Recommendations
1.4. Social protection policies
EVOLUTIONS: 0 SITUATION: 0 PERSPECTIVES: 1
2003 2004 2005 2006 2007*
Employed population, thousand persons 1505,1 1356,5 1316, 0 1318, 7 1271,0 Total number of pensioners, thousand persons 634,5 627,6 620,7 618,3 621,4 Relationship between employed population and
number of pensioners 2,4 2,2 2,1 2,1 2,0
Table 6 Employed and pensioned population
Note: * - fi rst semester;
Source: NBS and NSIO
36 The category of self-employed persons include: physical entities, land owners, individual enterprisers, patent owners, attorneys, nota-ries, persons which concluded individual insurance contracts.
Development of human capital a unifi ed database of social assistance
bene-fi ciaries and imperfection of the mechanism to redirect allowances toward the most dis-advantaged categories.
In 1994, the relevant ministry started to develop the national social assistance sys-tem. Th e profession of social assistant was introduced in the nomenclature of profes-sions in 1998, but it was only in 2006 when the fi rst actions were undertaken to employ social assistants at local level. Th e institu-tional framework in the fi eld of family and child protection is poor and fragmented.
Four diff erent ministries are responsible for child protection (Ministry of Health and Social Protection, Ministry of Education, Ministry of Justice and Ministry of Interior), while no integrated executive structure is in place to be responsible for child and fam-ily protection (see also SPECIAL TOPIC:
CHILD PROTECTION IN MOLDOVA.
With 85% of the local budgets’ expendi-tures directed toward maintenance of educa-tion institueduca-tions from the locality, we cannot speak about investments in social assistance services at the community level. All commu-nity services appeared with the support of international organisations and charity foun-dations. In these conditions, the incapac-ity to anticipate and the vulnerabilincapac-ity of the national social protection system to the new social problems are obvious. Among them we have the growing incidence of drug ad-diction and HIV/AIDS, situation of children in residential care (about 11.600 children37) or not being in the care of their parents as a result of their emigration. It is estimated that about 35 thousand children in the Republic of Moldova have both parents abroad, and 75 thousand children – one parent38. As the tra-ditional functions of family are weakened by social problems (emigration, violence, aban-don, pauperization, etc., see also FAMILY CRISIS), social protection system should interfere to reduce the impact and to prevent the mutation of new social problems.
Risks
Th e contents of social protection system reform strategies and programmes meets the majority of problems and aspirations of disadvantaged people. But the highest risks derive from the ex-tremely defi cient implementation of the develo-pment strategies.
Population emigration and ageing considerably aff ects social insurance budget fi nancial stability.
Th e present-day social insurance system off ers to benefi ciaries a reduced level of insurance. If the current conditions for social insurance dis-tribution and organisation are maintained, the substitution rate shall drop further on with an average of 0,5% – 1,0% per each 1-2 years. Ac-cording to forecasts, there shall be registered a signifi cant increase, by about 14% annually, for the diff erence between the calculated average salary and the average value of the established pension39.
Inequality maintenance in social insurances re-distribution for some categories of employees amplifi es the inequity feeling and the social pre-ssure on employed population and reduces the motivation of contributing to state social insu-rance budget.
Perseverance of the complicated system with no individual record and fragmented in diverse forms of social assistance and service for social compensations amplifi es the vulnerability of the families that are indeed in need and decreases the real value of the granted support.
Th e trend to set up more social assistance ser-vices may provoke defi cit of resources within local public administration for maintaining and developing these services. Besides, for many lo-cal budgets the increase of the existent expendi-tures with 150–250 thousand MDL annually is a real luxury.
Th e reduced capacity of the social assistance ser-vices’ funding and administration from public sources at local level generates inequality among localities in regards to services’ assurance, com-munity centres for (re)integration and support granted to disadvantaged children, families and solitary elderly people.
Governmental policies
Th e fi rst social reform launched in the Republic of Moldova in 1994 aimed to eq-uitably index the social insurances. In 1998 the Government launched the Strategy for Pension Insurance System Reform with the purpose to set up a new social insurance system that would be fi nancially stable and
37 “Situation of institutionalized children”, developed by the Food Secu-rity Programme of the European Commission together with “Every Child”, Chisinau, 2005.
