Experts analyzed the impacts of implementation of the 'benefits monetization law' in the regions

30 september 2016

Federal Law No 122-FZ, widely known as the 'benefits monetization law', was supposed to address a number of drastically new problems with providing social benefits to the public. The Analytical Center experts have conducted a study and come up with a generalized assessment of the impacts of the law in the region for the state and for the public. The experts focused on people that get social benefits under federal regulatory laws and the programs of regional and local self-governance authorities in the Russian Federation. This kind of support quite aptly characterizes the reaction of local executive authorities to the situation that came about after the law was passed, the experts believe. Analysis of the key indicators dynamics enabled the experts to identify dominant trends in the social support to the public, some positive results as well as persisting problems.

Under the new law, various measures of social support are used in the regions: there are monetary payments, provision of free goods and services, tax exemptions and other benefits. In the time that the law has been in effect the list of categories has expanded and the number of recipients of social benefits has gone up. “In 2006, that is about a year after the federal law went into effect, new categories of social benefit recipients began to appear in the regions and by 2015 the number of these categories had gone up to 21,” the experts write in the Bulletin. Special attention was paid to the social support of the elderly people, mothers and children, and the poor. The number of recipients of monetary social benefits went up from 6.6 million in 2006 to 25.4 million in 2015 (a 3.8-fold increase), which is several times more than the increase in the country’s population in the same period.

The experts write about changes in the structure of the types of social benefits offered in monetary form. The share of social benefits offered as regular or one-off payments is falling while the number of recipients getting various types of monetary compensation is on the rise. The changes in the number of recipients of monetary social benefits are only partially linked to the demographic and socio-economic processes in the regions, the experts say, and can be regarded as insufficiently objective and being focused primarily on the regional elites. Taking into account the state of regional budgets, the analysts believe there is a risk that their spending might end up being suboptimal and regional governments will need financial aid from the federal treasury.

The amounts of social benefits available to different categories of recipients differ, but it is impossible to assess why they are different and the reasons for such differentiation because of lack of detailed enough information about it, the experts admit. At the same time, the average payments per recipient are significant relative to the per capita income and are actually growing, the study notes. Based on that the experts conclude that the social benefits that are available are having a positive impact on the income of the recipients. And the fact that monetary social benefits far exceed other types of social benefits should be regarded as a positive development with ample justification in terms of optimization of regional spending, the analysts believe.

Analysis of Federal Statistics Service data characterizing the amount of monetary social benefits received by the public broken down by type and category of recipient for 2006-2015 found that there is differentiation in the amount of benefits depending on the type of benefit and the category of recipient. Thus, the maximum amount of regular benefits, totaling RUB 10,565 a month, was received by civil service pensioners in 2015, while the smallest amount of just RUB 307 a month was paid to the poor. The maximum amount of a one-off payment at RUB 29,701 a year was paid to orphans and children abandoned by their parents while RUB 28,878 was paid to civil service pensioners. The smallest one-off benefit of RUB 831 per year was paid to blood donors.

For more, see the bulletin on the Findings of an Analysis of the Socio-Economic Impacts of the Implementation of Measures to Provide Social Benefits to the Population in the Russian Regions under Federal Law NO 122-FZ dated August 22, 2004 (benefits monetization law).

For other issues of the social bulletins see the Publications section.