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Experts propose a radical change to the current benefits scheme. For example, paying a different amount of money regardless of accrued seniority, as required now, or in total, to provide a flat rate benefit for everyone.
The Ministry of Social Security and Labor is cautious with these types of proposals. However, it recognizes and hopes that the laws that will introduce a new system of parental leave and benefits will already be modified this year.
Book in advance on October 1.
Currently, paid parental leave lasts until the child is 12 or 24 months old. Parents can choose who will take care of the child, will receive the benefit and who will work. The benefit can also be paid to one of the child’s grandparents.
If you choose to care for a child up to 12 months, 77.58 percent is paid for that entire time. for the benefit of paper. By caring for a child and working together, the amount of income received is reduced by the child care benefit paid by Sodra.
If you choose to care for a child under 24 months, the child care benefit for the first year is 54.31 percent. salary, and the second – 31.03 percent. Earning from work in the first year reduces the benefit by the same amount, and not in the second.
This procedure will change substantially with the implementation of 2019. Directive on reconciliation of work and family life for parents and caregivers. In Lithuania, as in other EU countries, it must start operating no later than August 2 of next year.
However, as reported by the Ministry of Social Security and Labor to the portal tv3.lt, the relevant laws are expected to come into force in Lithuania in the middle of next year and be adopted later this year, in the autumn session of the Seimas (begins September 10).
The pregnancy usually lasts 9 months. Consequently, if the child starts before October 1 of this year, his parents are likely to take parental leave and receive the corresponding benefits under the current regime.
If a child starts later, parental leave and parental benefits will be awarded in a completely different way. Furthermore, grandparents will be able to contribute much less to the care of the children.
You will choose between two options
The Ministry of Social Security and Labor has proposed two alternatives that would replace the current system of parental leave and benefits in Lithuania.
The main novelty will be that both the mother and the father will have to use it 2 months after the child’s birth. Paid parental leave that cannot be transferred between each other. If, for example, dad doesn’t want to leave his 2-month-old son. Parental leave, the mother will not be able to take care of it, so the total duration of parental leave will be shorter and the benefit will be consequently less.
The remaining months of paternity leave, during which benefits are also paid, will be shared by the parents according to the agreement.
The first alternative is to pay the benefit until the child reaches 24 months. (no possibility of choosing a different benefit period). Of which 2 months. the child must be cared for by the mother and 2 months. father, and for the rest of the time, the child could be cared for and the benefit paid to both the mother and the father and only if they cannot to one of the grandparents (now this condition does not exist).
From 24 months parental leave, within the mandatory 2 months. mother and 2 fathers would benefit 78 percent in the remaining months before the child turns 12 months. – 45%, until the child reaches 24 months. – 25% of salary.
In the non-transferable months, the parents could work, but the additional income would reduce the benefit. In subsequent months, the additional income would not reduce the benefits received, as long as the sum of the benefits and the additional income does not exceed 100%. previous salary.
The second alternative is to pay the childcare allowance until the child reaches 18 months. (without a different choice of benefit period). Of which 2 months. the child must be cared for by the mother and father for 2 months, and the rest of the time – the child could be cared for and the benefit paid to both the mother and the father, but only if they cannot – to one of the grandparents.
From 18 months parental leave, within the mandatory 2 months. for the mother and 2 parents, the benefit would be 78%, in the remaining months before the child reaches 18 months. – 60 percent. of wages.
The Ministry of Social Security and Labor does not reveal which alternative will eventually be proposed as a bill and when exactly it will do so.
By the way, according to data from the Organization for Economic Cooperation and Development, parental leave lasts longer than in Lithuania or Germany (148 weeks) only in Poland (183.7 weeks) and Spain (150). Oh, for example in Chile or the United States they are quite short (12 weeks)
Offer to pay everyone equally for 3 years
While the ministry is considering how to change child care benefits, Vilnius University professor Romas Lazutka suggests reviewing them as well.
It points out that 1 year of experience is now required in the last 2 years to receive the benefit. As a result of this requirement and the increase in unemployment during the pandemic, a significant number of parents cannot receive benefits. And those who earn low wages and benefits receive low wages.
“Due to the expansion of unemployment, the problem is more acute. Historical data show that it worsens after the economic crisis, when unemployment increases and a higher proportion of mothers and fathers of children who have given birth do not have the insurance necessary to qualify for the benefit ”, said the professor.
According to him, another problem is that although childcare benefits are considered part of social security, the amounts received and the contributions paid do not coincide at all.
“Calculating the amount of premiums paid before daycare (12 months) and the amount of benefit paid, we would see that the contributions are far from covering the benefits. The contribution is paid 1.71 percent. of salary and is prohibited not only for childcare but also for maternity and paternity benefits, for which around 0.5 percentage points of contribution are spent. The contribution to childcare remains at around 1.2%. It is only 12 months to pay it, and 78% is paid for that period. percent something. The contribution to the financing benefit should be several times higher ”, R. Lazutka is convinced.
In reality, most of the contributions required for parental leave are paid once the benefit has been used. However, later, after the birth of the child, those parents who did not receive child care benefits from Sodra because they did not have a time of service and will no longer receive them (they will no longer have children) also work and pay contributions.
“The child care benefit has an internal contradiction: the first year benefit is incompatible with the incentives to participate in the labor market, and the second year benefit with child care costs. During the first year, the benefit replaces the wages and thus essentially removes the incentive to work.For the second year, the benefit is also paid while working, which would indicate the purpose of reimbursing childcare expenses, but at the same time its amount depends on the previous salary and not of those costs ”, explained R. Lazutka.
For these reasons, the professor proposes to introduce an equal child care benefit for all, not from Sodra, but from the state budget, regardless of whether the parents have the required seniority or not.
Until the child is 2 years old, the child care subsidy would be € 304 and in the third year € 117 per month.
The more you pay, the more you get
Economist Raimondas Kuodis also joined the discussion on how best to change the child care benefit system.
According to him, Lithuania has two completely different paths with dramatically different consequences:
“Translate even more” insurance “into taxes (payments without quid pro quo) when some pay (a lot) but use (even more) and those who do not. This is the current way. For example, the money of” children “- for who will legally work to get tax-free income for children, if now it gives everyone …
The second, the path that, in my opinion, is more promising and fairer, are personal accounts in social security with the option of social credit. For example, “go at least” on your account for (early) maternity or college payment, or during unemployment, and (almost) everyone’s work on standard contracts, ending with “livestock,” wrote R. Kuodis in your personal account.
According to him, the welfare state is not based on injustice and “cunning”: one population group uses another and vice versa, or even itself in the life cycle, and here the “state” seems to take care of everyone .
“In this way, politicians, by showing ‘their empathy for public money,’ are creating so many new socio-economic states that it is not very clear who is using what,” the economist ironized.
He explained that the introduction of a social credit system, as in the UK, should set a limit to the number of people who can “borrow” from future contributions and taxes when they really need money to care for a child or for other reasons. .
When asked to comment on the proposals by R. Lazutka and R. Kuodis, the Ministry of Social Security and Labor indicated that they were valuable in achieving greater social security coverage.
“At the same time, they can be seen as certain preconditions for the development of a broader debate between the social partners and all interested groups about what the future Lithuanian social security system should be.
We would support broader periodic analysis and discussion on tool development (including innovative and key ones), together with experts and researchers. When considering changes in the social security system, support for people must be intentional and focused, without contradicting, but finding the optimal balance of contributions and benefits, services, the entire social system, ”the ministry commented.
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