38 “Situation of children left without parental care as a result of emigra-tion”, UNICEF, Chisinau, 2006.
39 The average is calculated based on the results of pension system evolution modelling, see „Republic of Moldova’s Pension System:
actuarial expertise”, Ministry of Social Protection, Family and Child of the Republic of Moldova, Chisinau, 2007.
Development of human capital
socially equitable, encouraging contribution and discouraging distribution. Th e Strategy provided for increase of retirement age, pro-motion of private social insurance systems, cancellation of retirement advantageous conditions and other elements, the majority of which were stopped in 2002. As a result only a part of the strategy provisions were implemented. It was managed to reduce the debts owed to insured persons and to elimi-nate the phenomenon of pensions pay-ment holdback. Th ese achievements were obtained mainly due to the organisation of disciplinary payments towards the social in-surance budget. Besides, based on the strat-egy provisions there was implemented the mechanism for individual record of tax pay-ers and social insurance contributions thus allowing to ensure a link between contribu-tions and payments.
In 2004 there was a try to merge retire-ment conditions by eliminating the advan-tageous conditions for some categories of citizens, but the eff ect was limited. Th e pen-sion system continues to remain unequal for diff erent categories of persons. Th e merging of the retirement conditions is obstructed by decision makers as the decision to set up a single pension system is fi rst of all a po-litical one. Reform tergiversation induces tax payers’ dissatisfaction as they are rather burdened by the reduced substitution rate.
For the purpose of reducing the inequalities specifi c to the retirement system in agricul-ture, in 2006 the Government approved the Strategy for Retirement System Reform in Agriculture40. Th e Strategy provides for ap-plication of farmers’ individual contribution share and partial subsidies from state bud-get. Th e given solution was a short term one.
Th e most effi cient mechanism for the entire social insurance system is the individual contribution (purchase pf social insurances) of employees from all sectors.
For the purpose of improving the fi -nancial stability of the state social insurance system and to set up a single system for
age-limit pensions for all categories of employ-ees, there was developed the Plan for ensur-ing the fi nancial stability of the state social insurance budget41. However, the given plan did not induce essential changes and the system remained to be diff erentiated and unstable. Th e Government is not capable to mange the risks implied by this system, risks related to possible social protests and political pressures from agrarian sector em-ployees and public servants. Besides, when implementing this plan, the employees from profi table sectors might loose their motiva-tion to pay fully their contribumotiva-tions to the state social insurance budget.
No signifi cant progress is achieved in settlement of private pensions funds ei-ther. Th e economic instability, the lack of interest manifested by the pension funds with foreign capital towards the Republic of Moldova and the poor capacities of the government to mediate the relations between private funds and pensions’ benefi -ciaries reduce considerably the possibility to implement in the nearest future other social insurance mechanisms, even though there are recent examples of such reforms in the neighbouring countries42.
Intending to rationalize the mechanism for nominative compensations’ provision, the Ministry of Social Protection, Family and Child has initiated the implementation of the Pilot-Project for testing the mecha-nism of nominative compensations’ grant-ing43. Th e goal of the project is to perform a trial test in Soroca, Orhei, Leova Rayons and Riscani rayon from Chisinau munici-pality of incomes reported by families with the help of some “fi lters”. When applying the fi lters, it was managed to exclude 19% of people out of the initial number of benefi -ciaries for nominative compensations, thus proving that there are reserves in regards to the equitable provision of compensations.
Th e international experience proved that the development of the social services meant for child have to be reoriented from the traditional institutions for care provi-sion towards the assistance and support of-fered to family and community. Th e state is no longer the only responsible, although it still provides resources for the residential institutions with a high number of chil-dren. We cannot talk about state inactivity
40 Decision of the Government of the Republic of Moldova no.1219 of 23.10.2006.
41 Developed within the Strategy for Pension Insurance System Reform dated from 23.09.1998, approved by the Administration Board of the National House for Social Insurance.
