Child benefit increase postponed

RIGA - The Latvian government again has no money to fulfill promises of the previous administration, which pledged to raise allowances to families with children by Jan. 1, 2001.

This time the increases were postponed for two years. But most benefits then will be doubled, the government said.

"It is hard to believe any of the government's promises, because they postponed allowance increases several times," said Leonids Muce-nieks, head of the Large Family Association. "In the previous parliament these changes were also delayed."

But the Berzins government has declared it will "maintain child care allowances at the previous level."

Every family residing in Latvia now receives a monthly social benefit for each child, ranging from 4.5 lats ($7) to 10.8 lats ($18) per child. For some large families, most of which live close to the poverty line, these allowances make a valuable addition to the total family budget.

But the amount of the benefits has not changed since 1992 and the purchasing power of those benefits has decreased sixfold, according to Mucenieks.

"How do large families live? They just don't use luxury cars, they don't eat expensive food, they try to save money all the time," he said. "The state policy is simple. They just know that these families will survive somehow."

Government payments to families with children have a list of finepoints. First, families receive a 40 percent more payment for children born after Jan. 1, 1999.

The difference exists thanks to a gradual child benefit increase begun in 1998. But there was not enough money to raise all the benefits simultaneously, said Inara Baranovska, head of the Ministry of Welfare's Social Assurance Department.

On July 4 the Cabinet of Ministers rejected a Ministry of Welfare proposal that would have made all benefits equal regardless of birthday. There wasn't enough free money in the budget, according to the Cabinet of Ministers.

Another aspect of the benefit scheme relates to the number of the children in the family and in what order they were born. The allowance for the second, third and fourth child in the family increases exponentially. The benefit for the second child is 20 percent more than that for the the first. For the third it's 60 percent higher and for the fourth 80 percent.

"This is the state demographic policy," said Inita Paulovica, head of the Welfare Ministry's Social Policy Development Department. "The state decided that the optimal number of children in the family is three, but, anyway, the amount of the benefit for every next child does not decrease - it is kept the same as that for the fourth child."

The Welfare Ministry regularly proposes increases in child benefits. They are essential for poverty reduction, forming a regular and stable income source you can count on, according to ministry officials. "About 80 percent of families with children are relatively poor," said Paulovica. "If the parents work as a nurse and a teacher, they presumably will be quite bad off."

But unlike pensions, child benefits are not tied to inflation. The only thing setting the benefit, and preventing its increase, is the current budget balance, said Paulovica.

Raising benefits is not a matter of thousands of lats annually, but millions.

Last year the child care benefits were payed for roughly 480,000 children and the birth rate steadily increases.

But there are some additional allowances available in Latvia aimed at child care support. These include a child birth benefit, - 98 or 196 lats paid once the child is born. And also a monthly child care benefit, which is paid to one of the parents working part-time - 30 lats per month for the child 0-1.5 years old and 7.5 lats for the child 1.5-3 years old.

"Besides the social child benefit, paid by the state, there is an income tested benefit, that is paid by the local municipalities," said Paulovica. "The families with low incomes can apply and receive these benefits, but the families that need them usually do not know about them, or cannot afford to go to the regional center to fill the required papers,"

There is no particular state institution that will take care of the family. The Education and Science Ministry takes care of education and the Welfare Ministry minds other social problems, said Paulovica.