in other agency’s databases. After crosschecking customer file is signed by a chief expert. Then the file is forwarded to the manager of the social assistance unit who shall endorse the decision to award and pay the social benefit.

Decision notification to customers. Customers shall be notified by post and/or phone about the decision to receive the benefit within 1 month. A copy of the decision whereby

34 In accordance with information collected by municipalities, on the average, 377 household testing reports are filled in 1 municipality per year, or around 18 percent of all the recipients of SB.35 “Parama” software is used to assess whether family’s property does not exceed the fixed standard of the value of property for this family in its place of residence and then the size of social benefit is computed (if the family qualifies for the benefit). “Parama” software (instead of previously used simpler software “Globa”) is designed for municipalities and regularly maintained by private company NEVDA. This company consults municipalities, holds trainings for them. The municipalities remunerate services of the mentioned company from administration funds assigned to them.

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SB is not awarded to the family (single individual) shall be sent to the applicant at the latest within 5 working days from the adoption of the decision. The decision shall specify the reasons for disallowance of the benefit and the procedure of appeal.

Formation of a payment roll. After receipt of files containing endorsed decisions to award social benefits (the roll is made for all benefits approved for that moment, not only for social benefits), an expert makes payment rolls. Cash transfer (payment) to a customer. Cash transfer (via post, bank or in rare cases – in cash register) shall be made in accordance with the roll on a monthly basis. To collect cash at a post office or cash register, the customer shall show his/her passport or other personal identification document.

Table 10 – Application process of SBP

First step Submission of application from household head

Type of action Responsibility FrequencyFilling in of applications1 at the SAU or at Ward (YES, SAU or Ward)

Head of household Demand driven

Checking information Social officer at SAU When application is received

Second step Social administrator inquiry and information’s Crosschecks

Type of action Responsibility FrequencyEvaluation of information provided -crosschecking

Social administrator at SAU When apply for the first time, when re-apply,

Home visit if officer considers a verification

Social administrator at SAU When social officer considers it necessary

Third step Verification of eligibility

Type of action Responsibility FrequencyData entering into computer and computation of the size of property and income.

Social administrator SAU Every three month or longer if the size of property and income not

changeInform applicants about decision Municipal/Communal Council Municipal decision should be

taken within 1 month from receipt of the application form and all the required documents

(LCSA Art. 17 § 8).Fourth step Payment of SBP benefit

Type of action Responsibility FrequencyPayment of SBP benefit (via post bank)

Social administrator Every month

Fifth step Appeals/contestations

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Type of action Responsibility FrequencyContest of decision Municipality administrator

Administrative courtBy regulations of municipality

By order of administrative lawsuit

Notes: 1 The application is in a standardized form approved by the ministerial order and uniform for all municipalities.

The SB program uses the following uniform documentation forms: application form, income and property declaration form, model household testing report, model customer notification as to acceptance of his/her application, model verification of gross and net wages and other payments, forms of submission of municipal data to the MSSL and MF.

Municipalities have been issued expository instructions of the MSSL with regard to some procedures: how to compute income from agricultural activities; how to fill in particular items in the application forms for the social benefit. There are uniform programs (developed by NEVDA) for accounting of beneficiaries, calculation of the size of benefit, value of property. Such programs are used nearly by all municipalities (with few exceptions, if any).

4.2.2. Eligibility Criteria

Families (or single individuals) shall be eligible for the SB in the following cases: family members are permanent residents of the Republic of Lithuania; value of the possessed property does not exceed the fixed standard of the property

value; earnings per month are less than the state-supported income per family (calculated

per capita) and family members satisfy at least one of the conditions below:are employed and

over a period of 3 months worked at least two thirds of the maximum working hours defined in Articles 144 – 146 of the Labor Code, and wages accounted to them are not less than the minimal monthly wage or minimal hourly remuneration pro rata to the time of work or performed jobs;

have maintained employment for at least one calendar month from the beginning of employment, and wages accounted to them are not less than the minimum monthly wage or minimum hourly remuneration pro rata to the time of work or performed jobs;

are unemployed because they: study on a full-time basis at comprehensive schools or other full-time departments

of formal education - for the period until they reach 24 and also for the period from graduation of full-time comprehensive school until 1 September of the same year;

are at the statutory age of old-age pension or receive pensions (except for pensions assigned for persons within 3rd disability group), pension benefits or allowances;

are individuals within 1st and 2nd disability group (disabled);

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are unemployed individuals paid unemployment benefit or training benefit for a period of studies;

are doing public works or works supported by the Employment Fund and after expiration of the mentioned periods;

have been registered with the labor exchange for the period of 6 months at least; have been registered with the labor exchange and paid unemployment benefit,

when the period remaining until the old-age pension is less than 2 years; take care of a family member: a child which is under family’s guardianship in the

statutory procedure; a relative of one’s own or the spouse, where necessity of permanent care (assistance, nursing) has been established in the statutory procedure;

have been provided with in-patient treatment at healthcare establishment for a period of 1 month or longer;

are pregnant and the remaining time until birth-giving is 70 calendar days or less (28 pregnancy weeks or more have matured);

mother or father (guardian or foster-mother/father) is growing at home: a child under 3, who doesn’t attend pre-school education; at least one child under 8, who doesn’t go to pre-school education establishments

or school, when the family has 3 and more children under 14 and when the children are properly taken care of;

a preschool child under 8, who doesn’t go to a pre-school education establishment by a doctor’s recommendation or because there is no pre-school education establishment or it is unavailable in the locality of residence;

children from 16 to 18 are: employed (without application of the requirements of work duration and of

wage); studying at formal education establishments (after graduation – by 1 September of

the same year); disabled; registered with the labor exchange; pregnant.

Furthermore, additional conditions for assignment of the SB are set forth:- separately living spouses who grow children. They are eligible for the social

benefit, if they satisfy the above-mentioned conditions plus have entered into a child maintenance agreement approved by a court or maintenance of the child has been awarded by a court;

- unmarried individuals, who alone grow children under 18. In this case, the right into the social benefit appears only if they satisfy the aforesaid conditions plus if the children have affiliation or recognized paternity and maintenance of the child has been awarded by a court, with the exception of cases when identification of the father (mother) is impossible and courts cannot award maintenance of the child.

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Exclusion criteria:

Exclusion criteria and conditions defined in the SCSA are as follows:

The new law appeared to be more favorable for certain social groups, while for others conditions to qualify for the benefit became more stringent. Now, individuals who have been registered with the labor exchange for a period of 6 months or more are also eligible to the social benefit in addition to those who are paid unemployment or training benefits or doing public works. This entitles the long-term unemployed into the SB which was not allowed before. Some groups of the population are not eligible for the social benefit despite their income is less than the minimum established. For example, coming into force of the new procedure for assignment of unemployment benefit on 1 January 2005 (enshrining the right into unemployment benefit only for those persons who have social insurance experience sufficient to qualify for the benefit) made the situation worse for school graduates and ex-prisoners (they don’t have social insurance experience and do not receive unemployment benefit).

Provisions of the new law tightened the right into the SB for unmarried or divorced persons growing children alone. In compliance with the national legislation of Lithuania, both parents are responsible for maintenance of the child regardless of whether or not they are married. Therefore, the law specifies that the SB shall be assigned to families of unmarried individuals growing the children alone only in case of affiliation and maintenance of the child being awarded by a court. When the mentioned preconditions are absent but the family lives poorly and meets the criteria to qualify for benefit, the benefit shall be assigned for the children only.

Eligibility to the SB program became restricted for the owners of large housing units, since the regulatory value of their property prevents them from claiming social benefit despite the fact that they receive low income or have no income at all. It is relevant in case of rural localities, small towns, where demand for households is very low and it is hardly possible to sell such large houses or exchange them for smaller one. Moreover, a system has not been created so far to assist such individuals in selling their property when they are incapable of doing this by them selves.

It is often difficult for representatives of the Romany community to qualify for the SB, as most of them are unemployed and not registered with the labor exchange. In addition, married families constitute minority in the Romany community. This problem is mostly relevant for Vilnius municipality, where the biggest Romany community in Lithuania has settled. Quite many Romany women, who had enjoyed social benefits as single mothers before coming into force of the new law, have settled paternity issues thereafter, while others are satisfied with receiving the SB for the child only. Moreover that particular municipality often assigns them assistance in the exceptional procedure (they simply know how to press for it).

Persons engaged in small agricultural farms, who don’t have other employment relations, do not appear for registration with the labor exchange (actually, in rural areas labor exchanges have no opportunities to offer any jobs or they are quite in a distance) and live on income earned from their land, are not eligible for the SB.

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The fact of significant decrease in the number of SB beneficiaries in 2004 demonstrates reduced scope of application of the program, but it is impossible to judge on increased or decreased targeted performance of the program without a special study.

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4.2.3. Verification of Eligibility

If a family meets the income/assets criteria, but none of the other enumerated above, it does not get a benefit but (in some cases) could get benefit in exceptional procedure.

Income sources which are taken into consideration when establishing eligibility cover 23 types of income (see annex 3 - the Application Form), only some incomes are disregarded, namely compensations of transportation expenses for invalid and disabled persons, compensations for persons with diabetes, monetary funds paid for child (adopted child) support (alimony). For the purpose of allocating SB to a family (or a person living alone), income of the family (the person living alone) shall not include either the SB received or compensations provided for by the Law herein; charity in the form of monetary funds, the total amount of which is less than 4 times the state-supported income.

Regulatory property value allowing a family (individual) to claim the SB is computed by Lithuanian cities/towns and municipal centers. It includes the standard household value (60 sq. m, plus 15 sq.m., for each family member); standard value of a land lot, and standard value of movable property (45 state-supported income (SSI) for one family member over 18; 30 SSI per each other family member and 15 SSI per child). When a person applies for the social benefit, his/her property value shall be summed up and if it does not exceed the regulatory property value defined for particular city/town, the person shall be deemed eligible.

The size of the state-supported income is approved by the governmental resolution. At the moment it equals LTL 135 and has stayed as such since 1998. In 2004, the average SB amounted to LTL 70; in 2003 – to LTL 66.36

4.2.4. Update and recertification process

In case of re-certification for a benefit (usually after 3 months, as permitted by law), the same procedure is applied. The applicants fill in a slightly simpler application form, have a shorter interview and they are not required to provide information on his/her property and fill in the relevant part of the application form (property is assessed once per year). In the latter case, the process of assigning and payment of benefit takes less time. Of course, this is relevant in cases when there are no changes in the conditions and the officer has no doubts. If in the recertification the person again satisfies the eligibility criteria and conditions, he/she can stay receiving the benefit as much time as the criteria and conditions are met. A municipality may assign the SB for a period exceeding 3 months, if family composition and income (of the family or single individual) remain the same.37

36 Data of the MSSL.37 There are no statistical data about average duration of benefit.

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4.2.5. Appeals resolution.

According to officials in municipalities, there are very few appeals against disallowance of the SB or insufficient size thereof.

LCSA specifies that decisions concerning SB may be appealed against in the procedure defined by the Law on Administrative Proceedings. However the procedure of appealing is not clear enough and has not been disseminated to people, as it has been done with other social security guarantees. Anyway, any person dissatisfied with disallowance of the benefit or the size thereof shall first of all appeal to the manager of the SAU. The manager shall review the documents, invite other experts and analyze the situation together with the claimant. In most cases these measures are successful and if not the claimant understands the reasons for not receiving the SB.

Some appeals reach the administrator of the municipality, who in this case invites the manager of the SAU to sort the situation out. A decision can be made to award the SB in the exceptional procedure if there exist particular circumstances that have not been fairly taken into consideration before. In practice, written complaints or appeals to a court by SB beneficiaries are very rare though present (in 2004, one appeal even reached the Constitutional Court on the grounds of disallowance of the SB to a family).

The risk of exclusion of a family (or a single individual) without any subsistence income from the SB program may be related to objective and subjective reasons:

- Incompetence or abuse of officials in defining applicant’s eligibility, computing the size of benefit;

- Insufficient public awareness of the possibilities to receive SB (which can occur extremely rarely, as it was mentioned above);

- Hard-and-fast conditions to qualify for social benefit, as defined by the LCSA (yet, municipalities are entitled to assign SB according to their own procedures).

Though there are no special studies carried out as to the number of occurrences when individuals without income are disallowed the SB due to incompetence or abuse of officials, interviews with municipal representatives implied that such cases are quite rare. First of all, it is because personnel’s qualifications, standards and discipline of work are quite high in Lithuania. Staff members don’t want to risk their jobs, as job descriptions for professionals dealing with recipients of social assistance specify liability for incorrect or unlawful calculation of benefit. On the other hand, people in Lithuania are quite active and public-spirited, well knowing their rights and possibilities to appeal and sort the situation out.

The circumstance incorporating the right of municipalities to award the SB to individuals ineligible in accordance with the generally applied criteria but found qualified according to individual evaluation of municipal experts create preconditions for everyone in need to receive social benefit. On the other hand, the circumstance stipulating that the SB assigned on the municipality’s decision shall be paid from the municipal funds may limit

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the number of such beneficiaries (meaning that municipal budget is often insufficient to satisfy all needs).

4.2.6. Information Campaigns

Municipalities, MSSL, wards social workers render information about SB. One of the functions of the social assistance units in the MSSL and municipalities is to advise individuals about conditions to receive social assistance (cash benefits and social services), changes thereof, etc. Methods of information can be different: announcements in the municipality, local press, distribution of special information material (leaflets, bulletins) in public places (shopping centers, cultural, education establishments, etc.); radio, TV programs (e.g., MSSL has booked on-air time, where news in social security are reported each Monday), etc. Usually, social workers at wards, being aware of the situation of a particular individual, recommend him/her applying for social assistance, while experts at the labor exchange (mediators) inform the unemployed about such possibilities upon registration.

In addition, a person may inquire about possibilities to receive SB at his/her ward, to call to the social assistance unit by phone, to be informed by ward’s social workers. Such information is often shared by neighbors, relatives or acquaintances. Though the prevailing opinion implies that population is quite well informed about the conditions to receive social assistance (SB included), and intake of poor families (individuals) to the social benefit program is not limited due to the mentioned reason, it is likely that cases of lack of information exists for non-integrated social groups or persons (individuals without a permanent place of residence, individuals with mild mental disability, etc.).

4.3. Benefits Formula and levels

The size of the SB is 90 percent of the difference between the state-supported income per capita 135 LTL (US$ 52) and actual income per family member per month.38 The size of the state-supported income is approved by governmental resolution. Since 1998 the state- supported income per capita has been 135 LTL. In 2004, the average SB was 70 LTL (US$ 26) and 66 LTL in 2003 (US$ 20) and 81 LTL in 2005 (US$ 31).39

4.4. Management of the Program and Institutional Capacity

4.4.1. Management of the Program

The operation of the program includes various institutions (Table 11). There are three principal institutions involved in implementation of the SB Program: a) municipalities (Social assistance centers), b) wards, as a structural territorial unit of the municipal

38 Example: Family with 3 members gets income per month 300 LTL. The income per family member in this family is 100 LTL, which is below the state-supported income (135 LTL). In this case the SBP is calculated as follows: ((135x3)-(300)x0.9)=94.5 LTL. 39 Data of the MSSL.

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administration (See Annex 11), c) MSSL - Division of Support for family, which is a part of Family, Child and Youth department and d) MOF - Department of budget.

Table 11 – Institutions involved in SBP

MSSL MF- drafting of laws and secondary legislation;- methodical control over municipalities in implementation

of laws and secondary legislation (holding of thematic seminars on adoption of new laws, rendering of consultations by phone and in writing, site-visiting to meet municipality experts and politicians, enlightenment of relevant cases of awarding social benefit, etc.);

- carrying out of information campaigns: participation on TV and radio broadcasting, press releases, submission of updated information to the MSSL on a web site, preparation of brochures, leaflets;

- collection of information from municipalities about recipients of SB in accordance with the approved form (where municipalities on a quarterly basis submit information to the ministry on the number of paid down benefits, number of beneficiary families, related expenses);

- analysis of annual indicators of SB and the need for fund related benefits next year, as submitted by municipalities;

- mediation in improvement of IT and IS at municipalities; - monitoring of program implementation, organization of

scientific researches related to evaluation and improvement of the system.

- Collection of information from municipalities about utilization of funds for SB and monitoring of the size and reasonability of expenditure for this benefit

- assessment and adjustment of social assistance (SB including) expenditure estimate for the next year, as submitted by the MSSL;

- transferring special targeted grants from the state budget to municipalities, i.e., funds of the state budget for payment of statutory benefits.

Municipalities:- advising population within the territory on the procedure and conditions to qualify for SB;- acceptance of application forms to receive SB; - adoption of a decision as to award/disallow the SB in compliance with laws*; - payment of benefits via post offices, banks or directly to customers, taking into consideration

reasonability and possibilities of one or another form of payment;- replacement of payment of SB in cash with social services, if beneficiary’s family belongs to a

group of families at social risk, with no participation in socially useful works, social service programs, etc., as arranged by the municipality. (See LSCA Art. 19);

- holding additional interviews with individuals, claiming for additional information omitted in the law, making household testing reports in cases of reasonable doubts as to the right of the person into the benefit;

- provision of information to the MSSL and MOF about the number of recipients of SB, the size thereof and expenditure for payment and administration of SB;

- planning of expenditure for SB and the number of beneficiaries for the next year on the basis of recommendations from the MSSL and MOF as well as valid regulations;

- ensure the efficiency of SB organization. * However, municipalities are not entitled to disallow the award and payment of the mentioned benefit, if a person meets and satisfies all the requirements stipulated by the law. But municipalities are granted the right to assign the SB out of their own funds in the established procedure, where a person does not meet the conditions specified by the law, but judgment as to necessity of such benefit should be made on site (see LCSA Art. 19).

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Other establishments related to the Program: Board of the State Social Insurance Fund, Center of Registers, Center of the Population Register, Land Cadastre, Labor Exchange, Tax Inspectorate, Commission for Property to be Registered on an Obligatory Basis, State Enterprise Regitra (motor vehicles), Ministry of Agriculture (direct payments for crop), utility companies.

From the above-mentioned institutions municipalities receive applicant-related information necessary for the award/disallowance of the SB.

The LCSA stipulates that state authorities shall provide municipalities with free of charge information necessary for person’s eligibility to SB (or any other social assistance; LCSA Art. 20). Municipalities can also buy some information (data or services) required for the above-mentioned purposes from some institutions such as the Center of Registers, banks, post offices on a contractual basis.

Commission for Property to be Registered on an Obligatory Basis approves and specifies average market prices for real estate before May 1 every year, by municipality.

The Ministry of Agriculture approves conditional values of agricultural production, standards of income from agricultural activities, standard income per hectare of agricultural lands. This serves to estimate family’s income from the possessed lands.

The structure of the personnel involved in implementation of the SB program is different among municipalities. The majority of municipalities do not have special staff for the SBP, only. Staff members at SAU carry out a number of functions related to implementation of other cash assistance programs (workers are not differentiated by the types of benefits).40 Yet, some of the staff members in the unit (about 75 per cent on average) are not related to implementation of the SB at all. In most cases the structure of offices in the SAU looks as follows:

manager of the SAU; deputy manager; senior experts for social benefits; experts for social benefits; community inspectors (social workers).

In some communities the mentioned workers belong to the staff of the community, instead of that of the unit (center). Where social assistance unit has separate customer service and benefit computation subunits, each of them may also have managers of the subdivisions. Some municipalities have accountants for the SAU only, while at other municipalities this function is delegated to the common accounting unit of the municipality. Some functions are carried out by an IT expert.

Quality of customer interviews and recording of information necessary for receipt of benefits also depend on the environment. Many municipalities are far from having accommodated, comfortable and sufficient rooms for customer interviews (e.g., to ensure customer’s confidentiality). It is quite often that the room is crowded and occupied by several experts, which adversely affect the quality of interviews. At municipalities where 40 Municipalities hire unemployed persons from the labor exchange participating in public works programs to assist in filling in of documents related to receipt of the social benefit or compensations.

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there is no separate customer reception unit, the same official usually conducts the overall process of handling customer’s file, starting from the customer interview and acceptance of the application form and finishing with data entering into computer and computation of the benefit. In municipalities, where foreign-language speakers (usually Russian or Polish speakers) are more numerous, application officers usually know necessary languages. It is endeavored to deliver information to a customer in the language s/he understands, but application form should be filled in the official language only.