42 Recently Romania introduced a multi-pylon pension system that com-bines state system, private administration and auxiliary pension funds.
43 Decision of the Government of the Republic of Moldova no.1119 of 27.10.2005.
Development of human capital as there were actually passed and approved
laws, strategies and action plans that were favouring child’s care in the family. But, for the time being, the practical aspect is left for international and non-governmental organ-isations to deal with (details in SPECIAL TOPIC: CHILD PROTECTION).
Institutional capacities building in so-cial assistance fi eld was a priority both: for the public fi eld and the association sector.
Up till recently, the social services network was lacking the most important link – the social assistant at community level. With UNICEF’s representative in Moldova, the Ministry of Social Protection, Family and Child has organized the process for com-munity social assistances’ recruitment that are to work within mayoralty offi ces. At the present moment 530 social assistants are employed, but there are a lot of constraints that may aff ect the capacity of the social as-sistants’ network. Th e recruitment of social assistants was performed in emergency re-gime by neglecting employment procedures.
Th e majority of social assistants employed at community level do not have special train-ing in the given fi eld.
For social assistants to carry out effi -ciently their professional tasks, it is neces-sary to organize an initial training process at national level based on a standard-model approved by the MSPFC. All in all, there is a need of 1200 units of social assistants at community level. In this context, the Min-istry of Education and Youth reduced the number of university places for the faculty of social assistants at university level. Th e hasty approval of some important deci-sions in the educational policy has become already a tradition for the Republic of Mol-dova, as mentioned already in the section VOCATIONAL EDUCATION. Th is fact proves that there is no mechanism for inter-ministry activities coordination. Another constraint for the good functioning of the network is the wage of the social assistant.
At the present moment the wage of a social assistant counts for 540 MDL – just 100 MDL more than the average pension in the country – a fact that does not motivate at all for professional activity loyalty.
Recommendations
For the purpose of ensuring fi nancial stability and security of the social insurance system there should be accelerated the pro-cess for implementing the Strategy for Pen-sion System Reform and namely:
Increase of taxpayers number by ensuring the individual record for all categories of emplo-yees, including the ones from agriculture. So as to lessen the discrepancies between the con-tributions of the agriculture employees and the insurances they benefi t from, it is necessary to introduce individual record codes for every tax-payer (SIPA) and the obligatory scheme for so-cial insurance of agriculture employees. At the same time, it is indispensable to develop a me-chanism for individualized testing of incomes, living standards of all categories of citizens, thus inducing a possibility to rationalize the social in-surance redistribution system.
Merge of retirement mechanisms for all catego-ries of employees so as to diminish inequitable distribution. It is important to reduce discre-pancies between pensions provided to public servants, member of parliament, etc. and simple citizens. Th ese actions should improve taxpa-yers’ trust and confi dence in retirement system.
Increase of citizens’ retirement age represents the most effi cient method for mitigating the substitution rate decrease. Stabilization of so-cial insurance system and increase of medium term payments may be achieved by increasing the retirement age up to 65 years old for men and women. Th is fact should allow increase of substitution rate in average with 1,0–1,6% an-nually. While the retirement age increases, the number of employed persons also increases and this shall give a possibility to increase the majo-rity of social insurance forms and respectively to improve the living standards of social insuran-ce benefi ciaries. In the same context, the delay of retirement age shall off er an opportunity to really increase the pension without aff ecting the fi nancial stability of the social insurance system.
Complete the present-day pension system with private pension funds. It is recommended to have a pension system based on three pylons44: the fi rst one representing the existent state insurance sys-tem; the second – private administration of a part from employee’s contribution to scheme 1, the contribution could be of 2% from the gross mon-thly wage; and the third pylon is set up from op-tional pensions funds, where the employee or the employer may pay a part from the salary income.
44 Such pension auxiliary systems were implemented in the majority of countries from Central and Eastern Europe.
Development of human capital
For the purpose of increasing the substitution rate, there should be introduced a single share of social insurance contributions for all cate-gories of citizens. Th is change may increase the substitution rate for medium term with 6-8%.
