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ECONOMIC BRIEFS

Welfare cuts bring few savings as jobless rate soars

A change in the social support system, which was designed to cut the state's welfare bill and tighten standards of eligibility for benefits, has been in force since July 1, but has not resulted in significant savings because of rising unemployment. Slovakia's jobless rate stood at 19.1% at the end of August.

Labour Ministry spokeswoman Jana Burdová said that while some people living on welfare had been judged to have "subjective reasons" for remaining jobless, and had thus been shifted to another (less generous) benefits category, the total number of people receiving benefits of some kind had not dropped.

At the moment, 280,000 Slovaks live on welfare (as opposed to unemployment insurance), of whom one-third have been receiving lower payments since July because they have been judged to have no 'objective' reason for remaining unemployed. Before the rules of eligibility were changed this summer, only 8.9% of recipients were found to have 'subjective' reasons for not taking a job.

Slovakia now spends about 900 million crowns ($22 million) a month on social benefits programmes, up 17% since a year ago. Over 90% of this money is spent on welfare handouts.

The Labour Ministry had hoped to save 300-350 million crowns this year through the welfare revisions, but now doubts this target will be met. Labour Minister Peter Magvaši has frequently said the changes in the law will motivate people to seek jobs more actively.

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