The Negative Effect of Social Assistance

This 35-year-old from Pristina receives 120 euros a month of social assistance and from 10 euros for each of the seven children he has a total 190 euros.

To provide these provisions, he has to meet a condition: that no family member be employed.

He engages himself from time to time, doing various manual work without enrolling as a worker.

I'd like to have a contract job, but with a higher salary, not 300 euros, I have no account, because I'm out of social assistance. That's how I'm working sometimes, plus assistance, and it's becoming something”, Mehmetaj says.

Speaking of Radio Free Europe, he shows that he has been earning more than 300 euros from his job for months, but that there are also periods that do not reach half that amount.

As an unregistered worker, he does not pay taxes for the state or contribute to his pension.

Like him, who refuses regular work to benefit social assistance, seems to have a large number of citizens in Kosovo.

Fidan Hallaqi, who owns two companies in Pristina -- one in the transport sector and one in the hotel sector -- says he often faces job seekers who do not want regular contracts.

Hallaqi says the average salary he offers is 460 euros per month.

It shows that in each competition, between 30 and 50 percent of job seekers invited for an interview are the beneficiary of social assistance.

“We offer them additional deadlines to decide if they want to cut off the benefits of social scheme and be employed. But we haven't had a single case that has decided to leave social schemes for regular employment”, Hallaqi tells Radio Free Europe.

That fact, he adds, cannot afford their employment, for he says he cannot execute wages and other obligations with informal transactions.

Statistics Agency data shows that unemployment in Kosovo last year has been brought between 20.5 percent and 25.8 percent.

According to the agency, 40.8 percent of employees have permanent contracts for their main work, while 59.2 percent have temporary contracts.

Entrance Obligations

The labour contract implies that the employer is obliged to present the employee to the Kosovo Tax Administration and other institutions that manage and manage mandatory pension schemes and other schemes.
All contract employees pay 10 percent of their pension contributions: Five percent are paid by their employer, while five percent are separated from employment wages.

Personal income tax is handled from four to 10 percent, depending on the amount of wages. This value is removed from the worker's salary.

The number of workers without contracts in Kosovo is unknown.

The government subsidizes salaries of up to 300 euros, even though it may be higher.
The average gross salary in Kosovo is around 480 euros.

REL has asked the Kosovo Ministry of Finance whether there are and what is the number of these job applicants, but has not received answers.

Reforming Social Schemes

The Kosovo government has earlier released a concept of reforming social schemes, where it has estimated that the criterion for their beneficiaries not to have any employed family members, “has negative effect”.

Many social schema beneficiaries cannot afford the cost of living if they don't work, so they are forced to work in the informal economy”, the document says.

It teaches that certain options are being discussed to benefit families with employees but are not able to cover consumer basket expenses.

In a brief statement to the REL, the Kosovo Ministry of Finance, Labour and Transfers say the “social assistance is thought to be an additional form to meet family food needs”.

However, it is not clear when the reforming of the social assistance system can be realised in practice.

The project to that end appears to have remained hostage to a loan, worth 47m euros, which the Government of Kosovo signed with the World Bank in October last year.

This loan, twice in a row, has failed to pass to the Kosovo Assembly. According to opposition deputies, the loan for salaries or social assistance “is against fiscal logic”.

Finance, Labour and Transfers Minister Iron Murati has said in an earlier statement that the project to reform social assistance will create mechanisms that help families in need of poverty, providing them with links to the labour market.

The World Bank's recent record of poverty in Kosovo is 2017, and according to them, over 23 percent of Kosovo's citizens live in poverty.

Benefiters From Social Schemes

Kosovo has 15 social and pension schemes, which benefit over 400,000 citizens.

In addition to unemployed and economically troubled citizens, social schemes also benefit relatives of martyrs, war veterans, pensioners of age and so on.

The number of beneficial social assistance families in August has been around 25 thousand, with about 100,000 members, Kosovo Statistics Agency data show.

The regular amount these families receive ranges from 60 to 180 euros a month, depending on the number of members.

For this category, an average of 32m euros per year are spent on the state budget.

The International Monetary Fund and the World Bank have often criticised Kosovo's social schemes, saying they could put the country into fiscal crisis.
Kosovo has the Law for Social Assistance schemes since 2007.