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Economists disagree – some say it is easier to give benefits to everyone than to try to calculate who does not need them, others – that the amount of this benefit has already reached the ceiling.
It is impossible to pay everyone and a lot
As a prime ministerial candidate, Ingrida Šimonytė hinted that, in the long run, Lithuania will have to choose how to handle the child’s money. According to her, it is impossible for all families in Lithuania to receive large amounts of money for children.
I. Šimonytė believes that a child’s money is a good financial instrument for those families who need financial help, for example, single parent families. However, the high universal benefits would be too onerous for the state budget.
“It just came to our knowledge then. And if we want to help those families with more modest incomes and who need more help, that differentiation will continue to be inevitable and the statement that in the beginning all children are equal will not be fulfilled,” they told me. in an interview with BNS Šimonytė.
Therefore, he has no doubt that in the long run the state will have to differentiate money and child benefits for a portion of families.
“It is now that we are at a stage where our options are: to distribute small amounts of money to a wide range of children or to focus resources on those families who need more financial support,” said I. Šimonytė.
The administrative device must be switched on.
Romas Lazutka, professor of economics at Vilnius University, admits that Lithuania has already reached the maximum limit for the child’s money and it would be difficult to increase these benefits further. According to the teacher, children’s money contributes significantly to the income of some families, and even helps them cross the poverty line, but it does not make sense to provide a universal benefit to all people with children.
But right here, you see the problem that arises from that. If Lithuania changes the child money payment system according to the families’ income, it will be necessary to constantly check when the family is entitled to the benefit, which will cost additional time and costs.
“It is a matter of agreement not to pay those who earn an average salary or those who earn 1.5 or two average salaries. Wherever we draw the line, it means that management must determine whether or not to pay Petraitis. You need to control your income.
A very large administrative machine is put into operation, which is costly and inconvenient. And the number of those people will fluctuate as we analyze how we calculate income. There is still a salary for the husband and wife, so you have to accumulate it, “said R. Lazutka on tv3.lt.
It also notes that not all employees earn the same income every month, which means that there will be situations in which one month the family will receive money per child and the other will not. Attempts to cheat are also likely.
“Yes, 2,000. I no longer pay money to the child, so I will ask my employer to pay me 1999 EUR. Then I will receive 60 euros of child money, and I will receive 2,000. I would lose them”, gave an example R. Lazutka .
Give everyone – participate
To avoid additional administrative burdens, R. Lazutka suggests following the example of some Western European countries: giving everyone with one hand, but depriving the rich with the other.
“If we think that a child’s money should not be paid to those whose wages are more than double the median income (this year 879,2 EUR “in hand” – automatic delivery), then we set a tax rate – for everyone 20%, and for those who earn more, of the additional amount – an additional percentage of the tax.
Then it would turn out to pay that child’s money to everyone. The richest children continue to receive their children’s money, but they would increase their taxes to the extent that they would lose their children’s money, ”suggested R. Lazutka.
According to him, in such a case the administrative burden would be significantly less, as it would not be necessary to check the income of the entire population of the country raising children on a monthly basis.
“The difference in administration is because people who are paid money for children do not have to verify their income. <...> It will definitely not be easy on a budget. “If we want to save at the cost of the child’s money, it is not necessary to withdraw the money from the child, it is enough to take the same amount from those who earn more with taxes,” said the processor.
Who will decide which family is worth the money and which is not?
At that time, the chief economist of Swedbank, Nerijus Mačiulis, as soon as he heard the first speeches about the intention to change the child’s monetary payment system, he reacted very critically to such proposals.
In late October, the Freedom Party, a partner in the ruling coalition, put forward a proposal to review the payment of child money so that only families with a precarious financial situation receive support. N. Mačiulis then called this idea “communist-bureaucratic”.
“How do you plan to differentiate the child’s money there based on the parents’ income? Will the number of dependents be assessed? Will the family’s financial obligations be assessed? Will the different costs of child support in urban and rural areas be evaluated? How much will such a bureaucratic mechanism cost? ”N. Mačiulis raised the proposal on his Facebook account after hearing such rhetorical questions.
He highlighted that one of the main advantages of universal income like children’s money is the elimination of bureaucratic costs.
“And the elimination of political moralization-evaluation, when someone has to draw a line to which child still owns a sports club and to which he no longer belongs, because his mother has two jobs and already earns enough,” added N Mačiulis.
The economist also recalled that the child’s money was created by the abolition of the additional tax-free income (PNPD), so the destruction of the child’s money would only mean higher taxes for some employees, since they lost the tax credit.
“By the way, this is not a state benefit for those with higher incomes. Those with higher incomes also pay a lot more taxes, and the child’s money is an opportunity to recoup a small portion of the taxes paid,” wrote N. Mačiulis.
The candidate for minister reassures
It is true that the candidate for the Minister of Social Security and Labor, Monika Navickienė, also referred to the issue of child money during the meeting with President Gitanas Nausėda. It ensures that next year parents will receive the planned child money.
“The child’s money, as planned, the decisions made by the previous government, will have their own continuity. And although the budget has been returned to the current government for review, we really intend to leave the child’s money, a benefit as it is, universally, “Ms Navickienė told reporters on Wednesday after meeting with President.
True, he did not hint at what the child’s monetary outlook would be in the next few years, he only said that no changes are planned now.
“We are not going to reduce or change the principles of child money now,” he said.
Since 2020 January 1, the universal child benefit is 60 euros. Next year it will grow to 70 euros. More than 500 thousand children receive child money in Lithuania. children.
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