4.4.2. Training

There are no uniform requirements as to qualifications and education of staff accepting applications and interviewing the customers. Staff members who accept applications and interview the customers are usually called specialists or inspectors, but their qualification and education may be very different: university or college graduates social workers, economists, agronomists, caregivers, pedagogues, etc. They are not specially trained for performance of the mentioned activities. Normally, upon employment newcomers are assigned a supervisor who helps to master of required skills by sharing his/her own experience.

Training and manuals for intake workers. There are no uniform national requirements as to the training of intake workers employed at social assistance units (to work with beneficiaries of SB and other benefits). There are no systematic, sustained or unified training programs for these professionals either. Each municipality at its own discretion holds such trainings. In compliance with the Lithuanian law, each municipality should assign funds for qualification improvement of its staff members, but the specific procedure of qualification improvement for personnel of the social assistance units (centers) is not established.

According with information from the survey made for this study, 26 percent of municipalities indicated that their employees dealing with SB attended computer courses over the last two years. There are different ways of training:

Usually, newcomers are assigned a supervisor, who consults on mastering of required skills (in-service training);

Other municipalities arrange special in-home professional training courses where newcomers are trained by experienced workers (e.g., for a period of 1 week or longer);

Many municipalities apply practice to hold periodical in-service seminars-meetings (e.g., every month or every week), where all staff members can speak about the problems they face, ask for colleagues’ advice, discuss possibilities to improve operations or take part in some training held by in-home personnel;

There is the Center for Training of Social Workers established at the MSSL to hold various training for staff members of the SAU of municipalities and social service agencies. Yet, these trainings are of onetime nature on various subjects. The mentioned trainings have been so far more popular among municipal social workers employed at social service agencies than among cash social assistance professionals

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for whom it is not mandatory required to have qualifications of a social worker (see Annex No. 5).

Seminars held on the MSSL’s initiative in cases when there are new regulations or amendments thereof adopted in relation to social assistance (or SB) (see Annex No. 5);

Within the framework of PHARE Consensus project41, there was a number of training held for the personnel of municipal social assistance units (centers) dealing with cash social assistance programs (see Annex No. 6). In addition, one trainer was qualified at each SAU to render consulting, trainings on the issues related to the organization and administration of social assistance;

Municipalities may delegate their workers from social assistance units to courses or programs offered by various training agencies (the Institute of Public Administration, various universities) and published on home pages of such agencies or directly notified to the administrations of municipalities.

The MSSL prepares the following materials for the municipalities: a) A collection ‘Cash Social Assistance (Regulations and Explanations) and leaflets for the population ‘Social assistance and compensations for heating, hot and cold water from 1 April 2004’which was issued in a run of 1000 copies and distributed at the seminars to the SAU of all 60 municipalities. All contents are on a web site of the MSSL.

4.4.3. Maintaining program applicants or beneficiaries database

Database of SB beneficiaries is handled by each municipality independently, but most of them use uniform program Parama designed for accounting of cash social assistance by IT Agency NEVDA on the order of the MSSL (earlier, another program – GLOBA – was in use and some municipalities haven’t manage to switch to this new software due to insufficient computer equipment). However, in the nearest future it is planned to start using a uniform municipal social assistance database, stipulating uniform indicators for social assistance accounting and liability. World Bank-supported Project on Strategic Partnering is now in progress aimed at creation of a nationwide uniform social assistance information system, covering collection of data about beneficiaries of social assistance, mechanism of information exchange between the Ministry and municipalities. Municipal social assistance units and Children Rights Protection Services will be equipped with hardware and software necessary for the development of the social assistance information system. This will help municipalities to plan social development more efficiently, to carry out evaluation of such development, to identify better the need for social assistance as well as to better distribute funds for individual types of social services and cash benefits.

Signing of agreements with municipalities is in progress at the moment. Hardware will be installed in municipalities, which sign Strategic Partnering Agreements. Data supply to the social assistance information system and exchange of the data were planned to be started on 1 July 2005.

41 2001-2002 EU PHARE Twinning Project ‘Social Assistance Reform and Implementation of Acquis Requirements – Consensus III”.

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Box 1 - Information flowsInformation about implementation of the SB program circulates from municipalities in two flows:a) municipality → MSSL according to the procedure approved by the Ministry*b) municipality → MOF according to the procedure approved by the Ministry.** In addition, information about the SB is forwarded to the Department of Statistics both by the MSSL and MF. * The MSSL has approved the following (2005): a) cash social assistance awarded by municipality quarterly and b) annual report forms; c) description of the procedure for filling in the quarterly and annual report forms as to the awarded cash social assistance. This information should be delivered in electronic and paper form. Information is indicated for each type of benefit by the following indicators: number of SB beneficiaries, number of families, total expenditure per month / per quarter / per year.In annual reports municipalities should also indicate information about cash benefit administration costs by specified expenditure items, such as wages, social insurance contributions, hardware and software acquisition costs, other expenditure.

**The FM has approved consolidated forms for municipal budgets (2004): assignments to the municipal budgets by state functions and allotment thereof by quarters; plan of assignments to municipal budgets for performance of state functions (delegated to the municipalities). This information clearly distinguishes the SB program. Municipalities have to submit these forms to the FM within a month after approval of the municipal budget.When planning their expenditure for the next year, municipalities have to supply the FM with information about the SB program in compliance with the set forms and requirements (see Annex 9– Methodology for estimation of funds for performance of state functions (delegated to the municipalities), 2004).

Actually, the SAUs have direct access to the following databases:

- Territorial departments of the Board of the State Social Insurance Fund as to benefits paid to pension, benefit recipients, accounting of employed individuals;

- Center of Registers as to dispositions of real estate;- Register of Individuals as to whether or not individuals are entered in the

Register of Individuals of a particular city/town or region.

Such access to the mentioned dbases allowed identification of some recipients of social benefits who presented wrong information when applying for the SB. For example, information from the departments of the Board of the State Social Insurance Fund allowed identification of families, which used to deliver information about their children as students, while it turned out that the children are not only studying but employed as well.

Normally, in SAUs (wards) there are authorized staff members who know passwords to access the dbases, which are not accessible for other workers. Some municipalities (mainly rural) are not well enough equipped with IT and thus are unable to supply information directly to the dbases. In this case, they have to go, for example, to the city/town, centre of the region in order to verify information presented by beneficiaries.As we can see for the survey of municipalities, equipment with computers is not sufficient in municipalities, in particular with regard to wards. On the average, 10 wards

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share 1.4 computer, while at least one PC per ward is necessary in order to deal with the SB program in a efficient way. The situation is better in SAU (centers), where 9 computers on the average are used for servicing the social benefit program in 1 SAU, what means that about 75 per cent of the staff members at SAU (centers) have PCs or all workers dealing with the SBP. However, according to the representatives from municipalities, about 2.5 computers per unit (center) on the average is necessary for efficient organization of the SB.

So far, databases of municipal social assistance units have not been accessible by other state authorities (one-way connection), but both-way connection is planned in the future. The planned development of the system will create opportunities for municipalities to exchange data with other information system and registers of state authorities and agencies (Lithuanian Labor Exchange, Social Insurance Fund, State Tax Inspectorate, Register of Real Estate, Register of Individuals, etc.).

4.4.4. Reforms and Institutional changes

During implementation of the 2001-2002 Phare Consensus project, it was stated that the procedure of social assistance administration in various municipalities is greatly different and thus it is not reasonable to stipulate (regulate) the uniform procedure for administration of social cash assistance on the national level. Within the framework of the project the following material was developed and distributed: a) explanatory instrument for professionals at municipal social assistance units; b) procedural manual ‘Awarding social benefits’; c) methodological manual ‘Risk management, active file handling and information management’; and d) explanatory instrument for professionals at municipal social assistance units – ‘Income identification methodology’. All these tools are recommended for municipalities in improvement of the procedure for awarding of the social benefit and other cash social assistance, but they are not compulsory – it’s up to municipalities to choose what suits them and is applicable under their conditions.

In 2001-2002, within the framework of EU Phare Consensus III Twinning project “Program for Social Protection Reform and Social Acquis Implementation”, one of the project components was the recommendations for the social assistance administration. The project analyzed the entire process of organization and rendering of cash social assistance: application forms, filling in of the forms, computation of benefits, checking for errors, documentation flows, creation of a combined information base with other related authorities, office equipment, dbases, number and structure of human resources, functions, etc. 4 municipalities were selected to pilot implementation of project activities. Research of implementation of the recommendations carried out showed that municipalities mainly use ‘Income identification methodology’ (39 percent of the municipalities); procedural manual (35 percent); ‘Risk management, active file handling, information management’ (7 percent). Implementation of given recommendations will take time and additional resources from municipalities.

4.5. Financing the Programs and Payment’s Systems

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In 2004 the SBP budget was US$ 25.7 million (69.4 LTL millions). The share of SBP budget was about to 0.11 percent of GDP and 13.2 percent of aggregated social assistance expenditures. In 2005 the budget was about US$ 20,3 million; 0,07 percent of GDP and 9,6 percent of aggregated social assistance expenditures. The tested Social Assistance benefits in 2004 were about 38 percent and in 2005 about 28 percent of the total Social Assistance spending.42

4.5.1. Financing (centralized vs. decentralized)

In compliance with the Law on Local Self-Government, calculation and payment of the SB, benefits for families growing children, compensations of heating costs, water costs, funeral grants are state (delegated to municipalities) functions. Therefore, with effect from 2002, these benefits and compensations are paid from the state budget, transferring the funds as special subsidies. Before the year 2002, the mentioned benefits and compensations were paid from special funds of municipal budgets. In accordance with Law of the Republic of Lithuania on the Approval of the 2002 Financial Indicators of State Budget and Municipal Budgets, aggregated amounts of special subsidies are approved to each municipality for performance of state (delegated to municipalities) functions.

A determined percentage (4 percent) of all expenditure related to payment of the benefits is assigned for administration of benefits and compensations. Within the fixed limit, municipalities may cover all expenses related to the calculation and payment of compensations and benefits in accordance with the classification of expenditure estimate by budgetary authorities. Reporting for utilization of the mentioned funds was stipulated in 2004, therefore there is no official information that could serve as basis for evaluation of the structure of the spending. The methodology of the calculation of funds for performance of state (delegated to municipalities) functions was approved by the ministerial order in 2004. It also serves for calculation of the budget for the SB program (see Annex 9). These calculations are also based on the model of forecasting the need for the funds for cash social assistance, as developed by the MSSL. It is a simple computer program assisting in ensuring reasonable and much more accurate planning of funds for social assistance in municipalities. The scope of the SB budget is calculated as the average of actual expenditure within the last 3 years’ period. This average is derived by each municipality and forwarded to the MSSL. The MSSL reviews the submitted information and adjusts it, if necessary (e.g., if the size of the budget planned by the municipality raises any doubts, the municipality is asked to justify it and if such justification is not persuasive, the size of the requested funds may be cut down).

Municipalities receive aggregated subsidies for all types of benefits. If funds are insufficient for some certain benefit, this lack is covered with funds designed for other type of benefits. In the course of a year, municipalities receive funds by quarters.

Box 2 - Procedure for planning funds for the next year

MSSL has developed a form used as a basis by municipalities to provide the Ministry with information 42 In this case Social Assistance implies cash benefits, compensations and free meal to pupils.

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about funds spent for social benefits (SB including) and to calculate the need of funds for social benefits by individual types of benefits for the next year. The needed funds are calculated by each type of benefits applying a basic indicator of the size of funds and the model for forecasting the need of funds for social assistance, as developed by the MSSL. This model stipulates that in calculation of the need for the next year’s funds municipalities shall base on the average expenditure for the SB within the last three years and must take into consideration a number of economic, social, demographic factors, such as unemployment rate, number of the unemployed, number of incomplete families, etc. Based on information forwarded by the municipalities, the MSSL develops a consolidated summary on the next year’s need of funds for the SB. Such consolidated summary is presented in the course of consideration of the state budget. Usually, the needs submitted by the municipalities are not exposed to major revisions: the Ministry analyses the arguments of the municipalities as to reduction or increase of the budget, takes into consideration the influence of expected new laws or amendments thereof on the need of funds for the benefit.

The MOF transfers the funds to municipalities for performance of all the delegated state functions, including the SB payments, on a quarterly basis. At the end of the year, the municipalities shall submit information (in the form required by the MOF) about utilization of the funds. Among others, there is a special form designed for administration of expenditure for social assistance benefits. Funds that have not been used due to changes in the number of beneficiaries or the size of benefits, as compared to the planned ones, should not necessarily be transferred back to the state budget. They can be used for other purposes of municipalities. At the moment, this issue is widely addressed due to allegations that this does not motivate expedient planning and use of funds by the municipalities.

Article 3 of the Law on the Approval of the 2005 Financial Indicators of State Budget and Municipal Budgets again specifies that spared special subsidies for performance of state (delegated to municipalities) functions may be used in the 4 th quarter for funding of general needs of municipal budgets and first of all – for covering of debts. Therefore, one can expect any changes in this area in 2006 at the earliest, taking into consideration the provision that municipalities must deliver unutilized funds back to the state budget.

4.5.2. Payment Systems

To calculate SBP payments, an officer calculates the size of the SB with computer software and indicates this amount in the decision to award the benefit. When the decision to award the benefit is signed by the unit manager, the beneficiary shall be included in the roll of social benefits (which is common for all benefits payable at that time). Basing on the roll, accounting officer transfers the benefit to the bank account of the applicant, post office or makes a direct payment to beneficiary. Recently it has become more popular to transfer the benefits to bank accounts of the customers, in particular in bigger cities/towns. In rural areas it is more popular to pay benefits via post offices, as it is less common for rural population to use credit cards, ATMs can be usually found in the centers of regions only. Payment at cash registers of municipalities or wards is applied in exceptional cases only. When social benefits are transferred to bank accounts, there are no problems related to timely withdrawal thereof, while in case of payment via post offices, such cases, though being rare, do occur. In this case, money transferred to the post office comes back to the account of the unit and is forwarded for the next month’s payment. If cash benefits are paid at cash registers, there are no

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problems, as such payments are made in exceptional cases only and thus the time is always agreed upon.

Payment in rural municipalities. In some small rural municipalities, the function of payment of social benefits (and compensations) is partially or fully delegated to the wards. In case of partial delegation of functions, social workers (or inspectors) of the ward usually are the staff members of the SAU. They collect documents from beneficiaries in rural community and forward them to SAU (center) of the municipality. In this case, payment of benefits is effected in accordance with the above-described scheme.

In case of full delegation of functions, social workers of the ward normally belong to the community apparatus instead of the municipal SAU. In its case, they fully handle the entire process of awarding and payment of the SB, starting from acceptance of the documents, benefit awards, computation of their sizes and payment thereof. Then the decision to award the SB should be also undersigned by the head of the ward. The payment is made by the social worker (inspector) or accountant of the ward.

The process of payment is different among municipalities. In some municipalities, accounting officer is a full-time worker of the SAU responsible for all cash transfer operations effected by the unit. In other municipalities, this officer is employed with another unit (finance unit), which handles all financial operations and payments of the municipality. If problems of benefit overpayment arise due to the officer’s fault, the procedure is not regulated and each municipality settles it at its own discretion. Most often, efforts are taken to agree with the beneficiary that next payments will be reduced to him/her until the overpaid benefit is recovered. This fact is documented in an overpayment statement, which shall be signed by the unit manager, representative of the accounting office and the customer. Article 23 of the LCSA specifies that persons, who have hidden or misrepresented the data, required to qualify for the social benefit and thus were illegally awarded the statutory cash social assistance, must deliver the overpaid benefit back to the municipality. If they fail to do so within a month after a relevant notice of the municipality, the illegally received funds shall be recovered in court proceedings. However, municipalities often look for various other ways to settle the problem.

5. Coverage and Targeting Outcomes of SBP

5.1. Coverage

Analysis of dynamics of the number of SB beneficiaries shows that in 1996 – 2000 this number greatly varied. This could be explained by amendments in the regulation of conditions to receive social benefit. When the conditions were stricter the number of beneficiaries get down and when the conditions were more flexible the beneficiaries increased. From 2000 to 2003, the number of SB beneficiaries was less variable and accounted for 3 percent of the national population every year.

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In 2003 social benefits were paid to 119,000 individuals (3.5 percent of permanent Lithuanian residents). In 2004 this benefit was paid to a significantly smaller number of the population (83,500 individuals or about 2.4 percent of permanent Lithuanian residents). This means nearly one-third decrease in the number of SB beneficiaries compared to 2003.

The above-mentioned situation was influenced by a number of circumstances, such as coming into force (on 1 April 2004) of the provisions of the LCSA concerning property assessment in order to qualify for the SB, provisions of this law concerning entering into a child maintenance agreement when the child is raised by divorced or unmarried persons. The number of SB beneficiaries was reduced due to decreasing unemployment43 and increasing earnings of the population.44 Chart 1 presents the trend of budget and beneficiaries of the SBP.

1999 2000 2001 2002 2003 200460708090100110120130

102

115 117 117 119

84

73.7

88.6 88.1 9094.3

69.6

Chart 2 - Number of Beneficiaries and Expenses on SBP

Beneficiaries (thousands) SB Budget (mill LTL)

5.2. Targeting Outcomes and coverage

Table 12 - Program Targeting Outcomes, Lithuania LSMS 2000 (%)

43 The average annual number of unemployed registered with the labor exchange in 2003-2004 dropped down by about 15 percent.44 In 2004 the minimal wage was increased and the GOA introduced a child benefit which increased income of families growing many children and families growing children from 3 to 7 years old. However the number of beneficiaries is calculated based on estimations but not a registry system. The program does not registry beneficiaries by their identification number and therefore, the average number of beneficiaries per year was calculated by dividing the number of benefits paid in a year by three (as the benefit was assigned for three months’ period). The program for accounting of social benefit is being improved and updated to allow in future accounting not only of the number of paid benefits, but also of the exact number of beneficiaries by their personal identification numbers.

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Quintiles National Urban RuralCoverage Targeting Adequacy Coverage Targeting Adequacy Coverage Targeting Adequacy

Poorest 11 60 40 11 58 44 10 63 372nd 4 20 20 3 22 20 5 19 203rd 2 11 16 1 11 19 3 11 144th 1 4 12 1 4 10 2 5 13

Richest 1 4 10 1 5 11 2 3 10Total 4 100 31 3 100 33 5 100 29

Notes: Coverage: % of population benefiting from the program in each quintile. Targeting performance: % beneficiaries in each quintile. Adequacy: Ratio of program benefit to the consumption of recipient household (average for a given quintile). Source: Estimations based on ECA Poverty II Database, 2004

A study based on national household survey data for 2000 showed that the program is very well targeted. As much as 60 percent of beneficiaries came from the poorest income quintile and 80 percent from the poorest two quintiles. Transfers were also substantial, equivalent to 40 percent of total household consumption for the poorest quintile. However, program coverage was very small, with only 4 percent of all households, and 11 percent of the poorest quintile, receiving benefits. Therefore, in spite of being very well targeted and the fact that transfers were a substantial proportion of the total income of beneficiaries, low coverage has diminished the poverty impact of the program. Presumably coverage has also decreased since 2004 and it is important to determine how the addition of an asset ownership threshold has affected program targeting.

6. Total and Administrative Cost of SBP

The total expenditure in all social assistance programs was about US$ 194 million or about 0.8 percent of GDP in 2004. Table 13 presents total and administrative costs of consolidated SA programs. The data indicates that administrative costs are about 4 percent of total expenditures. The following is a review of administrative costs of the SBP based on a special study done for this report.

Table 13 - Total and Administrative Costs for SA Programs in Lithuania, 2004 2005Costs ALL (millions) US$1 (millions) %

2004 2005 2004 2005 2004 2005

Total expenditures for all SA programs 524.6 548.4 194.3 210.9 100 100

Spending for benefits (SB+Compensations) 133.8 83.8 49.6 31.0 25.5 15.3

Total administrative costs of SB+Compensations

5.4 3.4 2.0 1.3 4.0 4.0

1 The exchange rates used are: 2004: 2.7 and 2005: 2.6

Information about administrative costs is scarce. In order to be able to have detailed information, a questionnaire was prepared for the social assistance departments of municipality.45 The main purpose was to obtain particular information about social 45 The questionnaire form was sent to all 60 municipalities. Information was completed by 39 municipalities (65 percent). See questionnaire survey form, Annex No. 10.

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benefit administration costs. However, obtaining such information was complicated because social assistance departments in municipalities administrate a series of social benefits and compensations. To separate administration and time costs only for social benefit program was complicated because municipalities don’t have and do not separate expenditures of the different programs.