Assurance of compensating eff ect upon cate-gories of citizens in need through nominative compensations and other social services impo-ses their integration in family support program-mes. Th e granted support should be oriented towards family’s specifi c needs, decreasing thus the number of institutionalized children and im-poverished families.
For the purpose of avoiding the excessive insti-tutionalization of social assistance services, it is necessary to assess the needs of local commu-nities in regards to creation of new services at local level. It is necessary to have a horizontal cooperation between public administration au-thorities and donors so as to avoid creation of services that aft erwards cannot be effi ciently managed by local public administration.
Methodical and institutional improvement of the training framework for social assistants employed at local level. For the social assistants from local level to become social protection key-stakeholders, it is necessary to revise their wage category. It is also necessary for each social assis-tant unit to have a well-balanced working pro-gramme so as to direct his/her eff orts towards diff erent categories of benefi ciaries and not only towards elderly people.
For saving public resources, it is necessary to have legislative and institutional modifi cati-ons so as to make possible for local authorities to procure services off ered by NGOs. Th is fact shall enhance social protection system capacity to react effi ciently to social problems.
Approve and implement quality standards for social services off ered to diff erent categories of benefi ciaries. For achieving the given purpose, it is necessary to urge the approval process of the Law on Accreditation and Evaluation in Social Assistance Field. At the same time, these stan-dards will be effi cient only when the mechanism for evaluation and accreditation is used equally by public institutions and nongovernmental or-ganisations.
Development of human capital Ratifying the UN Convention on the
Rights of the Child45, the Republic of Mol-dova has committed itself to promote child rights and to develop a national policy for child protection against all forms of physical or mental violence, injury or abuse, neglect or negligent treatment, maltreatment or ex-ploitation, including sexual abuse, while in the care of parent(s), legal guardian(s) or any other person who has the care of the child46. For ensuring full implementation of inter-national provisions and observing children’s rights, it is necessary to set up a single sys-tem for child protection based on the four principles provided for in the Convention:
Child’s best interest – all actions in regards to the child shall take into account the totality of his/
her superior interests.
Non-discrimination– all rights are applicable to children with no exception and the state shall ensure children’s protection from any form of discrimination.
Survival and development – every child has the right to life; states parties shall ensure children’s development, harnessing their potential to the maximum extend possible.
Child’s participation – every child has the right to express his/her own opinion that has to be ta-ken into consideration in any procedure or issue aff ecting him/her.
A number of documents were passed in the fi eld of child and family protection policies. Th e most relevant are the Con-cept47 and National Strategyon Child and Family Protection48, the National Action Plan in Human Rights fi eld49, the National Strategy and Action Plan “Education for all”50, the EU – Republic of Moldova Action Plan51, the Strategy and the Action Plan for the child residential care system reform for 2007 - 201252. In spite of all eff orts under-taken for policy making, the present-day system for child protection in the Republic of Moldova is fragmented, ineffi cient with a poor approach towards prevention ser-vices53. Prevention and care in the family or family-related environment are the optimal forms for protection of children left with no parental care; nevertheless
institutionaliza-tion continues to remain the main protec-tion form for such children in the Republic of Moldova. Family support and family-re-lated environment services are underdevel-oped, and state funding is either limited or missing at all. Presently, over 12 thousand of children from the country are placed within 67 residential institutions. Unsatisfactory living conditions represent the main cause for child’s entering the protection system, 85% of institutionalized children are com-ing from socially vulnerable families havcom-ing one or both parents alive.
An essential drawback of the child protection system is the lack of indepen-dent monitoring structures for child rights’
protection and promotion. Th is drawback was noted within the Final Observation of the Committee on the Rights of the Child in 2002, where the Republic of Moldova is recommended to establish the function of
“child’s advocate”, either within the Centre for Human Rights or as an independent in-stitution54.
Th e constant reform of local public ad-ministration system has determined the in-stability and the slow development rhythm of the institutional framework for child pro-tection both: at central and local levels. At rayon level, child protection structure is in-signifi cant, covering just 2-3 specialists that deal with child and family protection. Child protection responsibilities were not clearly segregated at central level either.
Th ere are maintained fi nancial mecha-nisms that do not promote and do not