6.1. Total and administrative cost of SBP

In 2004, the law introduced a provision that municipalities shall assign 4 percent of the funds allocated for the social benefit and compensations for the administration of cash social benefit. Such a share was set forth taking into consideration wages payable to the workers employed with social assistance units (centers) as well as other expenses of the social assistance units. In 2004, 69.6 LTL million were assigned for direct SB benefits, and according to the law about 2.8 LTL million should have been assigned for administration of the program. This amounted to about 8 LTL per SB beneficiary’s family or 2.8 per benefit (average amount of SB -70 LTL per month). However, the costs, estimated by survey (disaggregated) are higher than official ones (or about 2.8 mill LTL and 4.8 mill).

Table 14 - Cost Analysis of SBP Program, 2004

Item US$1

(Thousands)% of

Administrative Costs

% of Total Costs

Cost-Transfer Ratio2

Total Costs 27,482 100.0Transfers Paid Out 25,703 93,7 6.9Total Administrative Costs 1,779 100.0 6,5 - Design, planning, &

management and outreach.361 20.3

- Determining eligibility 410 23.0 - Home visits 87 4.9 - Payment of benefit 270 15.1 - Maintenance of database 231 13.0 - Monitoring & evaluation 420 23.7 - Other -

Notes: 1 The exchange rate used in 2004: 2.7 2 Calculated as administrative costs divided by transfers paid out.Source: Interview with employees of SAU at municipal level MoLSA, MoF, etc. March 2005.

The results of the research on administrative costs produced an important conclusion: the differences in administration costs among municipalities are produced by differences in the level of qualification of employees. Conversations with municipality staff allow to reach the conclusion that there are often problems and doubts, which require time to be solved and this is directly related to staff qualification and training. The main form of staff training is learning from colleagues in workplace (See annex 12, Table 7).46

46 Calculations of disaggregated administrative costs are presented in Annex 12.

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6.2. Total cost per beneficiary and registry cost

In order to have a comparison among similar social programs in other regions, information about total cost and registry cost is of great relevance. Table 15 shows a total annual cost of US$ 308 per beneficiary (US$PPP 594), and annual cost of registry per beneficiary of US$ 11.6 (US$PPP 22.4) and average cost of interview of US$1.1 (US$PPP 2.1).

Table 15 - Estimated Total Program Cost and Registry Cost per Beneficiary , SBP Program 2004

Number of Beneficiaries-HH (thousands)

Total annual program cost per

beneficiary3

Annual program cost of Registry per

beneficiary4

Interview Cost 5

83,5 US$1 308 11,6 1,1PPP$2 594 22.4 2.1

Notes: 1 Exchange rate used was 1US$= 2.7 LTL2 To convert the figures to Purchasing Power Parity (PPP) terms, the PPP conversion factor of 2002, was used. There is a difference between 2002 and 2004 prices but 2002 was the most recent year available. One of the objectives of doing this is to be able to make country comparisons. The conversion factor used was 1.4. 3 Includes total annual cost of program divided by number of beneficiaries, including administrative and operational costs.4 Includes the cost of verification of eligibility (time and resources spent at the moment of presentation of application and posterior cross checking), home visits and maintenance of databases all divided by number of beneficiaries.5 Includes cost of home visits for verification of eligibility divided by number of beneficiaries.Source: Author’s estimation

7. Graduation and Emancipation Policies

The Lithuanian concept of social assistance states that social assistance (as well as SB) is not aimed at ensuring long-term security. It is sought to assist an individual for a certain period until s/he is able to take care of himself/herself. In addition, the conditions qualifying for this benefit are also sought to encourage individuals to work and look for sources of subsistence. In order to motivate SB beneficiaries to take care of themselves and their families, various methods and measures are applied, firstly endeavoring to relate provision of cash social assistance and employment motivation of a person. Also, to prevent SB beneficiaries from losing their professional skills, to enable them keeping contacts with community, etc., efforts are taken to involve them (if they are not participating in active labor market policy measures) in performance of socially useful works. These activities are organized by wards, and representatives from the social assistance units of the wards and municipalities co-operate in development of such employment programs.

If a person is unemployed, to qualify for the SB s/he must have been registered with the labor exchange for a period of 6 months or more. Registration with the labor exchange

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also implies fulfillment of some obligations aimed at assisting the person to access the labor market and to get out of the circle of social beneficiaries. This is the way to combine the systems of social assistance and employment. The LCSA sets forth replacement of cash benefits with services in cases when SB beneficiaries refuse of taking part in socially useful works and social service programs organized by municipalities; or when the unemployed fail to fulfill obligations imposed by the state territorial labor exchanges (to participate in vocational training or refresher courses, to accept offered jobs, public works or jobs supported by the Employment Fund, etc.). Moreover, registration with the labor exchange entitles free-of-charge healthcare services.

8. Monitoring and Evaluation

The program has been monitored on the procedures by the managers of the SAU all the time. In cases when the SB is assigned and paid down by the special social assistance center instead of the unit, this control is double, i.e., it is carried out by the managers of the center and the unit. Where acceptance of applications and payment of the SB are carried out by ward staff members, control by unit workers is minimal (if any at all), as wards staff members are managed by the head of the ward, which in a way conducts formal control (undersign benefit rolls). There are no uniform requirements, or approved procedures in the way to control. Usually, the managers of SAU formulate the practice of monitoring personnel’s operations based on common sense and their own experience. This is not formalized, but forms, ways and periodicity of quality control are agreed upon with the personnel. Usually, no special reports are made in this regard. Penalties for underperformance are set forth in job descriptions. In addition, penalties may be imposed in compliance with the labor code. One practice widely applied is random audits of selected SB files carried out by the managing officers of municipalities. They audit the content and organization of information in the files, correctness of computation of the benefit, etc.

Within the framework of the mentioned Phare Twinning project, there was developed methodology on ‘Risk management, active file handling and information management’. This methodology contains recommendations on how to make decisions and monitor payment processes. It is recommended to fill in personnel’s work reports on a weekly basis. This report form is designed for monitoring of decision-making and payment control processes per week. It helps the managers to analyze workloads and time spent for document handling as well as to plan resources more efficiently. It also reflects the number of inquiries about the benefit, the number of finalized applications, the number of pending applications. There is a form: the weekly management report, designed for collection and monitoring of all decision making and payment control processes as well as of efficiency of additional file studies. According to operational evaluations, this methodology is used by very few municipalities (about 7 percent).47

47 Evaluation of implementation of the recommendations of the Phare Twinning Project Consensus III. Research report. Institute of Labor and Social Researches, 2004.

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8.1 Verification and Audits (ex-post verification system)

Verification and audit of SP program implementation stages are not formalized yet. There are not unified models in Lithuania. Each municipality exercise verification and audits activities according to various manners.

The size of the benefit cannot be calculated incorrectly, as this is done by the software based on the entered data of the beneficiary. The same applies to the assessment of the property value. The only chance to make mistakes is to enter data incorrectly. Depending on the municipality there are various verification schemes as follows: i)Vilnius municipality has formed a special inspectors Group, which reviews files of each beneficiary (SB beneficiaries including), checks whether all necessary documents have been submitted, whether the benefit is righteously assigned and confirms eligibility, ii) municipalities with separate customer reception and benefit computation sub-units have one more level to double checking and reduce mistakes; iii) Payment of the benefit is pre-approved by the signature of the manager of the SAU; iv) many municipalities apply scheduled random audit of files of social benefit recipients (when some files are randomly selected, for example, once per month to verify reasonability and correctness of the benefit award). This is done by the unit (center) managers; and v) some municipalities apply classification of files into SB beneficiaries at high, medium and low risk (criteria for classification by the mentioned risks are defined by the municipality).

Possibilities for errors, inaccuracies (abuse) on municipal level decrease due to the approved methods for calculation of SB funds, submission of regular quarterly reports to the MSSL and MF, where information is not analyzed in detail, but attention is paid to more significant variations in the need for funds or the number of SB beneficiaries, etc.

9. Summary Conclusions and Lessons Learned

The experience with the SBP suggests a number of lessons for similar programs in the region. Firstly, in economies where informal or casual earnings are an important component of household income, the difficulty in verifying reported earnings will eventually require the use of a broader set of eligibility conditions than just reported income. It is important that any additional indicators are verifiable and sufficiently correlated with economic status to improve program targeting. Secondly, in a growing economy, requiring regular recertification and linking eligibility to maintaining links with or participation in the labor market not only helps to improve targeting outcomes but also facilitates households in pulling themselves out of poverty. Thirdly, for eligibility rules to be effective requires that sufficient resources be devoted to program implementation, e.g. having a clear and well understood application process supported by a program database that is maintained on a routine basis and capable of being integrated with other government databases. Fourthly, maintaining good targeting performance requires an effective ongoing monitoring and evaluation system with those responsible for screening applicants having a clear line of reporting to monitoring agencies.

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The better targeting of the SB program is associated with: Implementation of a uniform system for all cash social assistance rendered on the

principle of income and property testing; Possibility to assign the SB on exceptional cases (when person does not meet the

conditions specified by the law); Possibility of crosschecking the submitted data with databases (Center of

Registers; dbase of the Board of the State Social Insurance Fund; Register of Individuals etc.);

A dissemination of information about conditions and possibilities of benefit reception (information booklets and leaflets, a regular broadcast in the national radio program);

Specifying in regulatory legislation the mechanism for SB awards:- Clear instruction on how the application form should be fulfilled;

- Methodology for assessment of property of a family;- Conditional value of agricultural production; standards of income from agricultural activities; income standard per hectare of agricultural land;

- Procedure for recruiting of recipients of SB for socially useful work.

The better targeting is associated with better procedures.

Tools are recommended for municipalities in improvement of the procedure for awarding of the social benefit:

Classification of SB beneficiaries’ files by risk: high, medium and low risk. Social assistance unit dividing into customer reception and document handling

subunits; Introduction of a separate office for the information expert; Additional verifying of file (creating of special groups of “inspectors”, which

one more time verify the case with its documents and sign it if the information is correct).

Formation of one file (when 1 file contains information on whatsoever social assistance received by that customer);

Development of application, appeal and decision making forms; Performance of audit function by a unit manager in the form of random audit

of files.

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The better targeting is associated with:

A concrete definition of support unit. It enables to avoid uncertain situations, when it is not clear whose income or asset should be calculated when client’s eligibility to SB is determined.

Giving an identification number for beneficiaries according to their personal documents. This enables to avoid duplications when applying for SB in several municipalities as well as secure the possibility of accurate recording of SB recipients. Transferring a part of functions of municipality to the wards. This leads to better SB accessibility for socially vulnerable people as well as for all people looking for the information. Furthermore, work load of the specialists in the Center decreases and they can devote more time for working with clients and their cases.

Finally, an evaluation of the NE program according to the following four principles for judging “good practice” in household targeting systems: a) maximizing coverage of the poor, b) minimizing leakages to the non poor, c) cost efficiency, and d) transparency; gives the following results:48

a) In maximizing coverage of the poor SBP has room for improvement, because only 11 percent of poorest quintile population was covered by the program in 2000 and only 4 percent of the second quintile was covered.

b) In minimizing leakages to the non poor, the targeting outcomes in 2000 showed that the percentage of rich people covered by the program, is minimum about 1 percent of the 4th quintile and 1 percent of the 5th quintile are being covered by the program. In terms of benefits, about 16 percent of benefits at national level are still been given to the richest 4th

and 5th quintiles of population.

c) In cost efficiency, the cost –transfer ratio of about 6.9 percent for the program is low for cash transfer programs. However, the highest share of the administrative cost is for determining eligibility, representing about 23 percent. The total program (cash transfers) administrative costs are not much different among countries.49 These costs range from 6 to11 percent, except Brazil (2.6 percent). Lithuania has lower administrative cost (6.5 percent) than Bulgaria (9.9 percent), Kyrgyz Republic (9.3 percent), USA (10 percent) and Colombia (10.5 percent).

d) In Transparency, all the verification procedures, the standard criteria and cross-checking with other data bases, and a process for appeals are features that promote transparency in all the stages of the program operation.

48 Based on Castaneda, et al (2005).49 To compare costs among programs a conversion of the US$ figures to PPP figures was made.

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References

CASE Kyrgyzstan Center for Social and Economic Research. (2006). Program Implementation Matters for Targeting Performance: Evidence and Lessons from Eastern and Central Europe. Country Study: Kyrgyzstan.

Castañeda, Tarsicio and Kathy Lindert, with Bénédicte de la Brière, Luisa Fernandez, Celia Hubert, Osvaldo Larrañaga, Mónica Orozco, and Roxana Viquez 2005. Designing and Implementing Household Targeting Systems: Lessons from Latin American and the United States. Social Protection Discussion Paper Series No. 0526.

Coady, David., Margareth Grosh and John Hoddinott. 2004. Targeting of Transfers in Developing Countries: Review of Lessons and Experience. Washington, DC. World Bank and IFPRI.

Eurostat. Luxembourg. 1996. ESSPROS manual.

Institute of Labor and Social Researches. 2004. Evaluation of implementation of the recommendations of the Phare Twinning Project Consensus III. Research report.

Institute of Public Policy and Management on the order of the MSSL. 2004. Research report.

Kolpeja, Vilma. 2006. Program Implementation Matters for Targeting Performance: Evidence and Lessons from Eastern and Central Europe. Country Study: Albania.

Lindert Kathy, Skoufias E. and Shapiro Joseph. 2006. Redistributing Income to the Poor and the Rich: Public Transfers in Latin America and the Caribbean. World Bank.

Shopov, Georgi. (2006). Program Implementation Matters for Targeting Performance: Evidence and Lessons from Eastern and Central Europe. Country Study: Bulgaria.

Statistics Lithuania. Vilnius, 2006. Social Protection in Lithuania 2004.

Statistics Lithuania. 2006. Social Protection in Lithuania 2004.

Statistics Lithuania. 2004. Statistical Yearbook of Lithuania. 2001-2004.

The Lithuanian Department of Statistics. 2004. Lithuanian Statistical Chronicle.

_______. 2004. The social and economical development of Lithuania.

The Ministry of Social Security and Labor, 2004. Social report. Page 113.

The World Bank. 2005. Lithuanian Investment Climate Assessment. Europe and Central Asia Region. Private and Financial Sectors Development Sector Unit. May.

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______. 2004a. “Keeping a sustainable the growth beyond the transition”.

______. 2004b. World Development Indicators.

Key information sources used as a basis in preparation of the Study: legislative background governing the SB program; Department of Statistics and statistics of the MSSL on the indicators of the SB program; data from questionnaire (Annex No.10) survey carried out by municipalities in the process of preparation of the Study; information from interviews with staff members of the MSSL, some municipal social assistance units (centres); material derived from surveys carried out on the order of the MSSL; reports of research carried out by order of MSSL, expert reports in EU PHARE Twinning project ‘Social Assistance Reform and Implementation of Acquis Requirements’ (see the List of References).

Other documents:

National Action Plan against poverty and social exclusion.

The concept of social assistance. Resolution of the Government of the Republic of Lithuania, 1994.

The Reports of EU PhareTwinning Project ‘Social Assistance Reform and Implementation of Acquis Requirements – Consensus III”. 2001-2002.

Change and Choice in Social Protection. The Experience of Central and Eastern Europe. Volume 2. Phare Consensus Programme. 1999.

The Report on the Lithuanian Social Security System . 2002 m. MSSL. www.socmin.lt

Lithuania Statistic ( http://www.std.lt/uploads/docs/BVP_ivertis2.doc

http://www.socmin.lt/

http://www.std.lt/

http://www.sodra.lt/lt.php

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Annex 1. Number of beneficiaries of social assistance and expenditure by different type of benefits in 2003 and 2004Benefits and other forms of assistance Number of

beneficiaries1

THOU individuals

Expenditure, MIO LTL

2003 2004 2003 2004CATEGORIAL SOCIAL ASSISTANCE 200.9 492.2 280.7 304.21. One-time childbirth benefit 30.0 29.6 22 22.32. Pregnancy benefit to studying women 0.211 n.a 0.046 n.a3. One-time benefit for pregnancy women n.a 3.8 n.a 1.04. Family benefit 76.6 87.1 83 47.35. Benefit to children of conscripts 0.06 0.04 0.1 0.16. Benefit to families with 3 and more children 43.5 53.5 78.6 44.27. Child benefit n.a 266 n.a 102.48. Children care (guardianship) benefit 9.1 9.5 48.6 51.19. Orphan’s grant 2.48 n.a 14.9 n.a10. Settlement benefit to orphans and children deprived of parental care

1.30 1.7 5.4 5.4

11. Funeral grant 37.6 41.0 28 30.4TESTED SOCIAL ASSISTANCE 333.9-803.9 282.2 264.3 199.9

1. Social benefit 119.4 83.5 94 69.62.Compensations of heating and water costs2 4703 n.a 105 64.53. One-time benefits 56.4 50.7 4.3 4.74. Free meals to pupils (project) 158.1 148 61 61.15. Social assistance pension n.a n.a 105.7 n.a1 Recipients of benefits paid to families growing many children (row 1.5) – average monthly number of families paid benefits in 2003; One-time benefits (rows 1.1; 1.8; 2.3 and 3) – from the total number of benefits paid per year; Row 4 – average monthly number of children provided with free meals at schools in 2003; The number of other beneficiaries is calculated as the average number of benefits paid per month.2 in 2001 n.a.: not available.

Source: Social report. The Ministry of Social Security and Labor. 2002. P. 109.

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Annex 2. LAW ON MONETARY SOCIALS SUPPORT FOR LOW INCOME FAMILIES (FOR PERSONS LIVING ALONE) OF THE REPUBLIC OF LITHUANIA. 1 July 2003

CHAPTER ONE GENERAL PROVISIONSArticle 1. Purpose and application of the Law 1. The purpose of the Law herein is to determine, following the evaluation of the property and income of low income families (of persons’ living alone), size of and conditions for provision of monetary social support to them provided by the state, beneficiary rights and responsibilities, financing sources.2. Wording of the Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)This Law shall apply to persons permanently residing in the Republic of Lithuania and complying with provisions of Articles 4 and 6 of the Law herein.3. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Persons permanently residing in the Republic of Lithuania are citizens of the Republic of Lithuania, whose details on the place of residence in the Republic of Lithuania, and, in the case of those who have no of residence, on the municipality where they reside, are recorded in the Registry of Residents of the Republic of Lithuania, and aliens permanently residing in the Republic of Lithuania. Article 2. Types of monetary social support for low income families (for persons living alone) Types of monetary social support for low income families (for persons living alone) (hereinafter referred to as the Monetary Social Support) are as follows:1) a social allowance;2) compensations for dwelling heating costs, cold water and wastewater costs and hot water costs (hereinafter referred to as Compensations).Article 3. Definitions of key terms used in the Law herein 1. Persons living together shall mean persons over 18 years of age living together without having registered their marriage.2. A dwelling (residential premises) (hereinafter referred to as the Dwelling) shall mean a one-flat residential house, or part thereof, a flat or other residential premises fit for inhabiting by one person or one family and complying with construction requirements as well as those of special norms (hygiene, fire protection, etc.). 3. Useful area of a dwelling shall mean the total floor area of residential rooms and other dwelling premises (kitchens, sanitary rooms, corridors, built-in wardrobes, heated loggia and other heated auxiliary premises). The useful dwelling area shall not include the floor area of balconies, terraces, basements and unheated loggia.4. A problem family shall mean a family with deteriorated interrelationships where one of the parents fails to perform child care functions or treats other family members improperly, or/and both parents fail to resolve their interrelationship problems and involve children, or/and one for the parents or both parents are not capable of taking care of their children or treat them improperly, or/and use received state support for other than family interests.

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5. A social risk person shall mean a person over 18 years of age with emotional, behavioural, social problems resulting in his/her social exclusion, i.e. a beggar, a bum, a destitute person or/and one that suffered psychological, physical or sexual coercion, violence in the family, or/and abusing alcohol, narcotic, psychotropic or toxic substances, or/and has gambling-dependency, or/and is involved or inclined to get involved into criminal activity.6. A social risk family shall mean a family in crisis because one or a few family members abuse alcohol, narcotic, psychotropic or toxic substances or/and have gambling-dependency, or/and because of the invalidity they have, poverty, lack of social skills are not able to or do not know how to take care of children, or/and excercise psychological, physical or sexual abuse, or/and used the received state support for other than family interests. 7. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)A family shall mean spouses or persons living together, as well as a married person, with whom their children were left to live by a court ruling regarding spouses’ living in separation, or one of the parents, their children and adopted children under 18 years of age. Family membership shall also include persons that are unemployed, not married and not living together with another person, between 18 and 24 years: studying full time in general education schools and day departments of other formal education institutions, as well as persons from the graduation day from full time studies in general education schools until 1 September of the same year. Foster-parent (caregiver) family membership does not include children with respect to who custody or wardship has been set according to the procedure established by the law.8. A norm of family (person’s living alone) property values shall mean the property value laid down in Article 11 of the Law herein, a family (a person living alone) not exceeding which is entitled to monetary social support. 9 Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)State-supported income per family (person living alone) shall mean the size income supported by the state approved according to the procedure established by the law, multiplied by the number of family members.10. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)A person living alone shall mean a person over 18 years of age residing alone and not married, as well as a married one, but residing separately under a court ruling and a person with no children or a person married with children, with whose spouse their children were left to live by the court ruling.

CHAPTER TWOSOCIAL ALLOWANCEArticle 4. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Entitlement of a family (a person living alone) to social allowance1. A family (a person living alone) shall be entitled to a social allowance, if s/he meets the conditions set out in Points 1 and 2 of this Paragraph and each family

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member over 18 years of age (a person living alone) meets at least one of conditions listed in Points 3, 4 or 5 of this Paragraph, and children between 16 and 18 years of age meet at least one condition listed in Point 6 of this Paragraph: 1) the value of property owned by the right of private ownership, as indicated in Article 9 of the Law herein, shall not exceed the property value norm determined according to Article 11 of the Law herein;2) average income of the family (the person living alone) for 3 months preceding the month when the family (the person living alone) acquired entitlement to a social allowance shall be lower than the state-supported income per family (person living alone);3) family members (a person living alone) over 18 years of age are working and over a 3 month period, for which income has to be computed, were (was) working for the duration at least two thirds of the working time, laid down in the Labour Code, Article 144 Paragraph 1 or Article 145, or are (is) working part time in cases laid down in the Labour Code, Article 146 Paragraph 1 Points 2-6, and the work pay calculated for them is no less than the minimum monthly salary or minimum hourly wage in proportion to the time worked or the work done; the work pay calculated for a family member (a person living alone) who worked at least one calendar month from the start of employment is no less than the minimum monthly salary or minimum hourly wage in proportion to the time worked or the work done; 4) family members (a person living alone) over 18 years of age: are studying full-time in general education schools and full-time departments of other formal education institutions until they turn 24 years; during the period from the graduation day from full-time studies in general education schools until September 1 of the same year, but no longer than until they turn 24 years; are of old-age pensionable age laid down by the law or in receipt of pensions (with the exception of state social insurance invalidity pension allocated to a Group 3 invalid person), pension benefits or social benefits; are Group I, II invalid persons (an invalid person) or disabled persons (a disabled person) according to the procedure established by the law; are unemployed persons (an unemployed person) in receipt of unemployment benefit, and during the study period – a study allowance, or are engaged in works for public benefit or works supported by the Employment Fund, as well as upon expiry of the indicated periods; are persons (a person) who have for at least 6 months been registered with the Local State Labour Exchange; are persons (a person) that have no more than 2 years remaining to the old-age pensionable age, are registered with the Local State Labour Exchange and are in receipt of the unemployment benefit; one of the family members is nursing a family member, a child who is in foster care of the family according to the procedure established by the law, or a close relative of theirs or of their spouse, whose need for constant care (assistance, nursing) has been established according to the procedure established in legislation; are, for at least one month, in treatment at an inpatients’ department of a health care institution; a woman is pregnant and no more than 70 calendar days remain till birth giving (upon passage of 28 and more weeks of pregnancy); 5) a mother or father (foster-mother or female caregiver or foster-father or male caregiver) are raising at their home: a child under 3 years of age not attending a preschool educational institution; at least one child under 8 years of age not attending

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a preschool educational institution or a school, when the family has 3 and more children under 14 years of age and when children are properly taken care of; a child of preschool age, but not older than 8 years of age, not attending a preschool educational institution according to doctor’s recommendation or because there is no preschool educational institution in the place of residence, or vacancies in it; 6) children between 16 and 18 years of age: are working (requirements laid down in Point 3 of this Paragraph shall not apply); are studying in institutions of formal education; during the period between the graduation day from the institution of formal education until September 1 of the same year; are invalid or disabled persons according to the procedure established by the law; are registered with the Local State Labour Exchange; are pregnant women. 2. Social allowance shall be granted to families of spouses raising children under 18 years of age, who terminated their marriage or are living separately, meeting conditions listed in Paragraph 1 of this Article, if these persons have concluded a child’s (children’s) support agreement approved by the court or if child’s (children’s) support has been adjudicated by the court. 3. Social allowance shall be granted to families of unmarried persons that are on their own raising children under 18 years of age, meeting conditions listed in Paragraph 1 of this Article: 1) if paternity of their child (children) has been acknowledged or determined and the court has adjudicated the support for the child (children);2) if, according to the procedure established by the law, identity of a child’s father (mother) cannot be determined or the court cannot adjudicate child’s support to the father (mother); 3) during the period of court proceedings regarding a case of determination of paternity and/or adjudicating the child support.4. If families specified in Paragraph 2 of this Article have not concluded child’s (children’s) support agreement approved by the court or if the child’s (children’s) support has not been adjudicated by the court, also, if paternity of families specified in Paragraph 3 of this Article has not been acknowledged or determined for the child (children) and the child’s (children’s) support has not been adjudicated by the court, social allowance shall be granted only to the child (children).5. A family member (a person living alone) meeting conditions listed in Paragraph 1 of this Article shall not be granted social allowance and his/her income shall not be included in the family income if s/he: 1) permanently or during working days resides (is supplied with accommodation and meals) in an institution financed by the state or the municipality;2) is a pupil or student under 24 years of age, studying and residing in a foreign state;3) is detained or arrested or his/her search was announced, or he is in the mandatory initial military service.Article 5. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Size of a social allowance 1. A social allowance laid down in Article 4 of the Law herein, with the exception of Paragraph 4 of Article 4, shall comprise 90 percent of the difference between the

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state-supported income per family (person living alone) and the average income of the family (the person living alone) per month. 2. A social allowance for each child, as laid down in Paragraph 4 of Article 4 of the Law herein, shall comprise 90 percent of the difference between the state-supported income per family member and the average family income per family member per month.

CHAPTER THREECOMPENSATIONSArticle 6. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Family’s (person’s living alone) entitlement to compensations1. A family (a person living alone) shall be entitled to compensations if s/he meets the conditions specified in Point 1 of this Paragraph and at least one of conditions in Points 2-4 of this Paragraph and each family member (a person living alone) over 18 years of age meets at least one of conditions in Points 5, 6 or 7 of this Paragraph, and children between 16 and 18 years of age meet at least one of conditions in Point 8 of this Paragraph: 1) the value of property owned by the right of private ownership, indicated in Article 9 of the Law herein, does not exceed the property value norm established according to Article 11 of the Law herein; 2) costs for heating of the dwelling useful area, not, however, exceeding the norm laid down in Article 7 of the Law herein, taking into account energy or fuel consumption, not, however, exceeding the norm, exceed 25 percent of the difference between the income of the family (the person living alone) and 90 percent of the state-supported income per family (person living alone); 3) costs of actual cold water as well as wastewater consumption, not, however, exceeding the norm laid down in Article 7 of the Law herein, exceed 2 percent of the income of the family (the person living alone); 4) of costs for actual hot water as well as wastewater amount, not, however, exceeding the norm laid down in Article 7 of the Law herein, when centrally supplied heat is used for hot water preparation, or costs of other energy or fuel consumed for the preparation of the normative amount of hot water laid down in Article 7 of the Law herein, exceed 5 percent income of the family (the person living alone); 5) family members (a person living alone) over 18 years of age are working and within the period of 3 months, for which income has to be computed, worked for the duration of at least two thirds of working time, laid down in the Labour Code, Article 144, Paragraph 1, or Article 145, or are working part time in cases laid down in the Labour Code, Article 146 , Paragraph 1, Points 2-6, and the work pay calculated for them is no less than the minimum monthly salary or minimum hourly wage in proportion to the time worked or the work done; the work pay from the start of employment computed for a family member (a person living alone) who worked at least one calendar month is no less than the minimum monthly salary or minimum hourly wage in proportion to the time worked or the work done;6) family members (a person living alone) over 18 years of age: are studying full-time in general education schools and full-time departments of other formal education

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institutions until they turn 24 years; during the period from the graduation day from full-time studies in general education schools until September 1 of the same year, but no longer than until they turn 24 years; are of old-age pensionable age laid down by the law or in receipt of pensions (with the exception of state social insurance invalidity pension allocated to a Group 3 invalid person), pension benefits or social benefits; are Group I, II invalid persons (an invalid person) or disabled persons (disabled person) according to the procedure established by the law; are unemployed persons (unemployed person), in receipt of unemployment benefit, during the study period – a study allowance, or are engaged in works for public benefit or works supported by the Employment Fund, as well as upon expiry of the indicated periods; are persons (a person) who have for at least 6 months been registered with the Local State Labor Exchange; are persons (a person) that have no more than 2 years remaining to old-age pensionable age, are registered with the Local State Labor Exchange and are in receipt of the unemployment benefit; one of the family members is nursing a family member, a child who is in foster care of the family according to the procedure established by the law, or a close relative of theirs or of their spouse, whose need for constant care (assistance, nursing) is laid down according to the procedure established in legislation; for at least one month are in treatment at an inpatients’ department of a health care institution; a woman is pregnant and no more than 70 calendar days remain till birth-giving (upon passage of 28 and more weeks of pregnancy); 7) a mother or father (foster-mother or female caregiver or foster-father or male caregiver) are raising at their home: a child under 3 years of age not attending a preschool educational institution; at least one child under 8 years of age not attending a preschool educational institution or a school, when the family has 3 and more children under 14 years of age and when children are properly taken care of; a child of preschool age, but not older than 8 years of age, not attending a preschool educational institution according to doctor’s recommendation or because there is no preschool educational institution in the place of residence, or vacancies in it; 8) children between 16 and 18 years of age: are working (requirements laid down in Point 3 of this Paragraph shall not apply); are studying in institutions of formal education; during the period between the graduation day from the institution of formal education until September 1 of the same year; are invalid or disabled persons according to the procedure established by the law; are registered with the Local State Labor Exchange; are pregnant women.2. Compensations shall be granted to families of spouses raising children under 18 years of age, who terminated their marriage or are living separately, meeting conditions listed in Paragraph 1 of this Article, if these persons have concluded a child’s (children’s) support agreement approved by the court or if child’s (children’s) support has been adjudicated by the court. 3. Compensations shall be granted to families of unmarried persons that are on their own raising children under 18 years of age, meeting conditions listed in Paragraph 1 of this Article: 1) if paternity of their child (children) has been acknowledged or determined and the court has adjudicated support for the child (children);

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2) if according to the procedure established by the law identity of a child’s father (mother) cannot be determined or the court cannot adjudicate child’s support to the father (mother); 3) during the period of court proceedings regarding a case of determination of paternity and/or adjudicating the support.4. Compensations shall not be granted to a family member (for a person living alone) meeting conditions listed in Paragraph 1 of this Article, and his/her income shall not be included in the family income if s/he:1) is a pupil or student under 24 years of age studying and residing in a foreign state;2) is detained or arrested or his/her search was announced, or he is in the mandatory initial military service.5. If one of a number of families (of persons living alone) residing in one dwelling and paying for utilities under one bill (payment book), is not entitled to compensations, none of the said families (persons living alone) shall be entitled to compensations.Article 7. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Norms for compensation calculations 1. The following norms shall apply for the purpose of compensation calculations:1) the norm of useful area in the dwelling per family: per family member (a person living alone) who declared the dwelling as the place of residence - 38 square metres, per each other family member - 12 square metres. These areas shall be established based on data of cadastral measurements;2) the norm of hot water and wastewater – 1.5 cubic metres per family member (a person living alone) per month; 3) of cold water and wastewater - 2 cubic metres per family member (a person living alone) per month, when centrally supplied heat is used for hot water preparation, or3.5 cubic metres per family member (for a person living alone) per month, when other energy or fuel types are used for hot water preparation.2. Norms of consumption of individual energy and fuel types used to heat the dwelling and for hot water preparation shall be approved by the State Commission for Price and Energy Control.Article 8. Size of compensations1. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Families (a person living alone), paying for heat (electric power energy) based on a single-rate price, shall be compensated for:1) during the heating season – the part of the costs for heating the useful area of their dwelling, not, however, exceeding the norm laid down in Article 7 of the Law herein, taking into account energy or fuel consumption, not, however, exceeding the norm, exceeding 25 percent of the difference between the income of the family (the person living alone) and 90 percent of the state-supported income per family (person living alone); 2) the part of costs of actual cold water as well as wastewater amount, not, however, exceeding the norm laid down in Article 7 of the Law herein, exceeding 2 percent of the income of the family (the person living alone);

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3) the part of costs for preparation of the actual hot water amount, not, however, exceeding the norm laid down in Article 7 of the Law herein, exceeding 5 percent of the income of the family (the person living alone). When calculating the costs for hot water preparation, energy or fuel consumption not exceeding the established norm for water heating and energy or fuel consumption attributed to the dwelling for maintaining hot water temperature (circulation) shall be included. When hot water is prepared using centrally supplied heat, the costs for hot water preparation shall also include costs for cold water consumed in hot water preparation (including costs for wastewater).2. If a multi-flat building owners’ association has used state-provided designated credits for the implementation of heating efficiency measures, compensation for the cost of dwelling heating shall be calculated by applying the energy or fuel consumption norm, until the designated credit has been paid in full.3. When the income of the family (the person living alone) comprises no more than 90 percent of the size of the state-supported income per family (person living alone), the allocated compensation for the cost of dwelling heating shall be equal to the actual costs for the heating of the useful area of the dwelling, not, however, exceeding the norm, taking into account energy or fuel consumption, not, however, exceeding the norm.4. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)In calculating the cost of fuel for dwelling heating and for hot water preparation, fuel prices shall be evaluated based on average fuel prices approved by municipalities.5. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)If a shared autonomous boiler-room has been installed for heating the building and/or for hot water preparation and this building has been declared as the place of residence by a number of families (persons residing alone), compensations shall be calculated separately for each of them. Energy or fuel amount consumed by each family to heat the dwelling shall be calculated in proportion to the useful dwelling area of each family (person living alone), and for hot water - according to the established norm. If the total energy or fuel amount consumed for hot water preparation by the said families is lower than the established norm, the energy or fuel amount consumed by each family for hot water preparation shall be calculated in proportion to the number of members in each family, who declared this building as their place of residence.

CHAPTER FOURDETERMINATION OF THE NORM OF PROPERTY VALUE FOR THE PURPOSE OF OBTAINING MONETARY SOCIAL SUPPORT Article 9. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Family (person’s living alone) property 1. For the purpose of allocating monetary social support, family (person’s living alone) property shall include the property owned by the right of private ownership by members of this family (the person living alone): 1) structures, including structures, construction of which has not been completed;

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2) vehicles subject to mandatory registration; 3) agricultural machinery subject to mandatory registration;4) land (including land covered by forest and water bodies);5) domestic animals, birds, fur animals, bee colonies, if their total value exceeds 4000 litas;6) shares, bonds, debentures and other securities, shares in partnerships, if their total value exceeds 2000 litas;7) works of art, jewels, jewellery, precious metals, of the value per item exceeding 2000 litas;8) monetary funds held in banks as well as other credit institutions and outside banks as well as outside other credit institutions, if their total amount exceeds 2000 litas;9) received (not repaid) loans, if their total amount exceeds 2000 litas; 10) monetary funds loaned to other persons (not repaid), if their total amount exceeds 2000 litas;11) any other property not listed in Points 1-7 of this Paragraph, acquired by the right of private ownership within the 12 months immediately preceding the month, starting from which monetary social support was allocated, if the value of its one unit (set) exceeds 2000 litas.2. Family (person’s living alone) property shall include the value of property or part thereof listed in Points 1-8 of 1 Paragraph of this Article transferred into the ownership of another person over the past period following the last submission of data on property held, which is not specified as new property acquired into the ownership or monetary funds received.Article 10. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Norms applicable to real property 1. The dwelling norm per family (person living alone) is 60 square metres of useful dwelling area per family member who declared it as his/her place of residence, by adding 15 square metres for each other family member. 2. Land plot norm per family (person living alone), taking into account the type of land held, shall be:1) area of a land plot of a residential holding: in cities - 6 ares, in towns and villages - 25 ares;2) area of a land plot of agricultural designation, not exceeding 1 hectare (including the land of a residential holding located in it): in cities - 6 ares, in towns and villages - 25 ares; 3) area of a land plot of agricultural designation exceeding 1 hectare, a land plot comprised of a water body only, as well as a land plot of forestry designation – 3.5 hectares.3. For a family (a person living alone), which declared its (his/her) place of residence (is residing) in the city, the norm for the area of a land plot of agricultural designation exceeding 1 hectare, a land plot comprised of a water body only, as well as a land plot of forestry designation shall be 6 ares. 4. If land plots held by a family (a person living alone) are of a different designation, the norm for the area of one of the land plots with the highest value shall apply.

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5. For a family (for a person living alone) holding no land plots, the norm for the area of a land plot laid down in Point 2 of Paragraph 2 of this Article shall apply.Article 11. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Calculation of property value norm1. The norm of real property value per family (person living alone) of each type (of a dwelling and a land plot) specified in Article 10 of the Law herein shall be determined by multiplying the norm of real property of a respective type by the average market value of real property of such type declared by the applicant as his/her place of residence (when s/he has no place of residence – by that of the location where s/he resides).2. The average market value of each type of real property specified in Article 10 of the Law herein shall be approved by the Commission for the valuation of property subject to mandatory registration according to the average market value of real property in cities, in towns and villages each year on February 1, May 1, August 1 and November 1.3. The norm of real property value per family (person living alone) shall be calculated by adding up values of real property of both types (of the dwelling and one of the land plots).4. The norm for the value of movable property, monetary funds, securities and shares in partnerships per family (person living alone) shall be calculated by adding up 45 times the state-supported income per family member over 18 years of age (for a person living alone), 30 times the state-supported income per each other family member over 18 years of age and 15 times the state-supported income per each child under 18 years of age. 5. The norm of property value per family (person living alone) shall be calculated by adding up the norm of real property value and the norm of the value of movable property, monetary funds, securities and shares in partnerships.

CHAPTER FIVECALCULATION OF FAMILY (PERSON’S LIVING ALONE) INCOME FOR THE PURPOSE OF OBTAINING MONETARY SOCIAL SUPPORT Article 12. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Family (person’s living alone) income1. For the purpose of allocating monetary social support, income of the family (the person living alone) shall include the following income received by members of the said family (of a person living alone):1) employment-related income;2) royalties;3) pensions and pension benefits, social benefits (with the exception of nursing allowance); 4) dividends;5) interest;

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6) income of an individual company owner, received from the taxable profit of the said company;7) income from individual activity, including income received from engaging in activity under a business licence;8) income from agricultural activity (with the exception of income from gardens of members of gardeners’ associations, with the land plot size under 6 ares);9) allowances for agricultural activity;10) monetary funds received for child (adopted child) support (alimony);11) stipends; 12) income of social nature received on a monthly basis, with the exception of compensations of transportation expenses for invalid and disabled persons, compensations for persons with diabetes and donors, monetary funds paid for child (adopted child) support (alimony). For the purpose of allocating social allowance to a family (a person living alone), income of the family (the person living alone) shall not include either the social allowance received or compensations provided for by the Law herein; 13) severance pay or compensation paid in cases of employment agreement termination;14) severance pay or compensation for a civil servant dismissed from office;15) sickness, birth-giving and maternity (paternity) allowance;16) compensation for pecuniary or non-pecuniary damage (including a one-off compensation for lost ability to work);17) charity in the form of monetary funds, the total amount of which is over 4 times the state-supported income;18) monetary funds received as a gift;19) inherited monetary funds;20) monetary funds received abroad or from a foreign state;21) state compensation for property expropriated for public needs;22) income from property lease;23) wins and prizes in lotteries or other games;24) other actually received income.2. Income indicated in Paragraph 1 of this Article shall be exclusive of the personal income tax and state social insurance contributions.3. Calculated work pay, pay for idle time through no fault of the employee and pay for annual holiday leave, pensions, pension benefits, social benefits, stipends, allowances received on the monthly basis, sickness, birth-giving and maternity (paternity) allowances, as well as other income received on the monthly basis shall be included into the income for those months, for which they have been allocated.4. One-off allowances and monetary funds for child (adopted child) support (alimony) shall be included into the income of those months, during which they have been paid.5. When a specific amount of money has been allocated for the support of a child (children) by the court to and received by to one of the parents, the average amount allocated for the support of a child (children) per month shall be calculated by dividing the amount of money by the number of months remaining until the child (children) turns (turn) 18 years of age.

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6. When certain property is allocated for the support of a child (children), family income shall include income received from the use (rent) of the said property. This income shall be indicated by the applicant himself/herself on the request-application.7. Income from agricultural activity shall be determined according to accounting documents of the said activity. In the absence of such documents, the average monthly income shall be calculated by applying norms for income from agricultural activity approved by the Government or the institution authorised by it, evaluated based on relative costs. If income cannot be determined according to the said norms, the average monthly income shall be calculated by applying the income norm per hectare of agricultural land laid down by the Government or the institution authorised by it.Article 13. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Calculation of income for the purpose of obtaining social allowance 1. Average monthly income of the family (the person living alone) indicated in Article 12 of the Law herein month shall be calculated based on the income for 3 months preceding the month, starting from which social allowance is allocated.2. If the income source of at least one family member (of a person living alone) changed over the month, starting from which the social allowance is allocated, compared to 3 preceding months, the average monthly income of the family (the person living alone) shall be calculated based on the income of the said month. 3. The procedure established in Paragraph 2 of this Article shall not apply if one-off payments (a bonus, a one-off compensation for lost ability to work, a severance pay or compensation paid upon employment agreement termination, severance pay or compensation for a civil servant dismissed from office and other actually received one-off income, with the exception of compensation for unused holiday leave) were received within 3 months preceding the month, starting from which social allowance is allocated.4. If at least one of the family members has no permit of permanent residence in the Republic of Lithuania, and other family members are to be allocated social allowance, the share of income for the said family member shall be subtracted from the average family income per month.Article 14. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Calculation of income for the purpose of obtaining compensations 1. Compensations shall be calculated based on the share of average monthly family (person’s living alone) income per family member (person living alone) who declared the dwelling as their place of residence. 2. Average income of the family (the person living alone) per month shall be calculated based on income specified in Article 12 of the Law herein for 3 months preceding the month, starting from which compensations were allocated. 3. If the income source of at least one family member (of a person living alone) changed over the month, starting from which the compensations are allocated,

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compared to 3 preceding months, the average income of the family (the person living alone) per month shall be calculated based on the income of the said month.4. The procedure established in Paragraph 3 of this Article shall not apply if one-off payments (a bonus, a one-off compensation for lost ability to work, a severance pay or compensation paid upon employment agreement termination, a severance pay or compensation for a civil servant dismissed from office and other actually received one-off income, with the exception of compensation for unused holiday leave) were received within 3 months preceding the month, starting from which compensations are allocated. 5. Compensations for a family (a person living alone) receiving social allowance shall be calculated based on income indicated when last applying for social allowance before the month, starting from which compensations are allocated. This income shall include the amount of social allowance allocated last time. 6. If a number of families (of persons living alone) reside in one dwelling and pay for utilities under one bill (payment book), the total income of family members (of persons living alone) who declared the dwelling as their place of residence shall be calculated by adding up the share of the average monthly family (person’s living alone) income per each of the family members (persons living alone) who declared the family dwelling as their place of residence, after subtracting 90 percent of the amount of state-supported income attributed to them (him/her).

CHAPTER SIXADMINISTRATION OF MONETARY SOCIAL SUPPORT  Article 15. Wording of Law No IX-2217of the Republic of Lithuania of May 4, 2004 (effective as of May 14, 2004) (The Valstybės Žinios, 2004, No 80-2835) Institution administering monetary social supportMonetary social support shall be administered by the municipality of the place of residence declared by the family (the person living alone), and if the family (the person living alone) has no place of residence – by the municipality where the family (the person living alone) is residing.Article 16. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Applying for monetary social support 1. When applying for monetary social support, a family (a person living alone) shall complete a request-application approved by the Government or the institution authorised by it, indicating on it data on the family, activity type of its members, property held and the value of property indicated in Points 6-11 of Paragraph 1 as well as in Paragraph 2, Article 9 of the Law herein, income received, as well as other data required for obtaining monetary social support. A request-application shall be accompanied by statements of income family members (of a person living alone), indicated in Article 12 of the Law herein, received over 3 months preceding the month, starting from which monetary social support is allocated. The accuracy of all data submitted in the request-application shall be confirmed by the applicant’s signature.

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2. A family (a person living alone) shall submit data on the property owned on the last day of the month preceding the month of the request-application submission, indicated in Article 9 of the Law herein, accompanied by supporting documents. These data and documents shall be submitted every 12 months.3. If upon expiry of the period of provision of the granted monetary social support, a family (a person living alone) reapplies for allocation of the monetary social support, it (s/he) shall communicate to the municipality data on changes in the declared property. 4. The municipality shall, according to the methodology developed by the Government or the institution authorised by it, determine the value of the family (person’s living alone) property indicated of Points 1-4, Paragraph 1, Article 9 of the Law herein, and, based of the relative values of agricultural produce approved by the Government or the institution authorised by it, the value of the property indicated in Point 5, Article 9 of the Law herein.Article 17. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Allocation and payment of monetary social support 1. A social allowance shall be granted for 3 months from the first day of the month, during which the family (the person living alone) submitted its (his/her) request-application. 2. Compensations shall be granted for 3 months from the first day of the month, during which the family (the person living alone) acquired entitlement to compensations, no more, however, than for 2 months preceding the month of the request-application submission. 3. Documents required for obtaining monetary social support shall at the latest be submitted before the expiry of the monetary social support payment period.4. When upon the expiry of the payment period of the allocated monetary social support, a family (a person living alone) reapplies regarding its further allocation within 3 months by a request-application and submits new documents and data on family members’ income as well as the income of the family (the person living alone), the monetary social support shall be allocated as of the next month after the expiry of the monetary social support payment period. 5. If upon expiry of the payment period of the allocated social allowance, an application is made later than 3 months from the expiry of the payment period of the earlier allocated social allowance, a social allowance shall be allocated as of the month of the request-application submission.6. A municipality shall have a right to allocate monetary social support for a period longer than 3 months, if family membership and family (the person living alone) income do not change. 7. A municipality shall have a right to allocate monetary social support for a period shorter than 3 months if: 1) there are reasons known for which the family (the person living alone) will loose entitlement to monetary social support during this period, or2) there are changes in circumstances (family membership, income source, upon state or municipal support allocated to the child placed in a care institution, etc.), changes

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in the size of monetary social support. In this case monetary social support shall be reallocated from the next month, with its calculation based on the income of the family (the person living alone) that month.8. Decision by the municipality for allocation of monetary social support shall be taken within a month following the day of receipt of the request-application and all required documents. 9. A copy of the decision refusing the family (a person living alone) allocation of monetary social support shall be sent to the applicant within 5 working days following the day the decision was made. This decision shall contain the reasons for refusing the monetary social support and the procedure for appealing against this decision. Documents submitted by the applicant shall be returned to him/her, and copies of these documents shall be included in his/her file.Article 18. Provision of monetary social support 1. A social allowance shall be provided in one of the following forms:1) in the form monetary funds;2) in the form of services (by purchasing food and other required items, organising meals to adults as well as children, etc.).2. Wording of Law of No IX-2217the Republic of Lithuania of May 4, 2004 (effective as of May 14, 2004) (The Valstybės Žinios, 2004, No 80-2835) After the family (the person living alone) changes the declared place of residence (if it (s/he) has no place of residence – the municipality where it (s/he) is residing), provision of the monetary social support in the initial municipality shall be terminated, upon paying it for the month, during which the family (the person living alone) that was receiving it changed its declared place of residence (if it has no place of residence - the municipality where it resides). The family (the person living alone) shall, according to the established procedure, from the next month apply to the municipality of newly declared place of residence (if it (s/he) has no place of residence – to the municipality where it (s/he) is residing), and the latter shall provide the monetary social support according to the established procedure, not, however, earlier than starting from the next month after the place of residence declared by the family (the person living alone) (if it (s/he) has no place of residence – the municipality where it (s/he) is residing) was changed.3. The social allowance allocated, but not collected on time, shall be paid if the application for it was made within 3 months after the last month the welfare was due for. 4. Compensations shall be provided by municipalities according to the established procedure in one of the following ways:1) in the form monetary funds; 2) by transferring the amount of calculated compensations to current banking accounts of companies providing energy and utility services.5. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)If during the period, for which a family (a person living alone) was provided the monetary social support, the family (the person living alone) lost entitlement to monetary social support or it was detected that the family (the person living alone) had submitted false data on property, income received, family members or other data

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required for allocation of monetary social support, its provision shall be discontinued starting from the next month.6. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)In the case specified in Paragraph 5 of this Article monetary social support shall be reallocated to the family (the person living alone), when the family (the person living alone) returns the monetary social support received illegitimately in the form of monetary funds.7. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)A social allowance shall be paid by the municipality according to the established procedure for each preceding month.8. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)When families (persons living alone) settle with energy (fuel, water) suppliers for central heating of their dwelling or fuel (energy) for dwelling heating, centrally supplied hot water or fuel (energy) for hot water preparation and cold water on a monthly basis, compensations shall be provided by municipalities according to the established procedure for each preceding month.9. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 of Law (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303) When the dwelling is heated and hot water is prepared using solid fuel or another type of fuel, compensations shall be provided by municipalities according to the established procedure either for each preceding month or at once for the entire compensation payment period.10. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)If the social allowance calculated for a family (a person living alone) is under 5 litas, it shall not be paid.Article 19. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Responsibilities and rights of the municipality in administering monetary social support 1. Municipalities in administering monetary social support shall:1) provide monetary social support to social risk families (persons) and problem families in the form of social services, according to the Law on Social Services ;2) allocate social allowances to families (persons living alone) in the form of services when the family (the person living alone) fails to perform responsibilities laid down in Point 4, Paragraph 1, and in Paragraph 2 of Article 22 of the Law herein; 3) allocate compensations in the form laid down in Point 2, Paragraph 4, Article 18 of the Law herein for a family (a person living alone) with debs for dwelling heating, cold and hot water, upon it (him/her) making an agreement with providers of these services regarding repayment of part of their debt on a monthly basis, but for no more than 20 percent of the income of the family (the person living alone);

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4) not allocate compensations, or terminate their payment to a family (a person living alone) with debts for dwelling heating, cold and hot water, when it (s/he) refuses to conclude an agreement specified in Point 3 of this Paragraph or fails to perform it; 5) not allocate monetary social support to a family (a person living alone) failing to fulfil responsibilities laid down in Points 1, 2 and 3, Paragraph 1, Article 22 of the Law herein.2. Municipalities in administering monetary social support shall have a right:1) to use assistance of employable unemployed social support beneficiaries, not participating in active labour market policy measures, according to the procedure established by the Government or the institution authorised by it, in carrying out works for public benefit;2) to make additional interviews of persons who are applying for allocation of monetary social support or in receipt of such support, to check documents submitted by them and to request additional data proving entitlement of the family (person living alone) to monetary social support; 3) to inspect family’s (person’s living alone) living conditions, property held and employment, to draw up a statement on the living environment inspection, based on which the municipality shall take a decision regarding the family’s (person’s living alone) entitlement to monetary social support;4) to allocate from its budget, according to procedure established by it, funds for monetary social support to families (persons living alone) and in other cases not provided for by the law herein (a one-off benefit; a social allowance; to compensate dwelling running costs not listed in the Law, to compensate the cost of the amount of hot and cold water over the norm provided for in the Law herein, as well as higher heating costs of the useful dwelling area; to cover debts for the dwelling, etc.); 5) in the case of unclear points regarding data on the property held and income received submitted in the request-application or in the case of suspicions arising during checking that false data has been submitted or that data have been concealed, to request that family members (a person living alone) declare their property (including income received) according to the procedure for declaration of property by residents established by the law; 6) not to request the family (the person living alone) in receipt of monetary social support to resubmit every 3 months the data that have remained unchanged by the time of reapplication. These data, however, shall be submitted at least once a year.Article 20. Provision of information1. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Legal and natural persons of the Republic of Lithuania shall at the request of persons as well as their family members wishing to receive monetary social support or institutions or bodies providing it within 10 working days from the request receipt day prepare and issue free of charge statements of property held or income received by them.2. State and municipal enterprises, institutions, bodies and organizations shall at the request of municipalities provide to them free of charge information required for allocation of monetary social support.

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3. Municipalities shall, according to the procedure established by the Government or the institution authorised by it, provide the Ministry of Social Security and Labour with data on the monetary social support provided to families (persons living alone) residing in their territory.4. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Municipalities shall, according to the procedure established by the law, ensure confidentiality of data submitted by families (persons living alone) for the purpose of obtaining monetary social support. Article 21. Monetary social support funds1. A social allowance and compensations shall be paid from the special designated subsidy allocated from the state budget for municipal budgets.2. Up to 4 percent of funds dedicated for payment the social allowance and compensations shall be allocated for administering monetary social support.

CHAPTER SEVENRESPONSIBILITIES OF A FAMILY (PERSON’S LIVING ALONE) IN RECEIPT OF MONETARY SOCIAL SUPPORT Article 22. Responsibilities of a family (person’s living alone) in receipt of monetary social support 1. Wording of Law No IX-1912 of the Republic of Lithuania of 18 December 2003 (effective as of 1 January 2004) (The Valstybės Žinios, 2003, No 123-5584) and of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303) A family (a person living alone) in receipt of monetary social support shall:1) using the request-application form approved by the Government or the institution authorised by it, submit complete and true information proving family’s (person’s living alone) entitlement to monetary social support, as well as documents necessary for obtaining monetary social support; 2) at the request of the municipality, declare property held (including income received), according to the procedure established by the Law on Declaration of Property of Residents;3) allow municipal social workers to inspect their living environment conditions, property held and employment; 4) participate in works for public benefit as well as social services programs, organised by the municipality. 2. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Unemployed family members (persons living alone) shall fulfil obligations provided for in individual employment plans drawn up by local offices of the State Labour Exchange (not to reject vocational training or qualification upgrading, an offered job, works for public benefit as well those supported by the Employment Fund, etc.).

CHAPTER EIGHT

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RECOVERY OF ILLEGITIMATELY RECEIVED MONETARY SOCIAL SUPPORT  Article 23. Recovery of monetary social support received illegitimately through the fault of the beneficiaryPersons, having concealed data or submitted false data required for obtaining monetary social support and having, as a result, illegitimately received monetary social support provided for in the Law herein, shall return to the municipality monetary funds equivalent to the illegitimately received monetary social support. If they fail to do so within a month from the day of request from the municipality, monetary funds equivalent to the illegitimately received monetary social support shall be recovered according to the procedure established by the law. Article 24. Recovery of monetary social support paid illegitimately through the fault of the municipality or its officer Monetary social support funds paid illegitimately through the fault of the municipality or its officer shall be recovered according to the procedure established by the law.

CHAPTER NINEFINAL PROVISIONS Article 25. Appeal against a decision of the municipality for allocation of monetary social support A decision of the municipality for allocation of monetary social support may be appealed against according to the procedure established by the Law on Administrative Proceedings.Article 26. Enforcement of the Law herein 1. The Government or institution authorised by it shall, by 1 January 2004, approve the following:1) forms of a request-application for monetary social support, a statement form on the living environment inspection as well as a form for compensation calculation;2) methodology for evaluation of property of the family (person living alone) applying for monetary social support;3) relative values of agricultural produce;4) norms of income from agricultural activity;5) income norm per hectare of agricultural land;6) procedure for engaging persons for works for public benefit.2. The State Commission for Price and Energy Control shall, by 1 January 2004, approve consumption norms of individual energy and fuel types used for dwelling heating and heating cold water.3. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)The Commission shall, for the purpose of evaluating property subject to mandatory registration, approve average market values of real property in cities, in towns and

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villages and shall announce it in the Valstybės Žinios yearly on February 1, May 1, September 1 and November 1.4. Wording of Law of the Republic of Lithuania 2003 m. December 11 of the law No IX-1892 (effective as of 30 December 2003) (The Valstybės Žinios, 2003, No 123-5577) Municipalities shall, by 1 April 2004, establish the compensation payment procedure (compensation payment method, procedure for settling with heat and water supplying companies, procedure for covering the debt to these companies, etc.).Article 27. Wording of Law No IX-2450 of the Republic of Lithuania of 21 September 2004 (effective as of 1 October 2004) (The Valstybės Žinios, 2004, No 146-5303)Legislation rendered invalidUpon this Law going into force, the following shall be rendered invalid:1) 1 Article Subparagraph 6, Article 10 Paragraphs 1 and 2 and Article 11 of the Law on Individual Income Security of the Republic of Lithuania (The Valstybės Žinios, 1990, No 30-711; 1994, No 88-1667);2) The Law on compensation of costs for heating a flat (a detached single-family house) and cold and hot water costs for low income residents of the Republic of Lithuania (The Valstybės Žinios, 1999, No 36-1062);3) Paragraph 1 Subparagraph 3 of the Resolution of the Supreme Council of the Republic of Lithuania on application of the Law on Individual Income Security of the Republic of Lithuania (The Valstybės Žinios, 1990, No 30-712).Article 28. Wording of Law of the Republic of Lithuania No IX-1892 of 11 December 2003 (effective as of 30 December 2003) (The Valstybės Žinios, 2003, No 123-5577) Going into effect This Law, with the exception of Article 26, shall go into effect as of 1 April 2004.I hereby promulgate this law adopted by the Seimas of the Republic of Lithuania. PRESIDENT OF THE REPUBLIC ROLANDAS PAKSAS

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ANNEX 3 (Sample Request – Application Form)

Mark of document receipt registration

First name

Surname

Declared (registration) place of residence; when a person has no place of residence – the municipality where s/he resides

Declaration (registration) date

Actual place of residence

Telephone No

_________________________________________________________________________________(name of the institution/body providing social support)

REQUEST-APPLICATIONFOR MONETARY SOCIAL SUPPORT

____________________ No __________ (date)

Please allocate to my family (me):a social allowance starting from the month of ___________ to the month of ____________. a compensation for dwelling heating cost from the month of ___________ to the month of ___________.a compensation for hot water cost from the month of ___________to the month of ___________.a compensation for cold water and wastewater cost from the month of ___________to the month of ________.

In response to the request of the municipality, I am submitting the information on the dwelling, heating, cold and hot water supply method, equipment for dwelling heating and hot water preparation, required for compensations allocation.

Answer “YES” shall be marked as shown .

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I. DATA ON THE APPLICANTSubmitted personal identification document:

Passport of the citizen of the Republic of Lithuania passport of the Republic of Lithuania Personal identification card Permit for permanent residence in Lithuania Temporary citizen’s certificate

Personal identification code

Series of state social insurance certificate number Person registered with the labour exchange:Social status Employed person in receipt of unemployment (study) benefit Pensioner working in public works

Group 1 invalid person has been registered with the Group 2 invalid person labour exchange for over 6 months Group 3 invalid person A person employable unemployed and Student (pupil) not registered with the labour exchange Raising children Other activity ______________________ at home (please specify)

Working or studying persons must givethe name of their place of employment or of their educational institution; class (year); unemployed persons – date since when they have been unemployed

II. DATA ON FAMILY MEMBERS

Names and surnames of family members who declared the

Applicant’s place of residence as their place of residence

Personal identification

code

Kinship connection(husband, wife,person living together, child)

Nature of activity (working or studying persons must give the name of the place of their employment or the educational institution, class (year), those registered with the labour exchange must indicate the date of registration with the labour exchange and since when they have been unemployed)

Names and surnames of family members who declared their place of residence elsewhere, as well as their address

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When they have no place of residence – names and surnames of family member who declared their place of residence in the municipality

NOTE. Is Your dwelling declared as the place of residence by other than Your family members (another family) Yes No

III. FAMILY PROPERTY

Data on property owned by the right of private ownership on the last day of the month preceding the month of Request-Application submission shall be submitted in Appendices 2-4 every 12 months.If, upon changes in the provision period of allocated monetary social support, a family (a person living alone) reapplies for monetary social support, s/he shall communicate to the municipality changes in the declared property.Persons whose property has undergone changes over the mentioned period (decreased or increased) shall complete those Appendices 2-4 to the Request-Application, according to which the value of the above mentioned property changed.NOTE. Persons who, according to the Law on Declaration of the Property of Residents, have to declare their property and income, shall submit a copy of their as well as their family members’ property and income declaration.

IV. FAMILY INCOME

Income of the family (person living alone) over the last 3 months before the month of application or the month, starting from which social support was allocated: _________________________________________ please indicated the monthsRunningNo

Name of income types Income, LTLMan Woman Children

1 2 3 4 51. Employment related income2. Royalties3. Pensions (old-age, invalidity, welfare, social,

etc.), pension benefits, social benefits (with the exception of nursing allowance)

4. Dividends5. Interest6. Individual company owner’s income7. Income from individual activity, including

income, received from engaging in activity under a business licence

8.. Income from agricultural activity, with the exception of income from gardens of gardeners’ association members, of the area of under 6 ares

9. Received allowances for agricultural activity (direct and compensatory payments)

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10. Monetary funds, received for child (adopted child) support

11. Stipends12. Income of social nature received on a monthly

basis (child allowance, child care (wardship) allowance, allowance for the child of a serviceman in the mandatory military service, etc.)

13. Severance pay or compensation in case of termination of an employment agreement

14. Severance pay or compensation for a civil servant dismissed from office

15. Sickness, maternity and maternity (paternity) allowance

16. Damage compensation (periodic and one-off compensations for lost ability to work)

17. Charity in the form of monetary funds, the total amount of which is 4 times over the state-supported income

18. Monetary funds received as a present19. Inherited monetary funds20. Monetary funds received abroad or from a

foreign state21. State compensation for property expropriated

for public needs22. Income from property lease23. Wins and prizes in lotteries or other games24. Other actually received income

V. ADDITIONAL INFORMATION ON THE FAMILY

Are You applying for social allowance or compensations for the first time? Yes No

If this is your first time, please indicate whether the data on the property submitted earlier by You or Your family changed over the period during which Your family (You) was (were) receiving monetary social support ? Yes NoHave You or has any of Your family members been issued a passport of the Republic of Lithuania? Yes No

Are You or is any of Your family members an individual company owner? Yes No

Do You or does any of Your family members have a business or individual activity licence? Yes No

Have You or has any of Your family members gone abroad during the preceding 3 months? Yes No If so, what was the purpose and duration of your trip? ____________________________________________________

Are You or Your family member farmers? Yes No

Do You maintain agricultural activity bookkeeping? Yes No

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If You have terminated your marriage, is there an agreement regarding child (children) support approved by the court/has child (children) support been adjudicated to the child’s father (mother)? Yes No

Are you a single mother raising children: Has their paternity been acknowledged or determined? Yes No Has the issue of the children’s support been resolved? Yes No

If the application is made for compensations of dwelling heating costs, costs for cold and hot water:Do you have debts for dwelling heating, hot or cold water? Yes No If so, please indicate the amount and period, for which you are indebted __________________________________________________________________________________________________________Have You concluded an agreement regarding the debt for dwelling heating, hot and cold water? Yes No

Is Your family (are You) in receipt of a social allowance? Yes No

VI. ALLOCATION OF SOCIAL SUPPORT Please transfer the social allowance, compensations (please underline the appropriate) allocated to me:

to the bank to the post office to the cash deskBank’s name Name of the bank branch (division) Bank code

Card name

Card number

Personal account number

Post office

VII. LIABILITYI HEREBY CONFIRM that the submitted information is true.

I UNDERTAKE to give a notification within a month on the following:

on arising circumstances (upon granting state or municipal support to a child placed in a care institution, upon moving for residence elsewhere, upon birth or death of a family member, upon concluding or terminating marriage, upon loss of a job or employment, upon change in the invalidity group (extent of ability to work), upon failure to study by a pupil or a student, upon his/her departure for studies in another state, upon the child turning 3 years of age, etc.), as a result which social support has to be discontinued or recalculated;

on moving for permanent or temporary residence abroad.

I AM AWARE AND AGREE:

that concealment of data or submission of false data required for qualifying for monetary social support, as well as overpayment, shall result in the obligation of returning to the municipality funds

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equivalent to the illegitimately received monetary social support or their recovery according to the procedure established by the law;

to declare, at the request of the municipality, property and income according to the procedure established by the Law on Declaration of the Property of Residents;

to allow municipal social workers to inspect living conditions, property held and employment

status;

to participate in works for public benefit as well as social services programs, organised by the municipality;

to provide the institution/body providing social support with information required for obtaining social support.

I HAVE BEEN INFORMED THAT:

upon expiry of the period for provision of allocated social support, an application can be made for allocation of further social support within 3 months by a request-application, submitting new documents on family members and family income;

documents required for the purpose of obtaining monetary social support must be submitted before the expiry of the monetary social support provision period at the latest;

for the purpose of provision of monetary social support, information will be gathered from other institutions on me and my family members as well as data on the social support allocated to me (my family) can be supplied to other institutions;

if I do not agree with the estimated value of real property, I must contact a property valuation company regarding its review, which would evaluate the property according to the procedure established by the legislation of the Republic of Lithuania, governing property valuation, and submit the property valuation report to the person in charge;

if I do not agree with the municipality’s decision regarding allocation of monetary social support, I may appeal to the Administrative Court of the Republic of Lithuania according to the procedure established by the Law on Administrative Proceedings.

I ENCLOSE THE FOLLOWING: Passports, personal identification cards, permits for permanent residence in Lithuania, temporary citizen’s certificates (please underline the appropriate) of adult family members; Children’s (child’s) birth certificates (certificate) or passports (passport) (number of copies enclosed _____); Pensioner’s, invalid person’s certificates (please underline); Statements of declared place of residence (number of copies enclosed _____); Statement-notification of the dwelling owner or his/her authorised persons issued by the declaration institution, on persons who declared the dwelling owned by him/her as their place of residence (copy enclosed _____); Statements of income (of all family members receiving income for 3 months immediately preceding the application or for the month of application for social support) (number of documents enclosed _____); Social insurance certificates of family members (number of copies enclosed _______); Statements on family members who hold social insurance certificates issued by the State Social Insurance Fund Board’s office in the place of residence, saying that state social insurance contributions are not paid (number of documents enclosed _____);

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Statements from the State Social Insurance Fund Board’s office in the place of residence, saying that a person that reached the pensionable age or has been acknowledged as an invalid person, is not entitled to the state social insurance pension (number of documents enclosed _____); Statements from the State Local Labour Exchange (number of documents enclosed _____); Statements from educational institutions, when there are studying children over 16 years of age (number of documents enclosed _____); Land ownership certificates or statements on land held (leased) (number of copies enclosed ____); Documents certifying vehicle acquisition (purchase-sale agreements, agreements of gift) (number of copies enclosed _______); Statement issued by the Medical Social Expert Evaluation Commission on the need for constant nursing by a family member (number of copies enclosed _____); Marriage certificate (number of copies enclosed _____); Death certificate (number of copies enclosed _____); Divorce certificate (number of copies enclosed _____); A court ruling regarding the allocation of the children’s support or an agreement regarding children’s support approved by the court (number of copies enclosed _____); Statement issued by a company, institution, organization or bailiff’s office on the children’s support (number of documents enclosed _____); Ruling whereby the claim for determination of paternity is returned (number of copies enclosed _____); Current banking account or payment card; Book or a bill for payment for services; Statement from another municipality on paid (unpaid) benefits, when family members declare their place of residence in different municipalities (number of documents enclosed _____); other ______________________________(number of documents enclosed _____).

Applicant (signature) (first and last name)

Applicant’s spouse (signature) (first and last name)

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Appendix 1 to the Request-Application for Monetary Social Support

AGRICULTURAL ACTIVITY

Crop and animal produce Area (ha)

by land productivity pointsunder 32 32-35 35-40 40-48 48 and

more

WheatRyeTriticaleSummer cropsWheatBarleyTriticaleBuckwheatLeguminous cropsPeasLupinesTechnical cropsFlaxSugar beetsSummer rape

Vegetables, fruit, berriesPotatoesOpen air vegetablesClosed air vegetablesNon-market gardensMarket gardensNon-market berry orchardsMarket berry orchards

Number (heads, units)Dairy cows

Bee colonies

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PROPERTY

Data shall be submitted once a year on the last day of the month preceding the month of the Request-Application submission

I. REAL PROPERTY 1. STRUCTURES

Designation of the structure Name of the structure Owner’s first name, surname

Address Year of construction

Area,envelopevolume

Registered Unregistered*

Buildings of residential designation (including those of uncompleted construction and under reconstruction)

Buildings of non-residential designation (including those of uncompleted construction and under reconstruction)* Users of unregistered property must complete additional Table 3.

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2. LAND(INCLUDING THAT COVERED BY FOREST)

NameOwner’s

first name, surnameAddress Area (ares)

Land plot of a residential holdingLand plots of non-agricultural and non-forest designation Garden plots of gardeners’ association membersLand plots of agricultural designation, including inserts of forests and water bodies (with the exception of garden plots of gardeners’ association members)Land plots of forestry designation and forests in land plots of agricultural designation

3. ADDITIONAL DATA TO BE SUBMITTEDBY USERS OF UNREGISTERED PROPERTY

Name DataNumber of building levels numberWall material Classifier of the Commission’s

Table 1 Level of completion %

Water supply* Available/Not availableSewage* Available/Not availableHot water* Available/Not availableHeating* Stove, available /otherGas/electric stove* Available/Not availableDormitories and other premises with common use areas*

Yes/no

Average market value

In Litas

* to be indicated only by families (persons) living in flats .

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Appendix 3 to the Request-Application for Monetary Social Support

II. MOVABLE PROPERTY

1. VEHICLES AND AGRICULTURAL MACHINERY

Name of a car (motocycle, motobike, etc., or agricultural machinery)

Make and model or make

Engine power.

HP or kw

Working volume,

in thousand cm3

Year of manufact

uring

Averagemarket value,LTL

In total X X X XNOTE. If listed parameters of the vehicle and agricultural machinery cannot be indicated, only their average market value is to be specified.

2. DOMESTIC ANIMALS, BIRDS, FUR ANIMALS, BEE COLONIES

Name Amountvnt.

CattleCowsSire bullsPregnant heifersCalves under 1 yearCalves over 1 yearsPigsSowaSire boars PigletsFattening pigsSheep, goatsHorsesBirdsHensDucksGeeseTurkeysFur animalsRabbits, nutriaOtherBee colonies

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IV. SECURITIES, MONETARY FUNDS, OTHER PROPERTY

Property type Property value,

LTL

1. Securities, if their total value exceeds 2000 LTL:

Shares

Bonds

Debentures

Other securities

Shares in partnerships

2. Works of art, jewels, jewellery, precious metals, of the value per item exceeding 2000

LTL

3. Monetary funds held in banks as well as other credit institutions and outside banks as

well as outside other credit institutions, if their total amount exceeds 2000 LTL

4. Other property:

Received (not repaid) loans, if their total amount exceeds 2000 LTL

Monetary funds loaned to other persons (not repaid), if their total amount exceeds 2000

LTLAny other property not listed in Points 1-7 of Article 9 of the Law, acquired by the right of private ownership within 12 months immediately preceding the month, starting from which monetary social support was allocated, if the value of its one unit (set) exceeds 2000 LTL

Value of the property or part thereof, specified in Points 1-8, Paragraph 1, Article 9 of the

Law, transferred into the ownership of another person over the period following the last

submission of data on the property held, which is not indicated as new property acquired

into the ownership or monetary funds received.

NOTE. Supporting documents confirming property acquisition are to be enclosed.

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Annex No. 4Eligibility of a family (single individual) to a social benefit

Before 1 April 2004 From 1 April 2004When average earnings of a family (single individual) over the latter 3 months are less that the state-supported income per family (single individual)

When the value of family’s (single individual’s) property does not exceed the regulatory value for property

If family members meet any one of the conditions below:Employed family members

ARE EMPLOYED UNDER EMPLOYMENT CONTRACTS AND OVER A PERIOD 3 MONTHS HAVE WORKED AT LEAST 2/3 OF THE MAXIMAL DURATION OF WORKING TIME AND WAGES ACCOUNTED FOR THEM HAVE NOT BEEN LESS THAN THE MINIMAL WAGE PER HOUR OR PER MONTH PRO RATA TO THE TIME OF WORK OR PERFORMED JOBS.When members of the family, which was not eligible for the benefit, get employed, the right into the benefit appears after a complete calendar month of employment. The benefit shall be awarded, if wages accounted for such employed family members over that month were not less than the minimal wage payable per hour or per month pro rata to the time of work or performed jobs.

are employed and over a period 3 months have worked at least 2/3 of the duration of working time fixed in the Labour Code, while wages accounted for them have not been less than the minimal wage per hour or per month pro rata to the time of work or performed jobs.If within a 3 months’ period before application for the social benefit, the person is given holiday without pay for the second time per year or it is found out that the employee did not appear at work for the second time per year and thus was disallowed payment of wage or social insurance compensation, the social benefit shall not be awarded.

OWN OR RENT A FARM (FROM 2 TO 3,5 HECTARE) AND 3,5 HECTARE) AND ARE EMPLOYED AT AM AGRICULTURAL COMPANY OR HIRED BY A FARMER UNDER AN EMPLOYMENT CONTRACT, WHEN THEIR WAGES OVER A PERIOD OF 3 MONTHS WERE NOT LESS THAN ONE MINIMAL WAGE PER MONTH.

Unemployed family membersSTUDY ON A FULL-TIME BASIS AT EDUCATION/TRAINING ESTABLISHMENTS.

study on a full-time basis at education/training establishments for the period until they reach 24 .

are retired individuals or at the statutory age of old-age pension.

are at the statutory age of old-age pension.

are disabled (within 1st, 2nd, 3rd disability groups) are individuals within 1st and 2nd disability group.are on professional military service (with the exception of compulsory military service)

are unemployed individuals paid unemployment benefit or training benefit for a period of studies.

are unemployed individuals paid unemployment benefit or training benefit for a period of studies.

are persons registered with the state territorial labour exchange and engaged in public works or jobs supported by the Employment Fund under a contract entered for a 2 months’ or longer period.are unemployed individuals registered with the state territorial labour exchange and the period of payment of unemployment benefit (training benefit during the period of studies) has expired, contract entered for a 2 months’ or longer period for public works or jobs supported by the Employment Fund has expired without unemployed person’s will. The benefit shall be awarded and paid for a period not exceeding 6 months after termination of unemployment benefit (training benefit during the period of studies), expiration of the contract for public works or jobs supported by the Employment Fund. The benefit shall not be awarded (shall be cancelled) upon repeated registration with the labour exchange in cases of refusal of the offered job, training courses, public works or jobs supported by the Employment Fund.

have been registered with the state territorial labour exchange as job-lookers for the period of 6 months or more.

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have been registered with the state territorial labour exchange and paid unemployment benefit, when the period remaining until the old-age pension is less than 2 years.

take care of a family member or a relative of his/her own or of the spouse (father, mother, brother, sister, grandparents), who needs permanent care.

take care of their own child (foster-child or ward), father, mother, spouse, sister, bother, grandparents, where necessity of permanent care (assistance, nursing) has been established in the statutory procedure.

undergo in-patient treatment at healthcare establishment for a period of 1 month or longer.

are pregnant (remaining time until birth-giving is 70 calendar days).

are pregnant and the remaining time until birth giving is 70 calendar days or less (28 pregnancy weeks or more have matured).

mother (or father when the mother is absent or due to sound reasons – illness, disability, sentence serving, etc. – is unable to take care of the child) is growing a child under 14 and has been working for at least a half of the maximal working time over a 3 months’ period.mother or father (foster-mother/father) is growing at home a child under 3, who doesn’t go to pre-school education establishments.

mother or father (guardian or foster-mother/father) is growing at home a child under 3, who doesn’t go to pre-school education establishments.

mother (or father when the mother is absent or due to sound reasons – illness, disability, sentence serving, etc. – is unable to take care of the child) with 3 or more children under 16 is growing at home at least one child under 8, who doesn’t go to pre-school education establishment or school.

mother or father (guardian or foster-mother/father) is growing at home at least one child under 8, who doesn’t go to pre-school education establishment or school, when the family has 3 and more children under 14 and when the children are properly taken care of.

mother (or father when the mother is absent or due to sound reasons – illness, disability, sentence serving, etc. – is unable to take care of the child) is growing a disabled child.mother (or father when the mother is absent or due to sound reasons – illness, disability, sentence serving, etc. – is unable to take care of the child) is growing at home a preschool child under 8, who doesn’t go to a pre-school education establishment by a doctor’s recommendation or because there is no pre-school education establishment or it is unavailable in the locality of residence.

mother or father (guardian or foster-mother/father) is growing at home a preschool child under 8, who doesn’t go to a pre-school education establishment by a doctor’s recommendation or because there is no pre-school education establishment or it is unavailable in the locality of residence.

mother (or father when the mother is absent or due to sound reasons – illness, disability, sentence serving, etc. – is unable to take care of the child) is growing at home a child under 16, when the family owns or rents a farm (total area of farming lands from 2 to 3,5 hectares).children from 16 to 18 are:

- employed (without application of any restrictions);- studying at full-time department of

training/education establishments;- registered with the state territorial labour exchange

(without application of any restrictions);Additional conditions

For land holdersNo benefit is warded in case the possessed land lot exceeds 3,5 ha.

No restrictions

Divorced and unmarried persons with childrenDivorced family member growing the child is awarded benefit, if a court has awarded alimony to the child or ex-spouse pays it personally and such alimony is not less than 1 MSL per child per month.

Dissolved or separately living spouses growing children (child) under 18 shall be awarded benefit, if they have entered into a child (children) maintenance agreement approved by a court or maintenance of the child (children) has been awarded by a court.

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Unmarried individuals, who alone grow children under 18, shall be awarded benefit, if their children have affiliation or recognized paternity and maintenance of the child (children) has been awarded by a court, with the exception of cases when identification of the father (mother) is impossible and courts cannot award maintenance of the child. The benefit is awarded during affiliation proceedings in the court.

Persons employed on an individual basisBenefit is disallowed, if at least one family member is the owner of an individual (personal) enterprise or a holder of a business license.The right into the benefit appears, if the enterprise is not operating and the owner of the individual (personal) enterprise satisfies the stipulated requirements (has registered with the labor exchange).

Owners of individual (personal) enterprises with a status of companies under liquidation shall be eligible for social benefit, if they meet the imposed requirements (work or don’t work due to the mentioned reasons).

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Annex 5. Activities of the MSSL in areas of staff training and qualification

* Activities of the MSSL in creation of employees’ qualification system. The MSSL is not directly responsible for training and qualification improvement of persons employed with social assistance units (centres). It is the concern of municipalities. Yet, the MSSL initiated the creation of the system of qualification improvement for persons employed in the field of social work. Creation of the system was started in 1998, but the system did not focus on or distinguish improvement of knowledge and skills of persons dealing with cash social assistance, emphasising instead providers of social services. In accordance with a special programme approved by the MSSL and with the funds assigned from the state budget, all employees of municipal social service agencies and social assistance units without qualifications of social workers attended 4 weeks’ courses and then obtained a right to apply to the attestation commission of social workers to be conferred upon the category qualifying for a social worker. This stage called the initial attestation was finished and now procedure for regular attestation of social workers and development of requirements imposed on their qualifications are in progress.

* MSSL activities related to consulting of staff from municipal social assistance units in a line with adoption of new laws. Training initiated by the MSS is held in cases when new laws are to be adopted or there appear questions relevant to a number of municipalities with regard to cash social assistance. Before adoption of the new LCSA, pre-implementation measures were taken in advance. At the end of 2003, in the biggest cities MSSL arranged seminars on application of the law for managers and staff members of municipal social assistance units and centres to introduce novelties incorporated in the LCSA and principles of implementation thereof, to discuss drafts of secondary legislation. Minister’s address to the mayors of municipalities was prepared to attract attention to required preparedness for implementation of the law, i.e., to improve work organisation of social assistance units in municipalities, if necessary, to set forth extra staff, to equip the units with hardware, to carry out certain preliminary work, to inform population about the new statutory requirements. Later on, one more Minister’s address to the mayors of municipalities was prepared to inform on the drafted implementation plan for the LSCA and to recommend each municipality to make up its own implementation preparedness plan and to ensure (upon application of the new law) necessary conditions for workers of the social assistance units (centres) involved in performance of this state-dcelegated function and for population applying for due social assistance.

Representatives from some authorities related to payment of the SB or Compensations were invited to attend the training arranged by the MSSL (representatives from the State Prices and Energy Control Commission, State Enterprise Registrų Centras (Centre of Registers), Nevda UAB).

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Annex 6. Training to municipal staff as a result of EU PHARE Twinning project

In order to share out recommendations of experts of the EU PHARE Twinning project ‘Social Assistance Reform and Implementation of Acquis Requirements’ and experience of pilot activities in piloting municipalities to all municipal social assistance units, the MSSL organized seminars to the managers of municipal social assistance units. Managers of 4 piloting municipalities presented changes implemented in their municipalities, observations and recommendations worth paying attention to when starting rearrangements.

At the seminars there was presented experts’ new method of work organization (division into customer service and benefit award subunits) and recommendations to implement it at municipal social assistance units. This method was piloted at 4 piloting municipalities directly involved in implementation of the PHARE twinning project. Advantages of the new models are not limited to improved quality of customer service (paying more attention to the customer), improved quality of unit’s work (staff members can concentrate on performance of a particular function), more efficient utilization of the existing human resources without increasing the number thereof, but also represent possibilities to ensure control of reviews of applications of persons applying for benefits, reduced cases of abuse (both internal and external).

In addition, within such organisation of work, it was recommended to introduce rotation of the staff members (they can periodically exchange their functions), what in its turn would reduce probability of fraud and errors, help employees to maintain their earlier skills, develop wider approach to activities of the unit, etc. Application of the rotation principle allows maintenance of knowledge and skills required in this work.

Social assistance units at bigger municipalities were recommended to establish separate Information subunits in the space of reception or near it. This subunit should employ information staff, which would deliver verbal information and informative documentation (as requested). According to the experts, each municipal unit should have at least one information staff member responsible for handling of customer information flows. In smaller units, this could be a part of regular daily round. Information experts should be also responsible for handling and updating of all information booklets/leaflets.

Municipalities were offered to pilot a model of formation of one-beneficiary file, where all information about benefits paid to a family could be found in one file. This allows avoiding copying of the same documents, reducing paper input, saving personnel’s time, shortening customer service time, significantly reducing the number of files (it is easier to find a desirable file), keeping more accurate accounting of beneficiaries. For the time being, quite many municipalities pilot this practice.

The MSSL together with the Social Workers Training Centre held training on ‘Customer service and assessment of their financial standing’ for personnel of municipal social assistance units to introduce them to efficient ways of interviewing applicants and assessing their financial standing.

Training was also held for staff members of social assistance units on ‘Classification of applicants for social assistance by the risk of deception’. The objective of this course was to introduce participants to the processes of minimising cases of abuse in the social assistance system to the acceptable level and to launch methods contributing to minimisation of errors and fraud (internal and external) in assigning of social benefits. Tasks:

- to launch the forms to be filled in within the risk management process, risk management process itself, risk profile matrix;- to train professionals to apply risk profiling to applicants; - to introduce professionals to interview planning and methods as well as to the decision making procedure.Training participants were handed three-part methodology on risk management, active file handling and information management, as developed by the experts. It is an explanatory instrument designated to assist municipalities in their efforts to classify files by risk factors, carry out control of benefits and more effectively identify and reduce cases of abuse.In addition, municipalities were handed Income Identification Methodology developed by the experts. It is an explanatory instrument for professionals dealing with income identification and making decisions on social assistance awards.

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After attending relevant courses, representatives of all municipalities were expected to share their knowledge with other staff of social assistance units and to initiate implementation of the recommendations at their municipalities. However, as we can see from the survey carried out in 20041, just few municipalities have made use of such knowledge and endeavoured to apply them so far.

. Annex 7. Pupils’ free meals programme (further “FM”) functions from 1995 and is designated for free-of-charge catering of pupils from low-income families at all types of comprehensive schools. The programme is funded from the state budget (before 1997, the programme was funded from municipal budgets). The funds are used for acquisition of foodstuffs only, while transportation, preparation of foods is additionally funded from municipal budgets. The MSSL is responsible for allotment of funds assigned from the state budget for free-of-charge meals of pupils and transfer of such funds to the founders of comprehensive schools.

11 Evaluation of implementation of the recommendations of the Phare Twinning Project Consensus III. Research report. Institute of Labour and Social Researches, 2004.

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In 2004, in excess of LTL 60 million were assigned for free-of-charge meals of pupils, what accounted for about 70 per cent, comparing to expenditure for social assistance, or for about 80 per cent, comparing to compensations for heating and hot water. This is a significant assistance for families in need and their children.

The service of free-of-charge meals is enjoyed by 27-28 per cent of total schoolchildren on the average.

FM is regulated by “The procedure of organisation of free-of-charge meals for pupils from low-income families at comprehensive schools”, as approved in 1999 by orders of the MSSL and the Ministry of Education and Science. In compliance with the mentioned procedure, the school founders approve the procedure of organisation of free-of-charge meals for pupils at schools under their subordination. This procedure also serves as a basis for defining persons responsible for free-of-charge meals for pupils, submission of documents needed for assignment of free-of-charge meals, evaluation of family’s income, accounting of free-of-charge meals and reporting about the utilised funds by schools, etc.

This procedure specifies that free-of-charge meals shall be awarded to families with income less than 1,5 state-supported income per family member (LTL 202), concurrently leaving the right to municipalities to award FM in other cases when they deem it reasonable.

Form of FM: lunch, breakfast and lunch for children from very poor families and children catering at summer camps.

The ration of free-of-charge meals per pupil:For lunch – up to LTL 3, for breakfast – up to LTL 1,2 at full-time comprehensive schools and up to LTL 7,5 at school summer camps. In order to be awarded free-of-charge meals, pupils’ parents (other persons raising the children) shall submit the following documents to the school management:- application;- certificate of family composition;- verification(s) of family’s income and sources thereof.Unemployed parents shall submit in addition the state social insurance cards (if such are absent, certificates confirming non-payment of state social insurance contributions issued by the Board of the State Social Insurance Fund (branch servicing the applicant’s place of residence)); families receiving social benefits shall submit the application and verification of being social beneficiaries, as issued by the Social Assistance Unit; other documents entitling into free-of-charge meals.

Normally, a social pedagogue is responsible for organisation of free-of-charge meals at school. S/he collects necessary documents from the children, keeps accounting of FM beneficiaries, provides with information about the need of FM for the next year. FM is assigned for pupils and family’s income is tested at the beginning of a calendar and academic year, taking the earnings of family members for the last 3 months before the date or month of application to award free-of-charge meals. In some

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individual cases, if financial situation of the family gets worse, free-of-charge meals may be assigned for the pupils in the course of the academic year, while schoolchildren where financial standing in the family remains the same are assigned free-of-charge meals for the whole academic year.

Free-of-charge meals for pupils in the families holding personal farms exceeding 3,5 ha shall be assigned on the decision of the school administration. The need of such pupils for free-of-charge meals is established basing on the household testing report made by the social worker after testing the household conditions in such family.

Before 1 December of a current year, the founders of schools (i.e., municipalities, counties, Ministry of Education and Science) shall provide the MSSL with the need for funds required to organise free-of-charge meals for pupils at comprehensive schools under their subordination in accordance with the particular form.

Taking into consideration the submitted needs and social-economic situation of each municipality (number of social beneficiaries, unemployed individuals, families with many children, etc.), the MSSL shall allot to municipalities, counties, Ministry of Education and Science the funds of the state budget assigned for FM of pupils for each calendar year and transfer such funds on a monthly basis in accordance with the approved estimates. Municipalities, counties, Ministry of Education and Science shall distribute such funds and transfer them to comprehensive schools under their subordination in accordance with the number of pupils for whom free-of-charge meals are awarded. Municipalities, counties, Ministry of Education and Science shall report on the utilisation of the funds assigned for FM to the MSSL on a monthly basis and quarterly in accordance with the fixed reporting form.

In future, it is planned to turn to a uniform system of income and property evaluation for assignment of the whole social assistance, FM including.

With a view to guaranteeing purposive utilisation of state budget funds and providing meals of full nutritional value to pupils from low-income families, the Ministry of Social Security and Labour developed the Draft Law on Social Support to Pupils in Schools of General Education regulating social support to pupils from low-income families and proposing that state budget funds are used for purchasing foodstuffs for the purpose of providing free meals. Contribution of municipalities to organisation of free meals for pupils from their own budgets will increase their responsibility and motivation to guaratee more effective organisation of social support allocated to pupils. Social support to pupils will be allocated both, on the basis of assessment of families’s income and property, assigning the function of allocation of social support to municipalities engaged in administration of social support to low-income families. At present, assessment of income of families is carried out in schools. Free meals to pupils will be provided on the basis of the list products necessary for preparing meals for breakfast and dinner by age groups of pupils thereby guaranteeing that pupils are provided with meals of full nutritional value. Moreover, it is proposed to introduce a new type of social support- provision of pupils with indispensable individual teaching aids. Each pupil will provided with specially formed sets of individual teching aids, in observance of the number of pupils

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growing in the family and teaching aids they have. The proposed price per set for one pupil does not exceed 120 per cent of MSL. Enforcement of the aforementioned Draft law is envisaged on 1 September 2005.

Annex 8. Compensations of housing heating, cold water, wastewater and hot water costs (further – “the Compensations”) represent one of the types of cash social assistance for low-income families (single individuals).

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Compensation program as well as the SB program is the tested social assistance program regulated by the same SCSA law. Following this law, municipalities are obligated to make up the procedure for payment of compensations (method of payment of the compensations, procedure of payment for suppliers of heating and water, procedure for covering of debts to these companies). Therefore, the very procedure of payment is different in different municipalities. Before the year 2004, payment of the compensations was regulated by the Law of the Republic of Lithuania on the Compensation of Heating, Cold and Hot Water Costs of a Flat (Individual Residential House) for Low-Income Individuals (1999). The new law did not change the size of the Compensations: a family shall pay max. 2 percent of its income for cold water and max. 5 percent for hot water, while excess costs are compensated. For heating during the heating season, a family shall pay max. 25 per cent of its income (this income is calculated as the difference between the family income and the state-supported income, as is the case with the SB). The law defines the regulatory norms for likely water consumption per family (1,5 m3 of hot water and 2 m3 of cold water), standards of useful living area per family for which heating compensation shall be calculated (Annex 2, Art. 6-8). Families always pay within the limits of the set forth values, regardless to any growth in prices for energy and utility services.

In compliance with the SCSA, the right into the Compensations is linked to family’s income and property (the latter was not taken into consideration upon assigning of the Compensation in accordance with old law).

Municipalities are left the right to compensate higher costs for consumed water (compared to the standard) out of their budgets’ funds.

The Compensations are assigned in the same procedure as are the SB, applying the same application forms. The whole procedure of applying for the Compensations is analogue to that of the SB. However, all what municipal social assistance units have to do it to make all the documents needed for the Compensation ready and then forward them to a utility company, which calculates the size of the Compensation due to the family. After that the utility company submits the administration of the municipality a report on its expenses suffered because of the assigned Compensation, and the municipality shall transfer the money to the company. As the municipal social assistance unit only makes the documents ready for the Compensation, but does not award the Compensations itself, it does not dispose of information as to the actual number of persons awarded the Compensation. So far, official statistics have been containing information only about municipal expenditure for the Compensations, but not as to the number of the beneficiaries thereof.

The program of Compensations is quite significant in terms of the size of expenditure and the number of beneficiaries. Every year spending for the Compensations is by about 10 per cent more than it is for the SB: in 2003, funds paid down for the Compensations were by 10 per cent more compared to the SB; in 2004 – by 6 per cent less compared to the SB (see annex 1). As it was mentioned before, the number of beneficiaries is not reflected in official statistics; therefore it is difficult to figure the average size of this Compensation per family. (According to the MSSL, during the heating season in 2001, the Compensations were paid to about 470 thousand families;

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the average size of the Compensation per family was LTL 209 per heating season that normally lasts for 6-7 months)1.

Annex 9. METHODOLOGY FOR CALCULATING THE AMOUNT OF FUNDS TO PERFORM THE FUNCTIONS OF THE STATE (HANDED OVER TO MUNICIPALITIES) Order No. 1K-268 of 15 July 2004 of the Minister of Finance of the Republic of Lithuania.

11 Social report. The Ministry of Social Security and Labor, 2001, page 109.

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I. GENERAL PROVISIONS

1. Methodology for calculating the amount of funds to perform the functions of the state (handed over to municipalities) of the State Budget of the Republic of Lithuania (hereinafter referred to as the Methodology) sets forth the ways for calculating what funds in the state budget are needed for the functions of the state (handed over to municipalities.)

VI. CALCULATION AND PAYMENT OF SOCIAL BENEFITS AND REIMBURSEMENTS

23. The funds set forth for the allowances established by the Republic of Lithuania Law on Children Benefits (Official Gazette, 1994, No. 89-1706; 2004, No. 88-3208), for the funeral allowance as provided for by the Republic of Lithuania Law on Support in Respect of Death (Official Gazette, 1993, No. 73-1371), for coverage of the social allowance and reimbursement of dwelling heating, cold water and waste water expenses and hot water expenses as set forth by the Republic of Lithuania Law on Social Assistance to Families with Low Income (Persons Living Alone) (Official Gazette, 2003, No. 73-3352) shall be calculated in respect of every type of social benefit and reimbursement using the basic amount of funds and the Model of Forecasting the Need of Funds for Social Assistance as developed by the Ministry of Social Security and Labour and in line with the following procedures:

23.1. the basic amount of funds shall be established as an average amount of funds for a relevant social benefit and reimbursement over the last three years prior to the current budget year when the calculation takes place;

23.2. the forecasted need of funds shall be established using the Model of Forecasting the Need of Funds for Social Assistance;

23.3. the coefficient of the need of funds reflecting the change in the forecasted need of funds as compared to the basic amount of funds shall be established by dividing the forecasted amount of the need of funds by the basic amount of funds;

23.4. the amount of the coefficient of the need of funds shall be assessed on an expert level and the coefficient of the need of funds suitable for calculations shall be established by taking into account its amount and the following determinant factors:

23.4.1. when calculating the coefficient of the need of funds for children benefits it is recommended to conduct the analysis of dynamics in the number of children who have received the benefit and the causes of the changes covering several years. Taking into account the analysis a forecast of the number of children shall be made for the upcoming year. It is also requisite to take into account the changes in the legal acts (introduction of new or abolition of existing benefits, the changes of the coefficient of the benefit amount, etc.);

23.4.2. when calculating the coefficient of the need of funds for a single benefit for acquisition of a housing unit or moving in, it shall be recommended to use the data stored at the municipal institutions on the children without parental care who are to become 18 years old on the year of forecast;

23.4.3. when calculating the coefficient of the need of funds for a funeral allowance it shall be recommended to conduct the analysis of the dynamics of the number of the persons whose death resulted in the payment of the benefit and the causes of these changes covering several years. Taking into account the analysis a forecast of the number of these persons shall be made for the upcoming year;

23.4.4. whereas the amount of social benefits established by the Republic of Lithuania Law on Children Benefits and the Republic of Lithuania Law on Support in Respect of Death depends on the amount of the Minimum Level of Living (hereinafter referred to as MLL), upon approval of the new MLL amount the coefficient of the need of funds shall be calculated with regard to the indexated amount of MLL;

23.4.5. when calculating the coefficient of the need of funds for the payment of a social allowance and reimbursement of dwelling heating, cold water and waste water expenses and hot water expenses it shall be recommended to take into account the factors determining the amount of the coefficient: the distribution of families drawing social allowance or reimbursement by parental employment, the number of children in a family, the number of one-parent families, predicted unemployment coefficient and the number of long-term unemployed, the number of decisions made against allocating social assistance because of the property greater than established disregarding any other fulfilled social assistance eligibility requirements, changes in the income of residents and minimal amounts, regional social and economic developments and changes in legislation (new

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eligibility requirements for the entitlements to allowances or reimbursements are set forth, the coefficient of the amount of allowance or reimbursement is amended, etc.);

23.5. the need of funds shall be established by multiplying the basic amount of funds from the amount of the coefficient of the need of funds established by expert evaluation;

23.6. after calculating the amount of the need of funds the tables referred to in Annexes 1 and 2 of the present Methodology shall be composed for every type of social benefit and reimbursement;

23.7. up to 4 per cent of the need of funds for all social benefits and reimbursements shall be earmarked as administrative expenses of social benefit and reimbursement management directly related to calculation and payment thereof.

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Calculation methodology for performance of the functions of the state (handed over to municipalities) Annex 1

INDICATORS OF THE NEED OF FUNDS FOR SOCIAL BENEFITS AND REIMBURSEMENTS CALCULATED FOR THE UPCOMING BUDGET YEAR1

Name of a social benefit and

reimbursement

Number of paid out social benefits and reimbursements per

year, units.

Average monthly amount of a social benefit and

reimbursement, LTL

Actual expenses (including debts and expenses calculated but not paid over the current

year), thou LTL

Coefficient of the need of funds (point

23.4 )

The need of funds for the

upcoming year (point 23.5 ),

thou LTL1 2 3 4 5 6 7 8

200.. 200.. 200.. 200.. 200.. 200.. 200.. 200.. 200.. 200.. 200.. 200..

1 a) The last three years prior to the current budget year are indicated in the columns 2, 4 and 6 of the table;b) the upcoming budget year for which the need of funds is planned is indicated in columns 3, 5 and 8 of the table;c) in the cases where the coefficient of the need of funds indicated in column 7 of the present table is higher or lower than 1, the grounded calculations of the coefficient of the need of funds are enclosed with the present table specifying the factors influencing the changes and amounts of the need of funds.

______________Calculation methodology for performance of the functions of the state (handed over to municipalities) Annex 2

DATA ON THE AMOUNT OF THE NEED OF FUNDS FOR SOCIAL BENEFITS AND REIMBURSEMENTS AND USE THEREOF FOR THE YEAR PRECEDING THE CURRENT BUDGET YEAR (YEAR 200.. )

The need of funds submitted with the Ministry of Social

Security and Labour drafting the state budget plan,

thou LTL

Actual expenses (including debts and

funds calculated but not paid over that year),

thou LTL

Amount of unused funds,

thou. LTL

In cases where the funds were not used (column 3), please, indicate what needs were chosen for financing with the unused funds

1 2 3 = 1 – 2 4

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Annex 10. Questionnaire TO THE MUNICIPAL SOCIAL ASSISTANCE CENTRE

The aim of the questionnaire is to gather information about the organisation of payment of social benefits in municipality. Please note, that we are interested only in information related to Social Benefit (SB) granted under the Law on Monetary Social Assistance to Families (Single Persons) with Low Income. A. Name of Municipality. …….………..…..… B. Code ______ …Number of Neighborhoods ______

C. How many beneficiaries approximately get social benefit in your municipality per month: 1. The number of newly applying families…………….. 2. The number of persons in them …. 3. The number of repeatedly applying families………… 4. The number of persons in them …. 5. Total number of families……………… 6. The number of persons in them ….

D. C. What is approximate part of recipients of social benefit that receives this benefit on the exceptional grounds, that is by the decision of municipality (because they dissatisfy the general entitlement requirements established by law)? 1. Total number of families that were granted a SB in municipality in 2004…………. 2. Of them the number of families that received this benefit on the exceptional grounds in 2004….

E. Social benefit beneficiaries compare to the total number of all beneficiaries of social assistance cash benefits (in percent) in 2004 .................... F. D. Does the payment of social benefit is organised at one place (that is in the centre or likewise) or a part of functions is deputed to neighbourhoods? 1. Everything is administered at one place, in the centre, division2. A part of functions is deputed to neighbourhoods

G. Was any training in the last 2 years for workers: 1 computer training a) yes, how many hours ………… b) no 2 training related to Social benefit implementation a) yes, how many hours ……. … b) no

H. Staff in the end of 20041. The total number of workers of Social assistance centre (division) in the end of 2004 ……….

Including:2. The number of workers who are directly involved in organisation of social benefit payment (including all who perform at least one function in allocating, processing, monitoring, payment of this benefit, etc.), in the end of 2004 ………………..

3. The number of neighbourhoods’ workers who do not belong to the Centre’ staff but work in neighbourhoods with the recipients of social benefit, in the end of 2004 …………………….

J. The number of Social assistance centre’ (division’) staff which is involved in payment of SB and working time which is spent on the organization of social benefit in the end of 2004 Staff groups Number

of staffThe part of working time which is spent only on the matters that are connected with SB, per day on the average (in percent)

Monthly wage on average, in Lt (of 1 worker

1. Managers, deputy heads Brutto ………Netto ………..

2. Chief specialists Brutto ………Netto ………..

2. Senior specialists Brutto ………

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Netto ………..

3. Specialists Brutto ………Netto ………..

4. Workers/ Specialists in Neighbourhoods

Brutto ………Netto ………..

5. Other with the matters of SB related specialists (that are not included in the above mentioned list) write down…………………………

Brutto ………Netto ………..Brutto ………Netto ………..

K. Maybe there are some specialists that are involved in the matters of social benefit but they are not included in your division’ (subdivision) staff. In case of it, provide information about them beneath:

Staff groups Number of staff

The part of working time which is spent only on the matters that are connected with SP, per month on the average (in percent)

Monthly wage on average, in Lt (of 1 worker

1. Computing specialists Brutto ………Netto ………..

2. Accountants or others (write down).........................................

Brutto ………Netto ………..

L. Other expenditure on the organization of social benefit payment in 2004

1 Expenditure on procurement of programs required for social benefit record (Care (Globa), Support (Parama), Property (Turtas), NEVDOS services etc., per year in Lt …………….

2. Travel expenses required to home visits (conduct the examination of family’s living conditions and fill the household inspection certificate), per year on the average, in Lt 3 Other travel expenses related with the matters of social benefit, per year on the average, in Lt (if there are such expenses) …………………………………………

……………..

……………..4. The number of computers that are utilized for the matters related with the processing of data on social benefits:

5. In your estimation, how many computers in whole you need in order to manage the matters of social benefits payment effectively and with expedition

At the centre …….In neighbourhoods ……At the centre …….In neighbourhoods ……

6. Average expenditure required for the maintenance and servicing of computers, per year in Lt 7. Expenditure required for assuring access to data bases (for SP needs), per year in Lt 8. Average expenditure on staff (working with social benefit) training, per year in 2003- 2004 Lt Expenditure on SP payment, per year in LT:

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9. Then payment is executed through post-offices (post cost) Lt10. Then payment is executed through banks (bank charges) Lt11. Then payment is executed directly to beneficiary (the average monthly salary of cashier), in Lt

…………….…………….……………..

12. Overhead expenditures – please estimate the approximate average monthly amount spent on phone calls, printing etc. in relation with SB

M. Are the persons from public works programs of labor exchange being involved in organization of social benefit payment (for example, persons working public works provide help to clients to fill request forms or other). 1 Yes 2 No

N. If so, indicate: 1) the number of such persons in 2004 ……… 2) how many months did they work …… 3) how many hours per day on the average did they work with the matters related to social benefit ………………

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P. Social Assistance Centre’ staff which is involved in organisation of social benefit payment and the time spent on separate with this benefit related activities

Activities of social benefit payment Number of staff involved in activity, in the end of 2004

Average length of one operation, in minutes

Please try to separate time and staff only for SP At the Centre In neighbourhood

1. Request reception/ (interview, filling the forms) 2. Data entry to computer3. Verification of the correctness of the presented by client data comparing them with those in data basis 4. Calculation of the amount of benefit 5. Confirmation of the benefit award (verification when signing) 6. Providing information to the client about the decision to award a benefit or not 7. Visiting the client at home and filling of household inspection certificates (travel + filling time) 8. Other activity that wasn’t indicated above but is performed in the process of benefit awarding and payment (in case there are such, write it down on your own) ………………………………………….……….

Number of staff in 2004Centre Neighbourhood

Hours / per month to one worker, on average

1. Compiling the payment sheet, transfer of money 2. Preparation of the financial reports about payouts and overpays 3. Supervision (control) of the neighbourhood workers’ activity 4. Complete (selective) verification of the correctness of benefits 5. Local training of new workers to deal with social benefit 6. Examination of complaints 7. Analysis of the Centre’ activity and preparation of proposals for its development 8. Preparation of (quarterly, yearly or other) reports on beneficiaries and benefits, planning the demand for benefits in next year, etc. 9. Preparation of various reports (records) on inspections and control 10. Preparation of informative material (pampers, booklets, web page and other) 11. Preparation of proposals concerning the payment of social benefit for the amendment of municipality’ legal acts 12. Other related with social benefit activity that wasn’t specified above but is conducted (write down on your own) …………………………………………O. Maybe you would like to comment some points of previously discussed issues. Please write down your opinion ……………………………………………………………………………………………..……………………………………………………………………………………………………………..

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Annex 11. Description of territorial - administrative organization of Lithuania

The territory of Lithuania is divided into 10 counties. There are 60 municipalities in the counties: 48 regional municipalities (i.e., covering both urban and suburban localities) and 12 city/town municipalities (covering urban localities only). In their turn, municipal territories are divided into wards (at the municipality’s discretion, but this is not obligatory and some municipalities don’t have wards).

The key task of the county administration is to ensure adherence to the Constitution and laws in the territory of the county. In the field of social assistance, counties are responsible for operations of care establishments in the counties. The counties carry out no functions in the field of cash social assistance.

Municipalities bear the main responsibility for organisation and provision of social assistance (in the form of both cash assistance and social services). Functions of municipalities shall, according to discretion to adopt decisions, be divided as follows:

1) independent. Municipalities shall exercise their functions in accordance with the competence granted by the law, obligations to its community and for the interests thereof;

2) assigned (of limited independence);  3) State (delegated to municipalities). These shall be State functions delegated to

municipalities, taking into consideration interests of the local population;4) contractual. The implementation of such functions shall be based on contracts. 1

Provision of cash social assistance is a State (delegated to municipalities) function, which includes among others:

a) calculation and payment of compensations (heating charges, cold and hot water charges, government-supported passenger services and others);

b) organisation of free-of-charge meal provision for children from low-income families at all types of comprehensive schools;

c) calculation and payment of social benefits. The ward shall be a structural territorial unit of the municipal administration , functioning in a certain part of the municipal territory. The boundaries of the territory of the ward and the functions of a legal person (municipal administration) delegated to the ward shall be established by the decision of the municipal council. The number of wards shall be also set by the municipal council. Activities of the ward shall be governed by the regulations of activities of the ward, approved by the director of the municipal administration. Activities of the ward shall be funded with the municipal budget, making necessary assignments to the ward.

11 Law on Local Self-Government of the Republic of Lithuania, 2004.

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The ward:a) when necessary, evaluates living conditions of particular families

(persons) and makes proposals to the municipal administration as to necessity of social assistance to such families (persons) and forms of assistance;

b) may organise provision of social assistance and payment of allowances in the established procedure.

To organise social assistance, each municipality has set up a separate special assistance unit. In some municipalities, budgetary institutions – social assistance centres - are established at the social assistance units to share with them functions in the field of social assistance (cash and social services).

Wards do not have separate social assistance centres. Alongside with other community administration functions, they may carry out the functions of rendering social assistance (cash assistance including) as a unit of the municipal administration. Such being the case, municipal social assistance units simply have their “landing force” in wards, i.e., social workers of the unit, which work in the wards instead of the social assistance units. In some rare cases, these social workers are (municipal administration) staff subordinated to the warden. Then the social assistance unit plays the role of methodological guidance only.

Annex 12. Administration Cost for SB program. Disaggregated date on various elements .

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Transfers Paid Out (benefits) in 2004 - 69600 thou LTL

Administration costs MSSL LEVEL MSSL activities in SB program involve the preparation of law and second legislation as well as financial SB planning, judgment of complaints, information activities, secondments to the municipalities with the aim of clarifying the implementation of monetary social support reform, the improvement of computer program “Parama”.

MSSL staff, related with SB program implementation, involves 5 specialists of Support for family division. They are directly responsible for the program. These specialists have provided information, indicating what part of their work time on average they spend for working with SB program. Other politicians, related with this program are showed in Table 1.

Table 1. Average working time spend per month for SB program in MSSL and share of wage for SB Staff of MSSL involved in SB program Work

time for SB %

Share of wage* for SB thou LTL annual

1. Staff of Support for family division :1.1 Head 10 4,21. 2 Deputy Head 10 4,21. 3 Specialist 30 9,11. 4 Specialist 30 9,1 1. 5 Specialist 10 3,0 2. Specialist of Law department 3 1,43. Director of Family, Child and Youth department 3 1,44. Secretary of MSSL 3** 1,45. Minister 3** 1,4Share of expenditure by Disaggregated costs elements 7. Points 1.1, 1.2, 2, 3,4,5 Planning and Design of Program 40 5,6 8. Points 1.1, 1.2, 2, 3,4,5 Program outreach 30 4,2 9. Points 1.1, 1.2, 2, 3,4,5 Monitoring and evaluation 30 4,2 10. Points 1..3, 1.4, 1.5 Monitoring and evaluation 100 21,2 Other MSSL expenditure for SB program 11. Expenditure for Booklet about social assistance for families, White book about SB and Compensations for municipalities (29 Thou LTL : 2 )

14,5

12. Seminars for social assistance staff in municipalities about Cash social assistance reform (10 events X 1 thou LTL)

10,0

13. Expenditure on improving of program Parama required for SB record in municipalities (70 thou LTL : 2)

35,0

TOTAL in Table 1 94.7* Average monthly net earning of top authorities, administration institutions, ministries, departments, service institutions state servants, according to Statistical data. ** SB beneficiaries share in total population is about 3 per cent.

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Administration costs MUNICIPALITIES LEVEL

A. Direct work with client and his/her file ( see Table 2, Table 3 below) Table 2. Duration and costs per one operation

Direct work with client and his/her file Duration in minutes Costs in LTL *Average duration Minimum

duration Maximum duration

Average Minimum Maximum

1. Determination of eligibility 70 8,5 1.1 Filling in of the application form for the SB

27 8 70 2,9 0,8 8,1

1.2. Crosschecking of the correctness of data indicated by the customer with dbases as to SB

16 6 35 1,7 0,7 3,9

1.3. Data entering into a computer and computation of the size of SB

17 4 45 1,9 0,5 5,2

1.4. Approval of SB award (review, crosschecking, signature affixing to endorse the decision)

10 2 20 2,0 0,4 4,9

2 Preparation of customer notification on assignment/disallowance of the SB

10 2 30 1,2 0,2 4,2

3. Filling in of household testing report during a home visit (traveling + time of filling in)

61 20 120 6,5 2,3 16,8

4. Other omitted activities that are present in the process of assigning and payment of SB * *

22 3 120 2,5 0,6 12,7

*Costs for one operation = time spend for operation X average hourly gross wage

** Mostly consultation of clients about how to fulfill application form, consultation by phone; letters –reminders for clients to bring necessary documents for application

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Table 3. Administrative Costs for Direct work with client and his/her file

Calculation Expenditure THOU LTL

1. Determination of eligibility 8,5 LTL* x 121,2 1030

2. Filling in of household testing report during a home visit (traveling + time of filling in)

6,5 LTL* x 22620 (household testing reports per year in municipalities)

106

3. Preparation of customer notification on assignment/disallowance of the SB***

1,2 LTL* x 36,4** 43.7

4. Other comitted activities that are present in the process of assigning and payment of SB ***

2,5 LTL * x 36,4 91.0

TOTAL 1271* From Table 2** Could be more, there aren’t information about how many applications were rejected*** By the re-applying, activities 3,4 are performed very rarely or are excluded.

According to MSSL data in 2004 m. SB was allocated for - 30,3 thou families per month. Each family must apply 4 times per year 30,3 X4 = 121, 2 thou applying per annum.

Duration of operations for determination of eligibility - average time for one or another operation in general (not excepting new appeal or re-applying).

According to the survey data, re-applying amount about 80 per cent in total number of appeals.

By the re-applying, activities 3,4 are performed very rarely or are excluded. Therefore for counting points 3,4 we take only part of appeals – about 30 % .Thus121.2 X 0,3 =36.4 thou appeals per annum.

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B. Administrative Costs for general matters of SB program (Table 4,Table 5, Table 6) Table 4. Average involved staff number, duration and expenditure on SB program activities in one municipality per month

Activities Staff involved in 2004 Hours /per month for on staff / Average

Average hourly gross wage LTL

Expenditure per one activity / per month in LTL

In the centers

In communities

Average in municipalities

In the centers

In communities

Average in municipalities

In the centers

In communities

Average in municipalities

1. Compiling the payment sheet, transfer of money 2,86 0,78 3,65 7,28 0,74 8,02 7,21 140,76 26,01 173,27

2. Preparation of the financial reports about payouts and overpays

1,46 0,7 2,16 10,3 0,56 10,86 8,18 132,71 5,5 146,47

3. Supervision (control) of the wards workers’ activity

1,47 0,65 2,12 8,76 2,42 11,18 8,07 193,32 67,91 265,48

4. Complete (selective) verification of the correctness of benefits

1,72 0,28 2 25,14 0,43 25,57 10,04 476,27 13,16 491,55

5. Local training of new workers to deal with SB 1,23 0,11 1,34 10,11 3,06 13,17 7,14 161,99 5,54 167,53

6. Examination of complaints 2,14 2,06 4,2 8,65 4,1 12,75 7,14 106,26 129,68 268,37

7. Analysis of the activities and preparation of proposals for its development

2,63 2,26 4,89 10,52 2,13 12,69 10,04 313,8 131,81 454,11

8. Preparation of (quarterly, yearly or other) reports on beneficiaries and benefits, planning the demand for benefits in next year, etc.

2,11 1,06 3,17 13,63 0,79 14,43 8,07 255,14 42,74 305,00

9. Preparation of various reports (records) on inspections and control

1,4 0,4 1,8 6,84 0,03 6,87 10,04 120,49 2,5 123,07

10. Preparation of informative material (pampers, booklets, web page and other)

1,11 0,61 1,72 2,79 0,11 2,91 8,07 36,36 11,71 49,16

11. Preparation of proposals concerning the payment of SB for the amendment of municipality’ legal acts

1,78 0,86 2,64 8,13 0,39 8,53 11,76 190,47 41,16 236,77

12. Others related with SB activities that wasn’t specified above but is conducted (see specification below table 5)

3,99 2,22 6,21 3,49 2,17 5,66 7,31 152,492280.1

194,66672,4

353,053033,8

In wards, on the table 4 listed activities are implemented rarely, so in calculation overall costs to the costs calculated in center only part of wards costs were added. Fort example, if sheet compiling activity have indicated five wards ( it’s 12,8 percent of all respondents) , so to the costs of such activity only 12,8 percent are added costs calculated for wards.

100

Table 5. Administrative Costs for general matters of SB program in all municipalities per annum

Expenditure / per month/ in all municipalities (date from last column in Table 4 X 60) LTL

Expenditure / per year/ in all municipalities (2 X 12) thou LTL

1 2 31. Compiling the payment sheet, transfer of money 10396 1252. Preparation of the financial reports about payouts and overpays 8788 1053. Supervision (control) of the wards workers’ activity (30 municipalities) 7980 964. Complete (selective) verification of the correctness of benefits 29493 3545. Local training of new workers to deal with SB 10052 1216. Examination of complaints 16102 1937. Analysis of the activities and preparation of proposals for its development 27247 3278. Preparation of (quarterly, yearly or other) reports on beneficiaries and benefits, planning the demand for benefits in next year, etc.

18300 220

9. Preparation of various reports (records) on inspections and control 7384 8910. Preparation of informative material (pampers, booklets, web page and other) 2950 3511. Preparation of proposals concerning the payment of SB for the amendment of municipality’ legal acts

14206 170

12. Others related with SB activities that wasn’t specified above but is conducted * 21183 254 *76 ; 7 6 ; 104

TOTAL 174079 2089

* Mostly consultations (30% of expenditures from point 12 were allocated for program outreach);* Proposals for SB program implementation improvement in municipality (30% of costs from point 12 were allocated for program planning);* Activities concerned with SB payment for families with social risk -SB in kind (40% of costs from point 12 were allocated for payment of benefit)

101

Others costs of municipalities

There are 9 municipalities, in which Social assistance centers implement the program of social assistance (and SB), meanwhile divisions of Social assistance perform only planning and supervising (see in Country study, page 8). 2 specialists in each municipality are employed in these division and their functions are related with general planning and evaluation of social support program, information activities and complaint analysis.

According to the data of the research they devoted about 15 percent of their work time for SB matters. Hereinafter calculations of the expenditure for these activities are provided. In Table 6 there are calculated costs on this activities.

Table 6. Activities and expenditures on SB program (which were not included in Tables 4,5)

1. Activities of SB planning: 39 hours / per month X 7,8 LTL average hourly wage X 12 months = 3,7 thou LTL per annum.

2. Consultations activities about SB: 104 hours / per month X 7,8 LTL average hourly wage X 12 months = 9,8 thou LTL per annum.

3. Monitoring and evaluation activities: 255 hours / per month X 7,8 LTL average hourly wage X 12 months = 23,4 thou LTL per annum.

For the implementation of social support (as well as of SB) program municipalities Council or Commission usually approve a regulations (also about assign SB by exception). In that case their work time constituted 27 hours per month on average in the municipality.

4. Accordingly, expenditure 27 hours per month X 7,8 LTL average hourly wage X 12 months X 60 municipalities = 151,6 thou LTL per annum in all municipalities. These expenditure were divided: 50 proc. Planning of the program 76 thou LTL50 proc. Determination of eligibility 76 thou. LTL

TOTAL in Table 6 188.5 thou LTL

C. Table 7. Maintenance of SB program

102

Average in 1 municipality /per annum LTL

In all 60 municipalities Thou LTL per annum

1 Expenditure on procurement of programs required for social benefit record (Care (Globa), Support (Parama), Property (Turtas), NEVDOS services etc.

3678 221

2. Expenditure required for assuring access to data bases (for SP needs)

4536 272

3. Travel expenses required to home visits (conduct the examination of family’s living conditions and fill the household inspection certificate)

2166 130

4. Average there are 11 computers in one municipality

11x60x5000 3300

5. Average expenditure required for the maintenance and servicing of computers

880 53

6. Average expenditure on staff (working with SB) training 768 46

7. Expenditure on SP payment:7.1 Then payment is executed through post-offices (post cost) Lt7.2 Then payment is executed through banks (bank charges) Lt7.3 Then payment is executed directly to beneficiary *

5362

81190

322

4924,8total in point7 395,8

Total ( without item 4) 1118

* this payment form is used only in 15 municipalities (39 per cent of 39 municipalities). The data is very different and I decided to take 90 LTL per month X 24 municipalities for calculation .

Table 8. Interim summary Amount thou LTL

MSSL level costs 95

Municipalities level costs: Direct work with client and his/her file 1271 Administrative Costs for general matters of SB program 2089 Maintenance of SB program 1118 Others costs of municipalities 189TOTAL 4762

Table 9. Costs Analysis

103

OPTION 1 Total costs

OPTION 2 Disaggregated costs Amount thou LTL

69600

%

100Transfers Paid Out (benefits) 69600 thou LTL

Transfers Paid Out (benefits) Disaggregated administration costs 4803 6.9TOTAL 1-8 4803 1001. Planning and Design of Program: points 7 from Table 1points 11,12 from Table 5points 1,4 from Table 6

3315,6170+763,7+76

6.9

Total Administrative Costs2800 thou LTL

2. Program outreach: points 8, 11,12 from Table 1points 3,4 prom Table 3points 5; 6;10; 12 from Table 5point 2 from table 6points 6 from Table 7

6444,2+14,5+10 43.7+91.0121+193+35+769,846

13.4

3. Determination of eligibility : point 1 from table 3point 4 from Table 6

11061030 76

23.0

4. Maintaining a database of beneficiaries: point 13 from Table 1points 1; 2; 5 from Table 7point 6 from Table 10

62335,0221+272+5342

13.0

5. Payment of Benefits: points 1; 2;12 from Table 5 point 7 from Table 7

728125+105+102395,8

15.1

6. Home visits, if any: point 2 from Table 3point 3 from Table 7

236106130

4.9

7. Monitoring of Conditionality, if any: points 3,4 from Table 5

45096+354

9.4

8. Monitoring and evaluation: points 9,10 from Table 1points 7; 8; 9 from Table 5point 3 from Table 6

6854,2+21,2327+220+8923,4

14.3

Table 10. Average Staff working with SB matters in Social assistance division (center) and share of working time for SB

104

Staff Average number of staff in municipality

The part of working time which is spent only on the matters that are connected with SB, per day on the average (in percent)

Share of monthly wage only for SB matters in LTL

1. Managers, deputy heads

1,2 16 432

2. Chief specialists 1,2 40 6313. Senior specialists 4,2 41 19254. Specialists 3,2 39 14035. Other with the matters of SB related specialists

2,1 23 577

6. Computing specialists 0,5 6 427. Accountants 0,7 13 1128. Workers/ Specialists in wards

5,4 29 1218

TOTAL 6340

Using this (alternative) administration costs calculation way (more aggregate):- Municipalities delivered number of staff, which worked with SB program. - And indicated time amount, which is devoted to SB program.

The costs of administration only for staff, working with SB - 4565 thou LTL (6340 x 12 x 60).

105